I’ve been in commercial real estate for more than 25 years, and one of the most common misconceptions I hear is that you need millions of dollars and tons of experience to get started. That’s simply not true. So I wanted to take some time to walk you through the advantages of investing in commercial real estate, the misconceptions around its drawbacks, and the easiest way to break into the market yourself… micro flex industrial spaces.

The Full Picture

If you’re interested in the full story about how to break into commercial real estate investing (without $5 million in your pocket), check out the video below:

 

If you’re more of a reader, keep on scrolling:

Why Commercial Real Estate Beats Residential

Many people assume residential properties are the easiest way to build wealth in real estate, but commercial offers a number of significant advantages. First, you’re dealing with business owners, not individuals. Commercial tenants are typically more reliable, and they sign longer leases. Most commercial lease terms range from 3-5 years (and in our 25+ years in business, we find our tenants often stay much longer than that). Compare that to the constant turnover in residential properties, where tenants typically move out after just a year or two.

Then there’s the rental income. Commercial spaces generally bring in higher rent per square foot than residential properties, and that difference only grows over time. Over the long term, commercial rental rates have shown greater stability and growth, meaning more income for investors.

Another major benefit is what we call triple net leases. These are standard in commercial real estate (and all our pre-leased units are NNN leases), and they shift many of the property-related expenses — like taxes, maintenance, and utilities — onto the tenant. As a landlord, this means fewer unexpected costs cutting into your profit. With a triple net lease, you know exactly what your income will be each month.

Overcoming Barriers to Entry

One of the biggest concerns people have about commercial real estate is the cost. There’s a misconception that you need a million dollars or more to get started. While that may have been true historically, it really isn’t the case any more.

Financing is another big one. How much do you need for a down payment? (Hint: it is more than 20% standard for residential, but it also doesn’t need to be the 50%+ you’ll see with many projects).

Then comes the fears around due diligence — do you understand the market you’re looking to invest in? Is that neighborhood or area on the come up? Or conversely, on the way down? What types of businesses are in the area? What are their space needs?

We get it — entering a new market is intimidating, especially if you’re unfamiliar with the commercial real estate landscape.

And finally, and one of the most common concerns we see, is around property management. People aren’t trying to create a new job for themselves by getting into commercial real estate… they’re trying to diversify their portfolio and add some passive income to their balance sheet (key word being “passive” there). But if you become a landlord… does that mean you’re getting frantic phone calls in the middle of the night if a tenant’s HVAC system goes down?

The bottom line is there are real concerns around entering commercial real estate as an investor… but we (quite literally) designed Personal Warehouse to overcome each of those obstacles.

What Are Micro Flex Spaces?

First off, what is a “micro flex space” (the commercial real estate category Personal Warehouse basically invented)?

Micro flex spaces are smaller, flexible industrial commercial units that offer versatility for a wide range of businesses. Think of them as finished industrial or warehouse spaces (but with a focus on flexibility and affordability).

Typical industrial or flex space usually starts around 5,000 sq. ft. and goes up from there, but micro flex spaces fill the gap between personal storage and industrial (most of our units are between 800 and 2,000 sq. ft.).

Our units provide an open floor plan with high-end, custom finishes that can be adapted to various uses… making them perfect for small business owners, hobbyists, and even sports enthusiasts who need extra space.

How Micro Flex Spaces Become Great Investments

When it comes to commercial real estate, micro flex spaces offer a lot of advantages that make them a strong option, especially if you’re just getting started or looking for a manageable, scalable investment.

Now, the majority of Personal Warehouse owners use the space themselves — whether to house their small business’s offices, inventory, showrooms, etc.; store car collections or RVs; what have you. But, 20-30% of our units are leased to tenants.

That’s where you come in.

We give investors an opportunity to enter the commercial real estate market without needing millions in capital or dealing with the complexity of larger properties.

First, the lower entry point is a big deal. Unlike large commercial properties that require millions to get started, micro flex spaces like Personal Warehouse range from $300,000 to $600,000 (and with down payments around 30-40%). This makes commercial real estate investing far more accessible than people realize.

You don’t need a massive budget to get in the game.

Many of our units come pre-leased. That means when you buy, we’ve already done the leg work of securing a tenant (usually a small business owner) who has signed a medium- to long-term lease. These are professional tenants, not individuals, which generally leads to more predictable, steady income right out of the gate.

Day-to-day management of a property can turn a lot of people off — like we said earlier, you’re not trying to invent another job for yourself. But with Personal Warehouse units, that’s mostly taken care of for you. Because the properties are part of a condo association, much of the heavy lifting — like maintenance and common area management — is handled by third-party professionals. And, most of the upkeep falls on the tenants (things like HVAC systems, overhead doors, plumbing… these are all tenant responsibilities). Taken together, that means less to worry about on your end, and fewer unexpected expenses to cut into profit margins.

The same goes for the lease structure. All of our units come with triple-net leases, which means the tenants handle a lot of the expenses. Property taxes, maintenance, utilities — they cover almost all of that stuff. This further keeps your income stream more predictable because you won’t be hit with surprise costs along the way.

In terms of risk management, you can also achieve some built-in diversification if you choose to invest in multiple units or projects. This spreads any risk across a range of tenants and geographies.

Demand for these spaces has remained solid, regardless of macroeconomic trends. When small businesses grow out of their home offices, Personal Warehouse is an ideal next step (especially if they have any inventory or shipping needs). When markets sour and companies need to contract, we meet the market there as well. Businesses always need affordable, flexible spaces, and the micro flex space is one of the only products that catches demand in both market directions.

Lastly, these units are great for 1031 exchanges, which allow you to defer capital gains taxes when you sell your unit and want to reinvest in another commercial property. This is a key advantage for anyone looking to build long-term wealth while keeping more of their profits in play.

Final Thoughts

Investing in commercial real estate doesn’t have to be complicated, and it doesn’t always require millions in upfront capital. Micro flex spaces offer an affordable, low-maintenance entry point for investors looking to diversify their portfolios and generate steady income.

If you’re ready to explore how Personal Warehouse can help you break into commercial real estate, drop us a line. We have several exciting projects underway that we’d love to talk with you about.

Let’s find the right investment opportunity for you.