I started with single family rentals in 2008, but quickly moved to CRE. My experience resembles FMH's.
I developed my CRE plan while.on reserve in 2010. I went so far as to write a business plan with financials that I took to the bank once I filled in the property specific numbers. Using a $100k down payment and 900k of SBA 504 financing I bought a 270 unit self storage facility from a disinterested owner. It was listed by a "non storage" broker and was languishing on Loopnet The existing manager stayed with the property, but retired a few months after acquisition when work expectations were made clear. With proper management, facility improvements and $250k of expansion (on borrowed money) the facility was valued at 2.5M within three years. The increased cash flow supported a 900k cash out refinance that funded subsequent acquisition and development.

This exceeds typical leverage and gains available in the market today. It also took hours of direct involvement. Today, a similar property requires 20-35% equity and would take 3-5 years before refinancing the initial investment back out. It still beats most other investments.

At the opposite end of my investing spectrum, are apartment syndications where I've never even seen the properties. I've lost money on one and made double digit IRR on others. Returns are dependant on the syndicator and the property. DYODD. Learning multifamily valuation and financing is critical. Bad financing terms can sink a well run property. I learned the downside of bridge loans and Fannie floaters and rate caps over the last year. Properties with long term agency debt are providing good distributions.

In the middle sits a STNL (single tenant net leased) property. It was purchased in 2021 with cash in a 1031 exchange. I visited the property once after it was under contract. The real inspection was from an inspector I hired. Since then I've been inside the property twice and driven by two other times. Rent comes from a national brand tenant on the 1st of every month. At some point I can get loan and use the capital for another investment, until then the net rental income is 7% of the purchase price.

Most real estate horror stories include one or more of the following:
-Unscreened tenants-Government subsidized rent
-Condos
-Coastal ie cyclical markets
-Anti business sentiment (blue states)
-Lack of DD in the property or syndicator
-Speculation on appreciation
-Ignoring the importance of cash flow.
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