863: Commercial Real Estate: The “Buy Box” for Buying BIG Properties w/Kim Hopkins

For the past year, commercial real estate has been the disappointing big brother of rental properties. As housing prices went up, commercial real estate prices went down. When primary mortgage rates were high, commercial mortgage rates were even higher. With record-setting vacancy rates in areas like office and less reliance on retail, many investors thought that commercial real estate was a dying asset class. But they weren’t entirely correct.

Investors like Kim Hopkins had thriving commercial real estate success, EVEN during lockdowns and the pandemic. Kim’s secret sauce to her high cash-flow commercial real estate portfolio wasn’t in getting lucky—it was all in her “buy box.” Kim ONLY buys properties that can’t get shut down, in markets where they’ll thrive, with tons of customers nearby. And today, she’s sharing her exact formula with us!

But that’s not all. Kim is currently debating doing one more deal before the year is up. This property looked like a home run on paper, but as she’s dug deep into it, the property may not be worth the price. From plumbing issues to overinflated income numbers, Kim uses David and Rob as coaches to help her decide whether this deal is worth doing.

In This Episode We Cover:

Kim’s commercial real estate investing “buy box” she uses to purchase profitable properties

Cap rates explained and why you MUST get this right when buying big properties

The inflated “pro forma” numbers brokers will try to convince you of (don’t follow these!)

The types of commercial properties that are lockdown-resistant and always stay open

The significant risks for commercial real estate in 2024 and two businesses you should NEVER rent to

A live deal deep dive with a current deal Kim is debating on buying

And So Much More!

Links from the Show

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Ask David Your Question

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How to Get Into Commercial Real Estate Investing (For Beginners)

Pro Forma In Real Estate: What Is It?

How To Calculate Cap Rate For Investment Properties

Connect with Kim:

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Kim's Website

Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-863

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