The Only Commercial Real Estate Guide You’ll Ever Need

By Arun Ghosh

Look, I'm going to save you years of confusion and thousands in "education" costs with this post.

Most people think commercial real estate is this mystical, complex world reserved for the ultra-wealthy. That's complete nonsense. But here's what's true: most people never start because they're looking for the "perfect" entry point instead of the "easiest" one.

The Brutal Truth About Getting Started

Here's what nobody tells you: The best time to start was 10 years ago. The second best time is today. Not when you have more money. Not when you "understand everything." Today.

I see people spend 2-3 years "learning" and never pull the trigger. Meanwhile, the person who started with less knowledge and less money is now on their third deal.

Where to Actually Start (The Easy Path)

Industrial/Warehouse Properties - Your Gateway Drug

This is where I tell everyone to start, and here's why:

• Simple business model: Tenant pays rent. You collect. Done.
• Long-term leases: 5-10 years typically. Less turnover headaches.
• Lower maintenance: No fancy lobbies or high-end finishes to maintain.
• Easier financing: Lenders understand the asset class.
• Scalable: Once you understand one warehouse, you understand them all.

The numbers are straightforward. A warehouse renting for $6/sqft with operating expenses of $2/sqft gives you $4/sqft net operating income. Multiply by square footage. Divide by cap rate. That's your property value. Simple.

Small Office Buildings - The Next Step

Once you've done 1-2 warehouse deals, small office buildings (under 20,000 sqft) are your next move:

• Higher returns: Typically 1-2% higher cap rates than industrial
• More control: Smaller tenant base means easier management
• Value-add opportunities: You can actually improve these properties
• Local market focus: No need to go national to find deals

What Looks Easy But Isn't (Avoid These Early)

Retail Properties - The Fool's Gold

Everyone thinks retail is "easy" because they shop at these places. Wrong.

• Tenant bankruptcy risk: Retail tenants fail at alarming rates
• Location dependency: One road closure kills your property value
• High tenant improvement costs: Every new tenant wants buildouts
• Percentage rent complexity: Revenue-based rent calculations are a nightmare

I've seen seasoned investors get crushed in retail. Don't be clever here.

Multi-Family Apartments - The Overhyped Darling

Yes, everyone needs housing. No, that doesn't make it easy money.

• Intensive management: Residential tenants = constant phone calls
• Regulatory nightmare: Rent control, eviction moratoriums, fair housing laws
• High competition: Every "guru" is pushing this space
• Emotional tenants: Business tenants are rational. Residential tenants are not.

The Complex Stuff (Graduate to These Later)

Development Projects

Don't even think about this until you've done 10+ deals. Development is business on expert mode:

• Entitlement risk: Zoning changes can kill your project
• Construction risk: Cost overruns are the rule, not the exception
• Market timing risk: 2-year development cycle means you're betting on future markets
• Capital intensive: Requires relationships with serious money

Mixed-Use Properties

Sounds sophisticated. Usually means "complicated":

• Multiple business models: You're running retail AND office AND residential
• Financing complexity: Lenders hate mixed-use deals
• Management nightmare: Different tenant types = different problems
• Exit complexity: Harder to sell something nobody understands

The Real Secret Nobody Talks About

Start with what you can actually afford to lose.

I don't care if you can "technically" afford a $2M property. If losing that $2M would ruin you, start with a $500K industrial building.

The goal isn't to hit a home run on deal #1. The goal is to:

1. Learn the process
2. Build relationships
3. Prove to yourself (and lenders) you can execute
4. Generate cash flow to fund the next deal

Your 90-Day Action Plan

Month 1: Education

• Read "The Millionaire Real Estate Investor" by Gary Keller
• Join your local CCIM or SIOR chapter
• Start following industrial/warehouse listings in your market

Month 2: Market Research

• Identify 3 industrial submarkets in your area
• Track cap rates and rent levels for 30 days
• Build relationships with 2-3 commercial brokers

Month 3: Take Action

• Submit offers on 3-5 properties
• Get pre-qualified with 2 commercial lenders
• Schedule property tours every weekend

The Bottom Line

Commercial real estate isn't rocket science, but it's not real estate TV either. Start simple, start small, and start now.

The person reading this who takes action in the next 30 days will lap everyone who's still "researching" a year from now.

The choice is yours.

Arun Ghosh is a commercial real estate investor and the founder of Hutfin.com. He has acquired over $50M in commercial real estate assets and helps investors navigate their first commercial deals.