How to Build a Commercial Real Estate Portfolio from Scratch
- Nate Jones, CPCU, ARM, CLCS, AU
- 6 days ago
- 2 min read
Starting a commercial real estate (CRE) portfolio from scratch may seem daunting, but with the right strategy and support, it can be a powerful path to long-term wealth. Whether you're looking to invest in office buildings, retail spaces, warehouses, or multifamily properties.
1. Define Your Investment Goals
Before buying your first property, clarify your objectives. Are you seeking steady rental income, long-term appreciation, or a mix of both? Your goals will influence the types of properties you target, the markets you explore, and the financing strategies you use.
2. Choose the Right Property Type
Commercial real estate includes various asset classes:
Multifamily: Offers consistent rental income and lower vacancy risk.
Retail: Can be lucrative but sensitive to consumer trends.
Office: Ideal for long-term leases but impacted by remote work trends.
Industrial: High demand due to e-commerce and logistics growth.
Start with a property type that aligns with your goals and risk tolerance.
3. Start Small and Scale Strategically
Many successful investors begin with smaller properties, such as a retail unit or a small multifamily building. These allow you to learn the ropes without overwhelming risk. As you gain experience, reinvest profits into larger or more diverse assets.
4. Build a Strong Team
CRE investing requires expertise in legal, financial, and operational areas. Surround yourself with professionals:
A commercial broker
A real estate attorney
A CPA familiar with real estate tax strategies
A property manager (if you prefer passive ownership)
This team will help you avoid costly mistakes and streamline your growth.
5. Secure Financing and Understand Your Numbers
Explore financing options such as commercial loans, SBA loans, or partnerships. Learn key metrics like cap rate, net operating income (NOI), and debt service coverage ratio (DSCR) to evaluate deals effectively. Conservative underwriting helps ensure long-term success.
6. Protect Your Investment with Insurance
Every commercial property carries risk—from tenant liability to natural disasters. Wexford Insurance offers customized commercial property insurance for all asset types, including apartments, office buildings, retail spaces, warehouses, and more.
Our coverage includes:
Loss of rental income
Specialized coverage for mixed-use and multifamily properties
With Wexford Insurance, you get peace of mind and expert support tailored to your investment strategy.
Final Thoughts
Building a commercial real estate portfolio from scratch takes planning, patience, and the right partners. By starting small, choosing the right property type, and protecting your assets with comprehensive insurance, you can create a resilient portfolio that grows over time.
Contact Wexford Insurance today - your trusted partner for commercial property insurance.
FAQs
Q1: What’s the best property type for first-time investors?
Multifamily and small retail units are often ideal due to manageable size and steady income.
Q2: How much capital do I need to start?
It varies, but many investors begin with $100K–$250K depending on location and property type.
Q3: Do I need insurance before closing on a property?
Yes. Insurance should be in place before closing to protect against immediate risks.
