They run a mini commercial real estate empire in their town

What do flowers, coffee, dogs, and Pilates have in common? They’re all part of a cottage commercial real estate portfolio owned by David Switzer and his wife, Andrea, in Jersey City, NJ. Here’s how they broke into this intimidating asset with zero experience, plus the surprising perks they’ve discovered.

Q: How did you get into commercial real estate? “My wife and I live a block from a flower shop, and in 2024 we noticed a ‘for sale’ sign. We called the broker who had sold us our house, who also does commercial; he said it looked like a solid investment. So we just went for it. We paid $315,000 for a 600-square-foot ground-floor unit. The florist pays us $2,200 a month. At first, we thought it was wonderful that the property already had a tenant with predictable cash flow, like acquiring a stock that pays dividends. But we soon realized that this is the opposite of what you want because you can’t add value. You’re just paying a premium.”

Q: What else have you purchased? “We bought an empty 1,300-square-foot ground-floor commercial condo for $550,000. To find a tenant, we reached out to every single business I thought could go there. A coffee shop owner came to see the space, loved it, and signed a five-year triple-net lease for $4,000 a month. The third is a 950-square-foot corner unit for $523,000 where my wife is opening a Pilates studio. The fourth is a $961,500 property with a yard where a doggy daycare pays $7,200 a month under a triple net lease. I found that tenant before purchasing the property.”

Q: How did you finance these deals? “We tried a lot of banks and kept getting rejected. Empty commercial buildings are hard to finance. So we went to a hard money lender. Fast close, no income docs needed, just the lease. But the interest rate is 10.5%. On day 366, after the prepayment penalty expires, we’ll refinance with a local credit union at a better rate. With a tenant, lenders will be more interested.”

Q: How are the returns? “The flower shop breaks even. The coffee shop has roughly an 8.7% cash-on-cash return. The Pilates studio is predicted to generate an 11% return. Returns on the doggy daycare are tight right now with its hard money loan, but once we refinance closer to 6.5%, we’re looking at over $2,000 a month net.”

Q: What advice do you have for breaking into commercial real estate? “If you’re buying a space with a tenant in it, read the lease carefully. For new tenants, try for a triple-net lease where your tenant pays the taxes, insurance, and maintenance—that’s the model that makes commercial attractive. And here’s the key: You don’t make money buying cash flow; you make it by creating the value yourself. Most investors overpay for properties with existing tenants. The better opportunity is in vacant or new commercial builds where you find your own tenant. To lower your risk further, find the tenant first, then find a space they want to occupy, then make an offer. It makes it far easier to get a loan.”

Q: Any surprising perks? “Once on Valentine’s Day I went to the flower shop to pay for a bouquet, and she gave it to me for free. The coffee shop charges me; if they didn’t, I’d be in there every day getting an acai bowl!”