Commercial Real Estate Investing From A-Z

What to do if your property is in trouble? If your interest rates are doubling? What will save your deals? This is a step by step guide on what to do if your property is in trouble, from managing your bank all the way to getting multiple bids from all of your vendors. Ken McElroy, CEO and founder of MC Companies, shares this golden guide with us.Read this entire episode here: https://tinyurl.com/mry4cbnvWhat are some of the things we should be doing if our properties are in trouble?The first I always look at is what's within your control. One of the things I've started to do is really dial in on my operations. Now, I have a massive advantage because I started in property management right out of college. For the first 10 years of my life, I managed 20-30,000 units. When I step on a project, I have a checklist in my mind that I've been through 100 times. The first thing I've done is scrubbing each one of my assets. I want to make sure that my expenses are completely in order, everything's been bid out multiple times, and that my market rents are exactly where they should be. I make sure that I have the right teams in place, that I'm maximizing my revenue, my other income, and my expenses. That requires a fairs amount of work. That's super important because no matter what, that is going to determine your next loan, your next investor, they're going to look at the operations.The second thing is you have to dig into your partnership agreement with your LP equity and your prefs, and all of that, and you need to take a look at your stress points. And then you can start to bring in other sources to top it up, whether that's asset management, it could be family office, institutional, or a number of things, you can give up GP equity, you can bring more LP equity, you can come up with a loan, all of that should be fully transparent to your existing deal. You can't just change things and tell them later. You have to paper up and make sure it's all correct. That's the area that people are going to be in trouble on, thinking that this will be short term, I only need this for six months, three months, one year, whatever. If they're right, they're probably going to be okay but if they're not, people are going to wonder how they got squeezed out.You need to go out and get other opinions from brokers, opinions of values, people are doing that all over the place. Brokers aren't listing deals right now, they're actually giving everybody BOV's. That's really important because that substantiates what the thing is worth. Then, you have to look at your debt, and see how much equity you have, and if you have equity, even if it's half, or 2/3 or 1/3, of what it was, that's still okay, you're in the money. Now, it doesn't really matter today because you're not selling, If you're selling today, that's exactly what would happen. You're playing the long game here so you need to have all that information and then you can go out and make good decisions on the asset, preserving the equity. I've been in a situation where we bought things and equities went down, probably everyone has, a car, a house, things depreciate, things go down in value, but over the long haul, especially with this inflation, you're on the right side of it, even though you might be feeling a little bit of pain. I want to be in hard assets during high inflationary times, because we all know, you can't build a home or apartments affordably right now, so if you own them, you're actually in that category. That's good, even though it might not feel good, if you can hold on to it, I truly believe that real estate is going to really skyrocket based on all these crazy...

What is happening with commercial real estate? Is now a good time to buy or will it get even better? How are the Fed rates going to play out? Ken McElroy, CEO and founder of MC Companies, shares his experience.Read this entire episode here: https://tinyurl.com/mryp72kvA lot of investors have bridge debt or value-add deals, we're seeing capital calls, you've been through 25 years of this, how are you looking at what's happening right now?What happens in a normal balanced market is: there needs to be a little push-pull between buyer and seller and what happened is that the buyers in the last couple of years were at a massive disadvantage, they had to stretch for pricing and for terms, they were shortening their due diligence periods, etc. It was all coming and what this is doing is, it's an adjustment for the sellers and that gets lost in cash calls and all of that. But we needed the sellers and the brokers to adjust their expectations. What was happening was that people were stretching for deals and many of those deals are the ones that are in trouble, so the market was not in balance.I have talked to one investor that has five capital calls going on, there's a lot of challenge, but it's really counterintuitive. A lot of times, it's the idea of being fearful when others are greedy and being greedy when others are fearful, as Warren Buffett would say. Do you think, with the cap rate expansion, are we seeing some better deals now or are we not quite there yet?We're not quite there. There's a lag effect with interest rates, with cap rates, with sellers and brokers and all of that. Playing defense and offense is a good analogy and I believe that you should be at all times. You should always be playing a little bit of offense, sometimes you're playing more offense, a lot of people right now are playing maybe a little more defense, but the worst thing that you can do is bury your head in the sand. If you're in this business for the long haul, I think that there needs to be a good balance there.What has gotten our investors to trust us over a long period of time is full transparency. We all know news can be a little slanted but it does stand to reason. If somebody's in that kind of trouble, how are they managing that? Have they been talking with their lenders? Have they talked to their investors? What are they doing on the management side because, for the last 22 years, the market has not gone up. I've seen it go up and go down multiple times. There are strategies for all of those things. There has been a tremendous amount of focus on influencers raising money online, I don't have a problem with that, however, if that's their only skill, then they have a problem and if the investors invested in those people, then that's an LP problem. When things like this happen, and it will happen again, you start to look at experience and wisdom, and how deep your bench is, your capital reserves, and all those things.What do you think about the Fed with rates?From everything I read and see it doesn't appear that the Fed would do that, and if they do, what are they going to go down to? Five? They punch all the way past 3, 4, 5, 6 and now they're approaching 7, so think how far they have to go. Even if they say, yes, we're going to reduce rates, they're going to do it at about a quarter point, half a point over time. Maybe if you're lucky, that could be a point in a year. You have to put things in perspective, they're not going to go from 6- 7% rates or even 8 for single family, in some cases, and hard money is way over that.<a...

How to approach doing a capital call to your investors? And on the other hand, how should investors decide to give more money for a deal that is in trouble? Mauricio Rauld, securities attorney of Premier Law Group and host of Real Estate Syndicator Live, shares his knowledge.Read this entire interview here: https://tinyurl.com/3mz7t22hA lot of people are in trouble, interest rates have doubled, insurance has doubled in many states, and some people have to do capital calls, how would you approach doing a capital call? And from an investor's perspective, how would you choose to participate in it or not?The first thing we typically advise clients is from my buddy, Ken McElroy, when things aren't going well and things are starting to not go according to plan because lack of cash flows don't happen from one day to the next because those things are going to slowly start happening, the key is to make sure that you double down on your communication with your investors. A lot of syndicators, especially new ones, tend to sort of stick their heads in the sand a little bit when things aren't going well, the investor is going to be upset at us, and we should not tell them, if you're communicating once a quarter and things aren't going well, start communicating once a month or once a week or every day, depending on how severe things are. That way, when it's time to do the cash call, it's not a complete shocker, you've slowly been showing what's going on, it's been a tough environment, we need to refinance, and we can't because the interest rates have gone up and the whatever the situation is. Letting them know earlier will be appreciated by the investors and you’re going to be in a much better situation.Try to avoid a cash call at the beginning. Usually, if there's the inclining of issues that happen, let's say, rents or revenues down because of whatever reason, then, the first line will be the syndicator. They'll make a loan to the company, they'll make a capital contribution to the project: 1) to show faith that they're confident in the project, 2) the cash call is the last thing you want to do. For both syndicators and for investors, as you want to look at the operating agreement. If you need $500k, you probably want to ask for $750k. There are a lot of funds out there that are really targeting they might come in and say, look, I know you need 500, I'm going to give you the 500 or I'll give you a million, but then they insert themselves way ahead of everybody else. Obviously, the bank is going to be number one always, but then they're going to be second and they're going to have their money out before any of the LP money comes out.Mauricio Rauldwww.premierlawgroup.netwww.youtube.com/@MauricioRauldEsq&nbsp;

What are some of the biggest items that syndicators need to keep in mind? How to raise a fund yourself under your company name? Mauricio Rauld , real estate syndication attorney of Premier Law Group and host of real estate syndicator live, shares his knowledge. Read this episode here: https://tinyurl.com/yvk4k4e3What are some of the biggest items that syndicators need to keep in mind that are easily forgotten?Understand that you are in the business of selling securities, because a lot of times, especially new real estate syndicators, they don't quite understand that. I'm just buying real estate, why do I have to worry about the Securities and Exchange Commission or the SEC? I'm just getting a couple of my friends and we're going to go buy a single family home, or buy this building, why do we have to worry about all this stuff? People think of SEC as the stock market, stocks, bonds, mutual funds, etc but it is much broadly than that. TIC agreements, joint ventures, profit sharing agreements and promissory notes are potentially securities, I always joke that high fives and handshakes are securities but the structure itself doesn't matter. People try and get creative such as I'm going to structure it this way or that way, or it's just a loan, it's just my dad, but the reality is the SEC doesn't care about any of that, all they care about is whether you are raising money, where the returns are generated by your efforts. If you're raising money, and you're doing all the work, or you and your co-sponsors are doing all the work, and you have passive investors who are writing you a check, it doesn't matter how you structure it, and how creative you get structuring it, it's going to be a security and that's something that newbies forget.What would be a way to go around that, would it be to raise a fund yourself under your company name, and then invest in that deal if you don't want to participate fully on the operations side or other things?In order for somebody to come into the syndication group as a legitimate co-sponsor and bringing in some capital, there are three things they need to fit into because there's an exemption. The general rule is you need a broker dealer license, but we can find an exemption to registration and that would be what we call the issuer exemption which requires three things and most of these deals don't follow. Number one is no transaction-based compensation. This happens a lot, you have to be willing to say, I'm going to give you 10% of the GP even if you don't bring a single dime. I know you promised that you thought you were going bring a half a million dollars from your investors and it turns out, you aren't able to bring any, you still have to get that 5% or 10% because you're giving that person that percentage, not for raising money, but for other things they should be doing like any other syndicator: due diligence, underwriting, asset management and all these little ton of things otherwise it's transaction-based compensation. Your primary role needs to be those substantial duties, it can't be raising capital and you have to show that you're doing more than that. If you're a real syndicator, you have two or three partners, you're part of the team, and you're all working hard to make this deal work, then you're going to fit into that exemption.Do funds pay an interest until they allocate all of the funds, is that optional?That's the beauty of syndications in general and certainly with funds, you can be as creative as you want to be. I would usually recommend not making it super complicated, because...

What do family offices look for in a deal? How do they manage their investments, are they risk takers or not? How are they evaluating deals in today's market? Irwin Boris is responsible for Acquisitions &amp; Asset Management at Peykar Capital, he has 25+ years of hands-on FP&amp;A, due diligence, and operations experience.Read this entire interview here: https://tinyurl.com/4ycychyeHow were you evaluating deals when the market was hot and extremely competitive? How has that changed today?We stopped doing multifamily early, about four or five years ago, and we sold a bunch, we only hold one multifamily project that I'm involved with right now. People call to buy it every day of the week. I say, I got six years left on my mortgage, we only have renovated half the units, I really don't care, if make me a stupid offer, and we'll consider selling it because I have no place to put the money. We don't really care about it. I've been doing industrial for many years, it's a cap rate play. What's the spread between your going in, your current cash flow, and your cost to finance? If I could buy on a 9.5 cap, I could finance on a 7.5% and then get 65% leverage with some interest only, I could probably get 8.5 or 9% current out of the deal, after closing costs. That's really what I look at, if you can't do it on a cocktail napkin, don't do the deal.What are some of your hardest deals and lessons learned?There are always deals that die in due diligence. Hopefully, they die earlier than later because you have out-of-pocket costs. We have one deal that we really liked that was upstate New York, in the vicinity of Ithaca College, it sat on a lot of excess land that was zoned for industrial or multifamily, whatever I wanted to build there. Basically, the land was free, it was a covered land play with a lot of excess land where the current ownership had already gone through the PUD approval with the municipality. I just needed a site plan.In the middle of due diligence, the seller told me that their major tenant called them and said that they don't need all the space, they want to renegotiate the lease and give back 20% of the space. I said I don't want to deal with this now. And then the lender's appraiser found that was a sublet listing on Costar for the space. Unfortunately for the sellers, who were all in their late 70s and early 80s, they've owned this for quite some time, they asked me, what do we do? I said, you really don't have a choice but to renegotiate their lease now and ask them for another five or seven years before their options because three years from now, when they are up for renewals, they got you, and they'll tell you what they're going to pay. Here, you still have a little bit of strength. They ended up taking my advice, and they took back the idea, they brought down the rent a little bit, and they have seven years left before five-year options. But unfortunately, based on the revised income, I couldn't stand behind the price anymore.There's always going to be deals in due diligence that die in due diligence. And there's no way to flush those out in advance. One thing I do with commercial buildings is I like to get the 10 largest tenants on the telephone and interview them. How's business? How many people? What are you doing? Are you back in the office? Are you still remote? How's the square footage working out for you? You flush a lot of these things out when you have those interviews. Don't just rely on an engineering report, an appraisal, and the financials because the tenants are going to tell what you the future of the building will be after the close.<a href="https://www.linkedin.com/in/irwinboris/" rel="noopener noreferrer"...

How to invest in medical office? How to find your tenants? What's the average TI (tenant improvement) for a small to medium size office? William Pozo, a podcast listener that has been investing in medical offices for several years, shares his knowledge.Read this entire interview here: https://tinyurl.com/mjbhu6fmHow do you find your tenants?First, it's the size of the space. Larger spaces tend to be more sophisticated tenants that want to have leasing agents. Tenant reps inflate all my costs so they're dangerous from a landlord's perspective. The size of the space warrants it, or the sophistication of the tenant, because their build-outs can be complicated and the doctors don't really know what they want. Their spouses tend to be the ones making some of these decisions, it's very difficult when you have a very expensive lease combined with a sophisticated build-out and there's an education process. I've done the leasing with reps, and I've done it with brokers. If the broker is a good broker, you won't have an issue, and I'll be happy to pay their fee.Anything less than two or 3,000 square feet, I'm advertising it in front of the building. I'm putting the word out with existing doctors. There's a small group of community folks, these doctors tend to have a point person at their front desk, and they have a few important business people. If you put out the word out to a few of the larger ones, all these doctors, if they like your building, they bring those doctors with them because if you're an orthopod, or a pediatrician, or one of these sophisticated cancer doctors, they're looking for those physicians to be very close so they'll spread the word. But the larger ones that require hundreds of dollars per foot in additional capital tend to go to the reps or the brokers that can deal with that level of sophistication. I've done a few of those.What's an average TI for a small office and the largest office that you have given?If the doctor is willing to sign a long lease, and it's a reputable doctor, there is virtually no limit that I would not put them in, I will draw the tenant. In other words, I'll start at 10, I'll start to drive down at $20 to $30m but I'll go all the way up to 150, within reason. But if it's a reputable doctor that I know will draw his own clients and other doctors, it's worth it. The leases should not be less than three years, and that would be with no build-out or with near zero build-out. In the 5-10 years leases, I'm starting to spend money on the build-out. You'll have odd requests, special MRIs, or special PET scan scanners and those cost the building a lot of money, not the machine, I'm only talking about the build-out around the machine (the copper or the or the radiation field) that cost is very expensive. But once they've installed that equipment, it’s like a carwash, you can't take the carwash, it's the same thing for a doctor. Once a practice installs a machine, they will stay for 10 to 20 years, they're not willing to give up on their equipment.What should we keep in mind with regards to medical office leases?A lot of smaller guys are afraid of the lease, they're afraid of negotiating or structuring the lease. Don't be afraid of that, especially if you have direct contact with a doctor. You just come up with a form, go to the area's market and see if anyone has the forms. Don't let that be a challenge. That's the number one reason people don't invest in medical offices, they see it as something scary that they have to have these contracts, it's not an issue. Let's face it, these doctors are unsophisticated and straightforward. William [email protected] The Advanced Real Estate Investing Summit: www.aresummit.com use code SUMMIT20 for 20% off!

What is the difference between a regular IRA and a self-directed IRA? What are the benefits of a self-directed IRA? Amanda Holbrook, from Specialized Trust Company shares her knowledge.Read this entire episode here: https://tinyurl.com/mtyykj3jWhat are the main differences between a regular IRA, for example, Fidelity or Vanguard, and a self-directed IRA?When you're at some of those big box companies, they will give you that old pat on the back stuff and say," Oh, Steph, you can go and pick your stocks, bonds, and mutual funds yourself". That is not true self-direction. To do true self-direction is to invest in what you know, and it's the same types of vehicles that you've become accustomed to Roth IRAs, traditional IRAs, 401 K's, and health savings accounts, the same ones you see over there, except when you shift over here. Instead of picking your little toys out of that sandbox called stocks, bonds, and mutual funds, we give you the whole playground. You can participate in a big commercial deal, be a private money lender, and own a rental property inside your retirement account versus the stock market. These things have been around since the 70s, and the knee-jerk reaction I get is, "Oh my gosh, this is crazy. How come no one in my professional roundtables ever told me about this?" And a lot of times, it comes down to money because a lot of those institutions don't get paid when you create an account and when you invest in opportunities in your backyard, when you put money on Main Street versus Wall Street, that's the big difference.Can we invest in other assets besides real estate?It's almost Pandora's box. The IRS, and how the codes are written don't tell you, "Oh, here are all the beautiful things you can do to take advantage of our tax code", they tell you what you cannot do. As long as you're not violating one of these cardinal rules, self-dealing, which is to buy something you already own, doing business with anyone up and down your family tree: parents, grandparents, spouse, children, off limits, if they branch off such as brothers, sisters, aunts, uncles, cousins, nieces, nephews, they're okay. Your siblings can fund your deals, you can fund your siblings' deals, or stock of a sub chapter S company life insurance. There are certain things like collectible artwork that cannot be held. No artwork, no collectibles. Everything you can think of outside of that shortlist is doable: tax liens, private lending, precious metals, oil and gas, timber. I have brothers down west of Fort Worth, they breed cattle in their retirement account because it's what they know. Real estate is one of those three basic needs of every human on the planet. That is the most common but there's a million different ways you can participate in real estate.Amanda Holbrook(505) [email protected] us at The Advanced Real Estate Investing Summit: www.aresummit.com

What is a cognovit clause? What are some of the main things that a borrower should be aware of in a loan document for a commercial property? Adam Lustig, head of the Real Estate Group at Bilzin Sumberg shares his knowledge.Read this entire episode here: www.tinyurl.com/nhzj3rmvWhat is a cognovit clause? How can that affect an investor if it is in a loan document?A cognovit clause is a clause in an agreement that authorizes the entry of a judgment against the defaulting party in the event of a default. It's commonly referred to as a confession of judgment. If the loan documents contain a cognovit clause, it allows for the lender to file suit against the borrower in the event of a default, and to immediately obtain a judgment without any prior notice to the borrower. Obviously, that's potentially a major problem for a borrower because they don't receive notice of default, they don't receive an opportunity to cure, and they don't have the right to raise any defenses or effectively to have their day in court.What are some of the main things that a borrower for a commercial property should be aware of with regards to loan documents?Most commercial real estate loans are non-recourse loans, which means that in the event that the borrower defaults, the lender’s recourse is to foreclose on the property. If the value of the property isn't the amount of the judgment, the lender does not have the right to go after the borrower personally, for the deficiency. However, lenders under non-recourse loans typically require what are referred to as bad boy guarantees, or non-recourse carve out guarantees. Principals who are signing those guarantees need to be aware of the circumstances under which they could have personal liability. Early in my career, bad boy guarantees were limited to truly bad acts like fraud and material misrepresentation, misappropriating funds, bankruptcy and similar bad acts. Today, bad boy guarantees have grown in length but many of those things do not necessarily result from a bad act of the borrower, they could be change in economic circumstances or more macro-economic things that could trigger liability. You have to be careful in negotiating the bad boy guarantee and those bad acts, because they trigger personal liability to the principals who are signing them.Top things to watch out for in loan documents:Lenders requiring not just a mortgage on the property as their collateral, but also a pledge of all of the ownership interest in the borrower. Clients have agreed to that, they signed it before engaging counsel, once they've agreed to it, it's really hard when you get to the loan documents to try to undo it but that is one of those traps for the unwary.&nbsp;With a foreclosure you have to go through the courts, that process can take six to 12 months. With a pledge of equity, the lender can do a UCC Article 9 foreclosure, which only requires 10 days’ notice to the borrower before a public or private sale of the property is held.Adam [email protected] us at The Advanced Real Estate Investing Summit: www.aresummit.com

Where are opportunities in industrial investing? Is it through value add or development, single tenant or multi-tenant? Where are industrial buildings more in demand for: near major airport hubs, trains, or freeways? Amy Calandrino, CCIM, SSIOR, founding principal of Beyond Commercial shares her knowledge.You can read this entire interview here: https://tinyurl.com/5d9yzvzm&nbsp;How can someone add value or create an industrial opportunity for themselves?Doing a gap analysis of what’s going on in the particular market that you’re looking to invest in and see what industries are happening there so you know what product you should develop, study how they have been leasing up, and at what rates. It's going to take a couple of years before it comes to fruition. I see opportunities infill such as ghost kitchens. Older B and C buildings sometimes become antiquated and if you feel like there’s a large enough need, building ground up is a good call. There's a big opportunity in refrigerated industrial because if you don’t build that from the beginning, you can’t always retrofit it, and that refrigerated space goes really quickly.Is there a location that is even more ideal for industrial: major airports, trains or freeways?For industrial, you want to be close to railways if you are getting a lot of products. I have a client that has 10s of 1000s of square feet and they are more in the northwest area because they don’t really need to worry about the airport, but they do get some product by rail that they work through. The most popular right now, if you’re doing a heavy distribution, it’d be more on the east side of town (in Orlando) so that you’re close to both the port, the airport and you have a rail. Having all the options makes it the most expensive. Regarding ports, the majority of traffic used to go come to California and it would have to work its way all the way across the country, we’re now seeing a lot more shipments going through the Panama Canal and then coming to the ports and then working through rail serve to get to people or even working up the river ways. My answer would be all the above, however, with a slight emphasis on ports on the East Coast are more valuable than before.Buying and selling industrial today:If you are not a cash buyer and you’re acquiring, or if you are wanting to sell, being much more creative in structuring a deal is going to create win-win opportunities. If you are a seller, perhaps consider the opportunity to provide seller financing, consult your CPA, but having an installment sale could be beneficial and that could keep you having some cash flow coming in and help to mitigate some of those losses. If you’re undercutting the bank by a point, it’s something that you can consider. I’m seeing more of that happening because if you’re going to the bank and you’re paying 7%, the seller may not get what they want, but I think that maybe the seller can get more if they look at doing creative seller financing.&nbsp;If you’re building anything new, understand that right now, we haven’t seen material and labor come down, I don’t expect any huge increases to the labor and materials as far as constructions, but it’s still high, so it makes it challenging.Amy Calandrino(407) 641-2221www.beyondcommercial.comJoin the Advanced Real Estate Investing Summit on Oct 19 &amp; 20: www.aresummit.com

Today I share latest things I have learned, some updates on the ponzi schemes that are rising and what is new in real estate investing.Read this entire episode here: https://tinyurl.com/26msmatp1. There’s a clause that banks are putting in some of their lending documents that is called cognovit clause – google explains that a cognovit is&nbsp;a type of confession of judgment, it refers to an acknowledgment or confession made by a defendant that the plaintiff’s cause is legitimate. It permits judgment to be entered without a trial for the purpose of saving costs.2. Warren Buffet famously said&nbsp;“Only when the tide goes out do you learn who has been swimming naked”. The tide is out right now and we are starting to spot the naked swimmers.There are more ponzi schemes coming to the surface, it feels like it’s almost one a week. Here are the most recent ones:Real estate developer Robert Matthews has been&nbsp;sentenced&nbsp;to over five years in prison for multimillion-dollar frauds spanning multiple states, including Connecticut, Massachusetts, and Florida.&nbsp;The 65-year-old faced charges related to real estate scams that caused losses of over $30M to banks and investorsReal estate investor Sean Tissue was&nbsp;sentenced&nbsp;to six-and-half years in prison for fraud involving a $3M investment and bankruptcy.– As per court documents, Sean Tissue, also known as Sean Ryan, was the mastermind behind a substantial real estate investment fraud scheme between 2015 and 2021.A carbon capture ponzi scheme promising returns of ~ 40% yearly is being investigated by the SEC. They raised anywhere between 150-250M. This person was being a lead speaker at some real estate groups and he was the “carbon capture” go to person. In the news:Clutter, a storage and moving startup once valued at ~$600M in 2019, is being forced to sell at a steep discount in an auction of its assets. The premise for Clutter was that they would come pick up your items, they’d take pictures, and they would move it all for you into a warehouse far from your main city to avoid high real estate costs, and store it for youWeWork casted substantial doubt over its ability to continue operating amid liquidity and profitability challenges. WeWork told investors that the next year would be a make or break for the company. Sam Zell said in the early days of WeWork that he has never seen a model like this work (where they commit to a long term lease, but their customers are on month to month contracts).Office leasing in Manhattan increased by 20% MoM in July to reach 2.3 million sq. ft.Manhattan’s retail market is showing signs of improvement, with a growing number of tenants signing new deals.Asking rents in Miami grew 12% YoY to reach $65.03. Availability of Class A properties in Miami declined 20.6% YoY.The Mortgage Bankers Association predicted that&nbsp;commercial and multifamily mortgage lending would decline by 38% YoY. What do I see&nbsp;here? So many opportunities! There are 40% less transactions being made this year, less competition, better deals, time to buy!I recently started using this excellent tool,&nbsp;<a...

What is the step-by-step guide to build a real estate project from scratch? What are the best practices for the construction of self-storage, RV, and boat storage? What are some of the main legal items to keep in mind?&nbsp;Melissa Anderson&nbsp;of&nbsp;Forge Building Company, shares her knowledge.Read this entire interview here: ⁠https://tinyurl.com/y8sjpt89If someone wants to build a project from scratch, what would be the step-by-step that person would have to take, from who do they have to contact first, all the way to the team that they need to work with until completion?Once you see what the parcel is and what it sounds like, you’re going to identify what jurisdiction has authority, whether it’s a city, the county, or a township, and then you’re going to start talking to them, to see what is the approval process in order to build on this piece of property and to find out how they feel about self-storage. If you’re going into a municipality that has a really bad taste in their mouth about storage, they’re going to put up every hurdle they possibly can because they don’t want you to build self-storage and so, that is something to be taken into consideration when you are looking at that piece of property and before you close on.After you get it entitled, who should you start working with at that point?You have your property and title and the next phase is what I would call the design phase. That’s when you are going to have your civil engineer, your architect is going to start working on elevations, and a lot of the details of the building. If the jurisdiction has design requirements, that is going to be working up those architectural drawings to show that you’re meeting the design requirements of that municipality. For instance, let’s say that on the street front, they don’t want to see any of the metal paneling, in that case, you’re going to have to look at other exterior finishes such as stucco, Splitface, veneer, and they’re probably going to want it to be aesthetically pleasing. If you’re in an environment where they have very strict design elements that they want, to say that they want it to match the feel and the look of the rest of the city, then that architect is going to understand what elements to put into the construction documents. That’s what you’re doing during the design phase, you are building the construction documents that are going to give the subcontractors, it’s going to give them all the very specific details of what they need to bid on the project and what will be executed during the time of construction.What are some of the main things to keep in mind regarding legal when negotiating with anyone?time is really important, wanting to know how quickly you can get the project done, and what obligations each person is going to have for those. Having realistic expectations is important. I've seen this in projects where the GC really wants this job, and they'll say, "Yeah, we can get the project done in nine months." And now all of a sudden, that owner has that expectation of nine months. Well, as you start working with all the subs, it may not be that and so I really encourage owners to have realistic expectations. Then, the contractual amounts, when are you going to be paid?Insurance is a really big thing, making sure that the GC has the correct general liability and builder's risk insurance, and that they are also making sure that all of their subs have it. One of the biggest things is safety. Is it a GC that values a safe working environment? Are they holding

Why is there an opportunity for online lead generation within commercial real estate? What are some areas that you can be investing in an industrial that are showing very good solid returns and low vacancy rates? Max Fisher, an industrial broker with BRD Realty, shares his knowledge.Read this entire episode here: https://tinyurl.com/3um3kz3zWhere do you think there is an opportunity for investing in the industrial market right now?It's a tough time to invest in commercial real estate right now mostly because interest rates and the banking world are completely different and seller expectations are different today from one that where they were three years or two ago, but two deals that I've recently invested in, they're both land deals, and they're both infill sites. These are sites that are zoned industrial, but they also have the ability to build some retail. The first one was split up into four parcels to industrial and then to retail pads for drive-throughs or any other type of retail uses. So, one of those pads is in escrow now and the buyer has gone hard, that's done well. The other one, we bought for pretty cheap, because we bought it when the seller has it in escrow with the Self-Storage developer, and then the Self-Storage developer backed out. And then that was also during a time when the Fed kept raising rates in the economy seemed like it was going pretty well. So, I think like infill industrial land, and I'm also just a big believer in a Flex business park, small to medium bay, class B, class C type of industrial.Is industrial, being overbuilt right now? Where do you see the lease rates going?There are two different types of industrial products: small to medium bay and then there’s the bigger assets. The small to medium space really hasn’t been built so, I don’t think it’s being overbuilt. I think that there’s a supply issue and even in some instances, these business parks are being demolished and redeveloped for mixed use or other types of uses. But I do think in the bigger base, maybe in some other markets, some bigger markets, where there’s a lot of lands, and there’s a lot of spec development, possibly being overbuilt, but I’m very confident in business parks, and I don’t think they’re being overbuilt, and that’s fine, like Class B, Class C, industrial business parts.What are some of the things that we should keep in mind as property owners to make sure that we put on the lease and some things that are really non-negotiable with regards to industrial?Having space already clean and marketable for those prospects is most important. One of the things that we actually do is we know who that tenant wants more warehouse than an office. So, sometimes when a space comes available, and there’s more office build-out, just demo it out before you even take it out to market. Another key thing for industrial is if there’s some way that you can build some type of yar or industrial outdoor storage to complement that building, that’s a great value add to a property, you can even get higher rates and take some unused land and just create some more income that way. Overall, just creating a space that’s clean and marketable to your prospect with a mostly warehouse-less office is key.Max Fishertwitter.com/maxfisherRE<a href="https://www.industrialtucson.com/" rel="noopener noreferrer"...

What should we keep in mind in creating a solid operations arm of a real estate company? How to hire the best of the best? What are the tips for creating a great company culture? Anne Mari DeCoster, President &amp; COO at&nbsp;Kingdom Storage Partners &amp; Self Storage Investing, shares her insights.Read this entire interview here: https://tinyurl.com/mr3h8emfWhat are some of the biggest things that we should keep in mind with regards to building a solid operations arm of a company?It’s critical that you keep your eye on the numbers. Every software system has a management report, and the management report will tell you where dollars are leaking out. You can develop the best proforma in the world but if it’s not implemented the way you intend, because you have invisible leaks, then you’re not going to succeed the way you should, you’ll still succeed, but not as well as you should. It’s really easy to turn that over to someone else and trust them, but it’s not always wise. I’ve been heard to say that not every manager steals, but every owner is stolen from. To prevent that, keep your eye on those numbers.I’m a believer in consistency and simplicity. Whoever is running your shop, whether it’s a remote manager, or an onsite manager, it’s important to understand what are your processes, how you do them, and do them that way every time. We have a simple business model and I always encourage people to keep it simple, don’t complicate it with extra services that are logistically intensive, or manpower intensive. By keeping it simple, and having simple procedures and implementing them across the board, you up your game. Things fall into two camps: either an owner is frustrated that they can't get their manager with remote, or third-party management, or on-site to do what they want. And then others would say, I don't understand why they have a problem. And the difference between the two is accountability, people will deliver what you inspect, look at it, measure it, take a look at the MSR, if you're asking questions, you'll get much better responsiveness.What are some things that you look for when you are interviewing someone for either a low-level job or a high-executive job?That's one of the hardest things today, isn't it? We used to be very common in the workplace, pursuing excellence, being committed to doing a good job, you go to work every day, compassion is important, and caring about what you do - these are the things that I look for. And in the process of talking with people, I try to understand what their values are and see if there's an alignment of values. If you're very clear on your values, you establish your priorities based on your values, and then your decisions line up with that. That doesn't mean decisions are easy, but they line up. If you're talking with someone and you can tell that they don't value people, and if valuing people is important to you because you want people who rent from you to give you five-star reviews because you cared enough to make sure they could access their Christmas presents on Christmas Eve to put them under the tree on Christmas morning. How do you create an excellent company culture from the beginning?Culture flows from the top down. "They don't care what you know until they know that you care." A lot of that is conveyed by being really clear on your core values as a company, you know what you're about as your mission and your core values, your customer care, attention to detail, those are enough in running a property. Convey it clearly and frequently. You can't say, "we are a problem-solving organization", and keep kicking the problems...

Dr.&nbsp;Doug&nbsp;Duncan, Fannie&nbsp;Mae's Chief Economist gave his Economic Forecast in June 2023. Dr. Duncan is the recipient of the prestigious Lawrence R Klein Award for Most Accurate Forecaster Over The Past 5 Years, he was also named by Bloomberg and BusinessWeek as one of the Top 50 Most Powerful People in Real Estate. Learn from one of the smartest economists in the U.S., who advises the U.S. government and the Federal Reserve on real estate matters. He delves into the topic of bank failures, and sheds light on what lies ahead for interest rates.Full video recording: https://bit.ly/43YaODASlides: https://bit.ly/444rIAoDr. Doug DuncanFannie MaeJoin our Investing Club: www.montecarlorei.com/investors--- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

Dr.&nbsp;Doug&nbsp;Duncan, Fannie&nbsp;Mae's Chief Economist gave his Economic Forecast in June 2023. Dr. Duncan is the recipient of the prestigious Lawrence R Klein Award for Most Accurate Forecaster Over The Past 5 Years, he was also named by Bloomberg and BusinessWeek as one of the Top 50 Most Powerful People in Real Estate. Learn from one of the smartest economists in the U.S., who advises the U.S. government and the Federal Reserve on real estate matters. He delves into the topic of bank failures, and sheds light on what lies ahead for interest rates.&nbsp;Full video recording: https://bit.ly/43YaODASlides: https://bit.ly/444rIAoRead the entire interview here: https://tinyurl.com/wzyy5rc8What is the underlying theme for economic activity over the succeeding years?Each year, I spend time in December or January thinking about what is the underlying theme for economic activity over the succeeding years. The reason I do that is this isn't a check against ourselves, the actually team does this, but I want to know whether at the outside of a time period. We had a good feel for the major impulses that were underway in economic activity in particular housing, because as the business Fannie Mae is in and then we use that to test ourselves across the course of the year, what did we miss, if anything or we are just lucky? Did we just make it a lucky guess? But it's also something that we can hang the discussion on when we're talking with people out speaking. So, the interesting fact of it is the optimal number of words for that theme is less than seven. People will remember if it's less than seven words, if it's more than seven, it gets lost so this is for awaiting improvements and affordability. It's not just affordability and housing that rise in interest rates means affordability across the economy and credit affordability, that kind of issue. So, it's intended not just to focus on housing, though it certainly does apply to housing.Housing market supply issue.We believe that geopolitical change is going to lead to the restructuring of supply chains and that's time consuming and expensive. The Fed is going to be leaning against the restructuring of supply chains, and you're seeing the stories emerge now about how difficult it is to replatform your company from one country to another country to strike relationships, shipping and transportation relationships, restructuring those things can be time consuming and expensive. We felt like that we got ahead of that one before&nbsp; others did. That's going to be a contributor to the underlying rate of inflation for some time.What is the relationship between housing and the business cycle?There is a typical relationship between housing and the business cycle. As the Fed tightens on anticipation of the rise in inflation or in response to the rise of inflation, interest rates go up. Housing is very interesting since this is the first thing that happens: residential fixed investment, which is dynamic targeting building starts to slow; then, the next thing that happens is New Home Sales start to slow because builders are building less and so there are less being sold and then existing home sales start to slow. When the recession is full force and fit, interest rates come down, construction starts to pick up, new home sales start to pick up and existing home sales start to pick up so there's a predictable relationship. That was not the case in 2007 to 2009 because the center of the financial problem was the decline in underwriting standards in real estate so it was the core of the issue.<a...

What's the state of commercial real estate in San Francisco, California? I will be giving you my personal insights of what I have seen happen to the city and what I think has led the city to its current demise.Read this entire episode here: https://tinyurl.com/mryyfc6b1. A San Francisco office building that was worth $300 million pre-pandemic is now in contract for around $60 million. And that is between 200 to 225/sf. The building next door at 550 California St is reportedly in contracts for $130 a square foot. Lastly, a friend of mine put an offer in an office building about a month ago, her offer was $75 a square foot and although she did not get the building, she ended up going to the second round, which means that people are considering $75/sf offers. Let that sink in for a bit! Rent was getting close to $100/sf per year. And now you are able to buy an entire office building for between 1.5-2 years worth of rent pre-pandemic.2. Uber announced that they will be leasing out their entire office building in San Francisco.3. Google announced that they will be shedding 1.4 million square feet of office space in Silicon Valley. As we all know commercial loans are 3, 5 or 7 year fixed, a lot of them are coming up and they have to refinance at not only double the interest rates, but also they have to refinance when their office building is completely vacant - and nobody will give you financing for that. Operators are returning the keys to the bank, or they are having fire sales which is what happened with this 350 California Street building.4. Nordstrom is closing both of its Stores in downtown San Francisco, citing the changing dynamics of the area that hasn't recovered since the pandemic and has been in the spotlight for crime.5. AT&amp;T just announced that they're closing its flagship store, citing declining customer visits, occupancy and sales.6. Cinemark also just decided to permanently close the Century San Francisco Centre 9 and XD theater following a review of local business conditions.7. Whole Foods in Downtown San Francisco Closing a Year After Opening due to safety issues.8. Several Other Major Retailer closures since the pandemic: Saks Off Fifth, Anthropologie, Office Depot, Amazon Go, The Real Real, CB2, Banana Republic, Athleta, The Container Store, Crate and Barrel, Disney, Marshalls, H&amp;M, The Gap. Imagine how many hundreds of 1,000s if not millions of square feet will be available for rent right now in the retail space alone in this...

Why should a busy professional invest in real estate? What are the benefits and the risks of investing in a syndication? How do you evaluate a deal right now and how to vet operators? What are standard fees that real estate syndicators charge? Our anonymous guest shares her knowledge to us.Read this entire interview here: https://tinyurl.com/bdtzrpypWhy should a busy professional invest in real estate in general?Real estate has many benefits, unlike crypto or stocks, it's a hard tangible asset and it's generally stable and less volatile. So, there will always be some value in the land and the building itself and you can use leverage or debt to purchase it. For example, if you purchase a property and borrow 75% of the property's cost, and the property value increases 25%, you've essentially doubled your money.&nbsp; You're basically borrowing money to generate income and grow your wealth.Real estate is also great for an investor who has a long-term horizon, it's a long-term game because real estate tends to appreciate over time, if you hold on to a property for many years, you gradually grow your wealth over time. You can also force appreciation on a property by making some repairs or improvements and you can also reduce expenses, that will help you increase value and income. Given our high inflationary environment, another major benefit of real estate is that it can be a hedge against inflation because property values tend to increase over time, especially in an inflationary environment. Leaving money in the bank can sometimes cause it to lose value when there's inflation.There are several tax advantages, such as writing off the depreciation, which is the wear and tear of a building and it's over a specified period of time. It's possible to receive positive cash flow even if you have a tax loss.How do you vet an operator?Talk to them, try to meet them on a zoom call or ideally in person, listen to what they are saying and ask yourself: are they listening to you and interested in learning about you, what is their track record, do they have experience in this particular asset class?Another good question to ask the operator is, are they co investing in the deal and if so, how much? In general, I have tried to measure their character, do they seem overly confident or do they have a more conservative mindset, are they dodging your questions or are they being open and transparent and that gives you a sense of how trustworthy they are. A way to evaluate this is to understand if they've encountered challenges or failures or how they've handled underperforming deals and what they learned from the experience because everyone has failures, so transparency is the key.The most important question to ask yourself is what does your intuition tell you about the sponsor? Women tend to be incredibly intuitive and we're very attuned to what our gut is telling us so at the end of the day, you should listen to your gut regarding a sponsor. You can also do background checks or Google them as well. Lastly, you should do due diligence on the deal itself, review the properties and locations and understand how they analyze the deal. Look at their projections for returns, are their numbers too positive? Do they seem to be over promising in terms of their returns, or are their returns much higher than average? Those are good questions to ask yourself.What's the standard fee from acquisition all the way to exit fees that sponsors typically charge?Asset management fees are anywhere between one and 2%, acquisition fees can be between one and 3%, the disposition fee is typically between one and 2% and the construction fee is typically around 5%. The total is up to 10%.Sign up to...

What are some techniques in decreasing property taxes when the economy is doing great and values are going up, and when the economy is in a downturn and values are going down? How often should you request a reassessment? How to approach properties in multiple states?&nbsp; Nicholas Mau, Partner at FirstPointe Advisors, shares his knowledge.Read this entire interview here: https://tinyurl.com/2pk8c3adWe are currently in a recession and there are two scenarios of appealing taxes: when the economy is doing great, and they want to come after you and get more money for your properties; and when the economy is going down and property prices decrease. What are techniques for decreasing taxes when the economy is doing well?You must take into consideration different factors that you have for that property, the income producing potential, what's the end place income, and comparing that to what the overall market looks like, the market occupancy, market rental rates, market cap rates, etc. Diving more specifically into the nuances of the property is going to be where you'll find opportunities when it comes to properties in an up market.The property appraiser is going to have more of the shoe on their foot when it comes to valuations in an up market. The sales are going to be supportive of higher values, the incomes are going to be supportive of higher values so this is where it really is a lot more imperative to be diligent in the review of the individual property to ensure that you're taking into consideration all of the nuances. You should look into what are some of the challenges that this individual property may have, are there little things that are not evident to the property appraiser from their mass appraisal perspective because they are required to value all the property within their jurisdiction so they're looking at the overall market factors. Market cap rate might be 4% for an industrial property, but is that the correct cap rate for the property that you have, which might have an additional risk factor associated with it, where there's near term leases that are coming due or there might be some different occupancy challenges that they may not know.There's hesitation in the community to lower values when the market tends to turn downward. Make sure that the right rental rates are being used; if rental rates have decreased, ensuring that the appropriate market rental rates are being applied; make sure that the appropriate vacancy and collection losses are being considered and that any nuances with the property in terms of near term lease expirations are being considered, or credit defaults.A lot of office properties are struggling where tenants are vacating because they don't need as much space. Property appraisers don't necessarily know these things are occurring until it's brought to their attention, so it's important to make sure that that type of information is being put forth to them and being provided to them.Sales velocity has slowed dramatically across a lot of property types in the commercial real estate world. When you have a lot of sales and you have brokers that are selling deals at 3.5, 4.5 cap rates, everybody's willing to sling out their cap rate when cap rates like that transact. When properties do transact, the brokers and property owners are a lot more tight-lipped on what is the cap rate that properties traded for because a lot of people are taking haircuts on these deals.Rely upon building cap rates through the weighted average cost of capital, or an equity dividend rate, or looking at the debt service coverage ratios and different things like that to try to come up with an accurate...

What are some top lessons learned from lawsuits and how to avoid potential litigation in the future? Where is NYC going with regards to tenant laws? What are some of the best hiring practices in order to grow a real estate company? Top commercial broker in New York, Bob Knakal, Head of New York Private Capital Group for&nbsp;JLL, shares his insights.Read this entire interview here: https://tinyurl.com/2wuc94kyWhat have been the top three lessons learned from lawsuits that you have seen out there? How can we avoid potential litigation in the future?The number one advice relative regarding litigation is don’t get into litigation. Nobody wins except the lawyers. Even lawyers will admit that in litigation, nobody wins. Avoid it, it would be my number one lesson to learn from.&nbsp;Number two, avoid litigation. The easiest is with full disclosure.&nbsp;The brokerage law in New York requires that the broker convey to a buyer what they know, or what they should have known. You can’t say, I didn’t realize that there was a hole in the roof, even though all the apartments on the top floor&nbsp;are flooded&nbsp;every time it rains, because you didn’t know that you should have known that. Was there a fire in the building two years ago? Was there some condition that you either knew or should have known? Do you have to convey that to the parties?Also, in New York, if you’re representing a buyer and a seller, disclose&nbsp;who were you getting paid by, if you’re getting paid by someone, let the other party know.&nbsp;You will&nbsp;eliminate&nbsp;many potential issues relative to litigation by being an open book, being transparent, communicating, over-communicating. That’s something that’s generally good in real estate, to over-communicate rather than under-communicate. Having a lot of transparency avoids a lot of potential problems.&nbsp;What are some of the best hiring practices? What do you look for&nbsp;not only from the brokers that work with you, the agents that work with you, but also from the rest of the team that supports you?Real estate is a very competitive business, and it’s also very team-oriented. We enjoy talking to people that played team sports growing up.&nbsp;We also like to talk to people who exhibited excellence in some type of competitive area, whether it was captain of the debating team or president of the school newspaper, or something that was a competition where they excelled.&nbsp;Secondly, we looked for people who didn’t&nbsp;necessarily&nbsp;have the best grades in the world or the best education, but were very motivated. We used to joke around that we would only hire PhDs. And those were folks who are poor, hungry, and driven because they were going to work hard. But besides being hungry and driven, they must have passion for the business.&nbsp;We have people who had a passion for real estate, not that they thought they could make a lot of money, but did real estate resonate with them?&nbsp;That was a big part of what we thought led to success in the business because no matter how good you are, you’re still going to have tough and challenging times. But what enables you to get through that challenging time is that you love the business. And we looked for that passion, the most important of&nbsp;them all.With the real estate investing mindset, is there anything else that is important for our audience to know?A broker should specialize in one thing&nbsp;really&nbsp;well. Investors should do the same.&nbsp;Pick an area of town, a city or region, a type of property, a type of transaction, or a type of something where you can know that particular thing better than others. This ability gives you a competitive...

Why should commercial real estate brokers represent only one party? Is buying prime real estate at a top price a great strategy? What are some techniquest that buyers and sellers have used when purchasing a property? Top commercial broker in New York, Robert Knakal, Head of New York Private Capital Group for JLL, shares his insights.&nbsp;Read this entire intereview here: https://tinyurl.com/2jyny68pPart of your business is focused on representing one party only, can you share a little bit about that and the reasoning?Most brokers represent both sides, I've always focused my entire career on seller representation. As a broker, working with control is important. Many sellers are optimistic about the value of their property, and when the value gets down to the point where it is truly market, there are a few buyers that would buy at that price. I always wanted to work on the seller side for a couple of reasons: 1) We like to avoid conflicts of interest. We don't represent buyers. 2) I don't like to have to remember what I say to anybody. If I'm always working for the seller trying to get the highest possible price, I don't have to remember what I say. And that has worked out well over the years and as a broker to the extent that you can specialize in something, and articulate what you do and how you do it, it enables you to differentiate yourself from others. Back at the old company, we always say that we only represent sellers, we only sell properties, and we only work on exclusives. And that was very easy to convey, easy to understand, and it let clients know exactly where we stood.George Ross, Trump's previous attorney, always talks about the fact that the best deals were the highest-paid deals. Can you attest to that? And how does one go about the first couple of years of paying top price, waiting on that until it becomes the next phenomenal deal?In terms of buying property here, there used to be an investor in New York named Saul Goldman. He owned more property than anybody else in New York. I had the good fortune to meet with him back in the mid-80s when I started in the business. I said to him Mr. Goldman you own about 500 buildings, how are we able to do that? How did you amass such a big portfolio? He said Bob, I paid more than anybody else. That's the way he did it and that's the way you have to do it. I applaud him because he built an unbelievable portfolio and, even though at the time, he may have been paying a lot, in retrospect he didn't pay that much.People must have reserves. The most popular type of transaction in New York is multifamily, and often, regardless of what the cap rate is, there's very little free cash flow in the first few years. You must be able to break even. A lot of folks are counting on appreciation, but it's challenging. What are some techniques that buyers have used when purchasing a property after going in contract? What is the best way to approach it?I've seen a lot on all those transactions I've done, but I haven't seen it all. It seems like in every deal there was a new thing that comes up that I wasn't prepared for. From a buyer's perspective, buyers try to get contingencies to their transactions to the extent they can. That's rare in New York, we very rarely have any post-contract execution or due diligence. And by not having that post-execution due diligence, the contract deposit is hard when it goes up. There are times when people will make claims of breaches if they don't want to close, that's generally difficult to prove. But the most common area that creates an issue for a buyer is environmental. And there are several...

This post covers a few different real estate investing topics: what is happening in the market today, how can diverse teams make you stand out from the competition and increase revenue, and I'm also giving a quick update on our tech stack.Read this episode here: https://tinyurl.com/7evvpwe What is happening in the real estate market today?The following are four different people that are having issues that I learned about just last week:1. We are already seeing people go bankrupt in the multi-family space: 3,200 units from one operator were just returned to the bank in Houson. 2. Another big time person in the multi-family space sent an email out to their investors saying they will be doing a capital call.3. I spoke with someone else that is currently extremely busy helping several owners add value to their multi-family properties, they weren’t good managers and are now hanging by a thread, if the value isn’t added, it’s over. 4. I also met someone else that partnered up with operators, this person was responsible for raising the funds, and now the management company that the operators hired is so bad that they only have 3 months runway. This person asked them multiple times to change management companies, and because the operators think the management company is highly regarded, they are not budging. Now what? The capital raiser not only updated all of their investors on the situation that they're in, but they're also speaking with attorneys and the attorneys said to keep a record of all conversations that they're having with the partners.Why is Diversity Important?This is a very important topic because I see a lot of non-diverse teams in the industry. And it's a proven fact that the most diverse companies outperform their less diverse peers by 36% in profitability. One study by Gartner revealed that a highly diverse environment can improve team performance by&nbsp;up to 30%. Diversity can also lead to better decision-making and higher profitability. When I talk about diversity, I don't only mean people of different colors, I mean people of different backgrounds, countries, younger, older and everything in between, because we have experienced different teams and therefore are more creative in the unique scenarios that arise when building companies.Men vs Women: Who is a Better Operator?This is, in my opinion, the best kept secret that is not a secret: women are fantastic operators, women led companies are simply ran better and are more profitable. This is because men and women are different in nature, and that is a beautiful thing because we must work with people that are strong where we are weak.If you don’t have a woman in your exec team, you definitely must look for one, and I’m not saying this because I’m a woman, I’m saying this because we are very different by nature, we care about different things, we observe different things, and we have different strengths and weaknesses that I think, combined, make for a super powerful team. And I’m not just saying this for the sake of saying it, it’s proven that women led companies perform better, and I’ve seen this both in the tech world and the real estate world. I’ll be generalizing, but according to my personal experience, men have big hairy goals and they don’t really think about the details of those goals. Women, on the other hand, are way more careful and conservative. Imagine how we can both lift each other up to a much...

How to deal with problems with your properties? Why did I select self storage? How to get your first deal? Brainstorming exit strategies with your network. This is the talk I had with Beth Azor at her conference Women in Real Estate Investing Summit.Watch this interview here: https://tinyurl.com/mr47yc8pDefine "I learned everything I could about self storage"Educating yourself, reading books, I hired a consultant that I heard speak on a podcast to help me analyze my first few deals. How did you find your first deal?It took me 2 years to find my first deal. I found it on crexi, I didn't have a team calling property owners to find off market deals, and the deal ended up being a portfolio of 3 car washes and a self storage. I didn't even bother asking anyone about car washes, that was mistake number one, and I didn't even go to a conference.How many deals had you looked at before selecting this property?Tons and tons, probably 1,000. It took me two years to find my first deal, I quit my job before finding it, which I don't recommend, you should find your first deal and then quit.Where you worried about money?No, I knew I could always get a job if it didn't work out. Everyone is fully capable of building anything from scratch.What interested you to put an offer in this deal?Car washes have a better cap rate because it's a much more hands on asset class, the numbers made sense.What interested you about self storage?Self storage is recession resistant, it does well in good times and in bad times. In good times people buy more, keep more and don't look at their credit card bills. In bad times, they downsize, they go from a 3 bedroom home to a 2 bedroom home and they need storage, and getting a storage is a lot cheaper than having that bigger home.How do you like owning something outside of your market?I went against my mentor's advice to buy things within a 2 hour driving distance from where you live and, for the car washes I don't like it, for the self storage, it's much easier to manage remotely. How did you pick your lender?You have to ask your local broker for recommendations, the sales broker in this case. The first couple of lenders said no. I kept going back to the broker to get more lender recommendations, and eventually one of them said yes. But 5 days before closing that lender called saying that they were switching the terms a bit, that because I didn't have experience operating a property, they'd like to retain the entire amount of the loan that I had in stock locked for the entire period of the loan. I called the president of the bank and I said, this doesn't make any sense, why would I even get a loan and not pay cash for it if you're locking my cash? We ended up meeting in the middle, putting a much smaller amount on hold for a couple of years, and after I prove myself as a good operator, they will remove that contingency.You were now the owner of three car washes and a self storage, what happened on day 2?Let's go to day 9 when one of the roofs caved! Thank God for Nationwide, they ended up paying within 2-4 weeks. The self storage has been smooth sailing, we have a local person that walks the facility about once a month, the tenants lease the units online. Today about 80% of self storage is still owned my mom and pops, and they're now retiring, they haven't implemented technology in their facilities. You can put cameras if they don't have it, you can install locks that will open with their phones. They are able to rent online, they get a unique code to the...

Commercial real estate has been a popular investment asset class for many years due to its ability to generate strong returns and provide diversification benefits to a portfolio. Up until last year, the challenge has been finding value-add opportunities in a highly competitive market, with compressed cap rates. Today, with the increase in interest rates, and a slow down in the economy, we have a different set of challenges, and our focus must shift to how can we make sure that a property is equipped to not only survive, but also thrive in this environment. In this article, we will explore some key considerations for passive investors looking to invest in commercial real estate in our current economy.Read this entire episode here: https://tinyurl.com/t2ycx99zUnderstand the market dynamicsThe basics are still important: is it a market that is growing, does it have a diverse industry, does it have a low poverty rate, what are the housing statistics such as appreciation over the last decade and average household income? If not in a major market, is it near a major city that has been growing over the last few years? This information can help you make informed investment decisions and avoid making costly mistakes.Define your investment objectivesEvaluate if this is something you are comfortable with. Look at the previous economic downturns: how long did they take to recover? When was a good time to buy? While it’s impossible to predict the perfect timing for anything, we must understand at what discount rate we are comfortable purchasing at, knowing that we will be paying more for the mortgage (at least temporarily). Also remember, the downpayment will be smaller with the current cap rates going up. What do these numbers look like compared to the higher purchasing properties at a low cap rate? How many years of the higher interest rate will it take to get to the entire discount that you received? In some of our calculations it was as high as 50 years.Consider passive investment optionsOne of the benefits of investing in commercial real estate as a passive investor is the ability to invest in a variety of different vehicles. Learn what are the pros and cons of each of these options.Diversify your portfolioDiversification is key to mitigating risk and achieving long-term investment success. Define three assets that are non correlated to each other. For example, real estate and the stock market. Real estate is on a different market swing. It does not trend up and down with the stock market, or energy.Partner with experienced professionalsInvesting in commercial real estate can be complex and challenging, particularly for passive investors. That’s why it’s important to partner with experienced professionals who can help guide you through the investment process. This may include investment advisors, asset managers, and property managers who have deep knowledge and expertise in commercial real estate.When working with a new operator, make sure to find someone in your network that has worked with that person in one capacity or another, and check for references. Do a deep dive on the underwriting of each property, if you’re not sure how to do that, hire someone to go over it with you.Focus on long-term valueCommercial real estate investments are typically long-term in nature, and successful investors focus on creating long-term value. This may involve finding ways to improve the physical condition of the property, increasing rental income, implementing operational efficiencies to reduce costs, or expanding the property. By focusing on creating long-term value, investors can position themselves for...

What are some strategies available for business owners and real estate professionals to decrease their taxes? Tim Gertz, CPA and Partner at Provision Wealth, will be exploring these scenarios with us.Read this entire interview here: https://tinyurl.com/mrxdyyanFor business owners, including law firms, dentists, etc, what are some tax strategies available?The tax code is created for you. That is the incentive based model that has been created for you as a business owner to create wealth, or to create jobs, and more opportunity for them to tax more people. For business owners, the sky's the limit. In order to take a deduction under the code, it has to be ordinary and necessary for what you're doing. Every business is different, but as long as you can look at your business and make sure that you align your facts with what you're trying to do, you can duck almost everything. There are huge opportunities, we still have bonus depreciation in play. If you buy any equipment, meals, travel, auto expense, home office, it continues to go on.The inflation Reduction Act included huge opportunities for solar, if you have a commercial office building, you can put solar on it, you can get up to a 70% tax credit this year on that. On top of that, if you don't have a tax liability, the IRS has given you an opportunity to sell your tax credits. Not only do you have the opportunity to get a tax credit, but if you can't use it, you can sell it. Secure Act 2.0, which was signed into law in December, as incentives for setting up retirement accounts, where they will pay for the setup of the retirement account. It will be a dollar for dollar credit. When you look at businesses, look at what are you trying to do, and align yourself to what you're trying to accomplish, then everything would be deductible. If you're saying: I want to do this, then what is it that I need to do to make this an ordinary necessary deduction so that I'm aligned with the law, and I'm not doing anything that's in the gray areas, but it's ordinary and necessary, so I can deduct it.For real estate professionals – what are the tax benefits for them? Is this the best profession for tax purposes?It is. There are nuances here and there, a lot of times, I've a lot of people that are active in business A: the husband has a business, he is a dentist for example, and the wife is a real estate professional. That gives us an opportunity.Real estate professionals are huge, especially after 2017 with the advent of bonus depreciation on used assets, now we are able to create this huge loss in real estate that can offset all the income in this business that the other spouse has. Being a real estate professional does open a lot of opportunities. You're investing in an asset class that has been in a storied past of growth and appreciation. It's also a great asset to invest in. It's kind of a double whammy in that regard.The Inflation Reduction Act was huge. Whether you're a business owner, whether you own real estate, whether you're buying an electric car, whatever it might be, talk to someone about it. A client is putting a solar installation on their commercial building, and they're getting about a 90% credit. You're putting a $10 million dollar solar array, and getting a $9 million credit, which you can also sell, and you might be able to sell it for 90 cents on the dollar.Tim Gertzwww.provisionwealth.com<a href="mailto:[email protected]" rel="noopener noreferrer"...

How can you reduce your taxes if you are a W-2 employee that is single, or a W-2 employee with a spouse that doesn't work? This is a topic we have been wanting to cover for a while and Tim Gertz, partner at Provision Wealth will share his insights.Read this entire interview here: https://tinyurl.com/2ckdcd6bTax can be confusing and we all want to reduce our taxes. Let’s break it down into different scenarios, starting with W-2 employees that are high earners and are not married.Some would ask: what's the best tax planning advice for someone that single and a high W-2 earner, the joke is to get married! The tax laws incentivize you to: grow industry to create products, create revenue, create workforce, that can be taxed. Unfortunately, as a W-2 employee, you are in this little box where your opportunities are very minimal.There are still some opportunities such as: oil and gas investing. It can be very advantageous because it is outside of the material participation rules of the passive activity loss rules. You can invest in an oil and gas fund and have no involvement in it and be able to offset W-2 income. It's one of the few carve outs in code section 469 that gives us that opportunity.Another thing with the Inflation Reduction Act, it bumped up tax credits for energy efficiency. It reinstated the 30% tax credit on solar on residential properties. It increased the tax credits for vehicles, used vehicles, various energy efficient systems, whether it's HVAC, or things of that nature. Those are definitely things that you can look at to offset tax on W-2 taxable income.One of the other opportunities if you are an individual that does itemize deductions, an opportunity is called deduction stacking. Especially with charitable contributions. For example, instead of giving $10,000 every year, you&nbsp; give $20,000 this year, then nothing the next year, then $20,000 the following year, and you flip flop between itemized and standard deductions.What about W-2 employees with a spouse that does not work. What are their options?This scenario opens up a huge opportunity. If the spouse wants to be involved in activities, they can look at:&nbsp; What is it that they want to do? Do they want to open a business? Do they want to operate a business? Do they want to invest in real estate and become a real estate professional? One of the nice things about being married is that your income is combined, and your income and losses are combined. If you've an individual that's a W-2 high wage earner, and you have a spouse that is a real estate professional, and you invest in real estate that throws off half a million dollars of losses every year. Because they spouse is active in real estate, that loss is active. Now we have an active loss, and we have active income from W-2 that are married to each other, then they will offset each other. It doesn't have to be a real estate professional because that's where a lot of people are investing in. It can be any activity, it can be any business that someone materially participates in. It could be: coin laundry, things of that nature, things that are highly capital intensive, that have a lot of equipment on the upfront that can be depreciated. That can create a loss that will create an active loss. If they're active in it and materially participate in that activity, it will offset the W-2 income.A real estate professional has to:1. Work 750 hours in real estate activities.2. Do that more than any other income producing activity.Tim Gertz<a href="https://www.provisionwealth.com/" rel="noopener noreferrer"...

Why is diversification important in your investments? How to find and vet great operators and partners? Patrick Grimes, CEO of&nbsp;Invest on Mainstreet, shares his advice after being in the business for over a decade.Read this entire interview here: https://tinyurl.com/2m8jh277Why is diversification important? What are the asset classes that you picked to diversify and why have you picked them?Multifamily is the core of our company, we have over a $500 million dollar portfolio now, and we have workforce housing currently in construction. If you look back over the data that suggests recession resilience and long term appreciating assets, you'll see that three bedroom two bathrooms are very strong. Then 80+ units is the next strongest asset class. All existing construction where you can buy for cash flow, income generating, and you're not hoping to build and hoping somebody will pay your premium price, that's the foundation of most of our investors' portfolios. But I have lost everything in real estate once. If you read my passive investor guide on my website, you'll see that it talks about diversifying, it talks about how the middle class has 7-8% of their portfolio in alternative assets. The high income earners are at 25%. Then the ultra wealthy is at 50%. If you want to invest like the high income earners, the ultra wealthy, you've to get out of those 401k's in the stock market, or IRAs in the stock market, or peel some of that off into a self directed variant which allows you to invest. Maybe your financial planner has you in the more stock markets or you're day trading.What is your process for deciding who you partner up with for these different asset classes?Having been somebody that lost at all, having lost at all doesn't mean you're not a good partner. In fact, I just spoke on a stage in Chicago in front of hundreds of people in economics. The question was How to do deals today, and would you do deals in today's economic environment? - everyone said yes for sure. But we were all talking towards how we saw the demand shift in 2009 and 2010. And how we saw the economic models breakdown and the financial systems. We were speaking from a lens of experience of being raked over the coals, and seeing how things fall apart. You're looking at people that made it out, and people that continue, but with better education and knowledge. I think that is part of what I look for in partners, is somebody that has been a little bit like me, and had some really rough times, but came out fighting, and now speaks from a level of understanding and made it through the failure, they didn't just go crawling back to whatever their job was, but fought their way out and now are moving forward.There are a lot of things to look at. But the general items are: are their investments recession resilient? Are they structured in a way like our real estate deal is, does it have six months of reserves so that if a financial disaster or natural disaster storm hits the property, you can ride it out? Are they fixed interest rates? Or are you at risk of losing all your cash flow, or maybe the building, which I know of several dozen now that are in threat of that this year.Patrick Grimeswww.investonmainstreet.comJoin me in Orlando on March 8th! www.bit.ly/3Yf9KYw--- Support this podcast: <a...

How to raise $43M in a year? What kinds of non-recourse loans are available? Patrick Grimes, CEO of Invest on Mainstreet, shares his best practices on how he was able to raise millions last year, and how he overcame the hurdles along the way.Read this entire interview here:&nbsp;https://tinyurl.com/39wmxf8yWhat does the journey to raising $43 million really look like?I started back in 2006, I got some advice to get into real estate and I invested where I thought we're going to double and triple my money every couple of years but 2009, 2010 happened and I lost it all. It've personally guaranteed on pre development residential and raked me over the coals really bad, but a lot of people got hit pretty hard too. I think that one of the reasons why I'm successful today is because I failed early, failed young, fast and hard. It took me a few years to recover my credit, I worked my way up in the corporate world and did some really cool things. I did medical devices, solar cells, EV vehicles, and automation, robotics, one of a kind things. I got a master's in engineering and business, but I knew I needed to get back into real estate. I did it in much lower risk ways: in single family, both in recession resilient markets and assets that made measurable improvement to cash flow. Not inventing something from nothing, or a new development that's betting and hoping on pre-development returns. Reasonable return for a more moderate and recession resilient risk profile portfolio. That led me to a very successful path of grinding away in my career and moonlighting away in my real estate business. Ultimately, it was when my wife finally came around, and I realized that I was not dateable, and I needed to make some changes and focus on family. I make choices so that my future could grow so I stopped doing single family then traded into larger multi-family and apartment buildings, I partnered up, I started that to do large syndications around growth markets and diversify into other recession resilient, and non correlated assets like energy, where you can build safer portfolios.What are some of the best practices that other syndicators may actually benefit from?I came from high tech, when I started working I just kept my head down, underwriting, punching out numbers, and doing a lot of heavy lifting. In early 2020, I was advised, you're doing this the hard way, you've got a network of investors, colleagues that you've built a 15 year relationship with from high tech, but there's a lot of other investors out there and until you get your name out there and you tell your story, and you get out of your hermit hole and out from underneath your rock, nobody is going to know your story, you're not going to be as relatable, people aren't going to be drawn to what you're doing. I wrote a book, it's an Amazon best seller. I write for Forbes, I've written several articles on investing in commercial real estate. A lot of educational things about the trials and tribulations that I had. I started speaking on stages, I am speaking on MFIN on alternative investments, I've done economics and wealth building strategies. And people can relate to that.Patrick GrimesInvest on MainstreetJoin me at the Women's Real Estate Investment Summit on March 8th! www.azoracademy.com/women-s-real-estate-investment-summit-2023--- Support

What is the state of industrial investing today? Are the rising interest rates affecting some properties? What can you do to fix this problem? Chad Griffiths, Partner at NAI Commercial Real Estate, has been working in the space for over a decade and shares his insights.Read this entire interview here: https://tinyurl.com/yc82y696What is happening in the industrial world today?My overarching investment philosophy, and I try to share this with as many people as possible, because I think it's just the healthiest way to look at real estate, is investing very long term, I would almost like to think that I have an infinite money timeline. There are some properties that I don't ever want to sell, they might go to future generations. Anytime I buy a property, I must be as comfortable owning this property in 10 years, as I am today. That type of mentality smooths out these aberrations that we're going through. I think that this is going to be a painful aberration but I also think this is going to be temporary. I don't see interest rates being able to sustain this high going much past 2023. All the governments that are sitting on so much debt, all the corporations, all the households, by design, they're trying to curb inflation by pulling the interest rate lever, but it's making everything very expensive. And I do think that they'll pull that lever too hard and before we know it, we're going to have recessionary pressure and that comes with political implications. It's very hard to get reelected for a politician if they're in a deep recession. We'll start seeing all sorts of promises coming out this year, whether it's the other side saying, We're going to lower interest rates to stimulate the economy. And then the incumbents are going to say, We're going to do the same thing. I think we live largely in a political cycle more than an economic cycle because there are too many people pulling levers to try and get themselves elected. I don't think this is going to be long term in the grand scheme of most of our properties.What would you do if you had a mortgage coming up?I would probably raise money to pay that mortgage for the next couple of years, borrow from whoever you may need to borrow. Even credit cards potentially, there are several credit cards that you do not pay any interest for a year, I would potentially do that. If I believe that the rates are going to be going down. Another idea is start selling, or looking at partnerships. We have to do what we have to do. It’s also part of all the preparation that we all have been talking about over the last five years, that people have been thinking, The recession is around the corner. The people that have not prepared and bought at 4% cap rates with 20% down, that’s not on us because the wise investors have been warning people about this. It takes a 10% vacancy to destroy a deal in a recession. If people do not underwrite for that…they should have done their homework. A lot of people benefited over the last five years, and the ones that kept being super aggressive, you might need to take some money out of the benefit that you got over the last five years and put into these deals that might be suffering for the next couple of years, in my opinion.Chad Griffithswww.youtube.com/@industrializeJoin our newsletter here: www.montecarlorei.com--- Support this podcast: <a...

How to manage an industrial portfolio? How to compensate managers? What are the key things to keep in mind? Chad Griffiths, industrial investor and Partner at NAI Commercial Real Estate, shares his insights.Read this entire episode here: https://tinyurl.com/mr2ch5x2How do you manage an industrial portfolio?I have a property that we bought two years ago, it's a $3 million building and there’s a single tenant in there, a fortune 1000 tenant that occupies the building of a manufacturing facility. A $3M multi-family building by comparison, has maybe 20 units and it’s much more management intensive. The industrial you have one tenant, the multi-family you have 20. The way our lease is structured is NNN: the tenant is responsible for paying all the operating costs on the property. Instead of them calling us for every little thing that goes wrong, they just fix it. In two years, I’ve been to that property a couple of times, my partner and I self-manage that one. We also have other properties with more tenants, and we have property managers in those ones. Even though it’s a lot easier to manage from a time, energy, focus standpoint, there are times when I think you do want to have a professional property manager.When should you get an onsite manager, and how often do they need to go there?The deciding factor for us is largely down to how complex the situation gets. Even though you’re not dealing with the same amount of tenants, things come up. The scale of having 10 tenants vs one tenant, where you have one point of contact, it’s very easy for us to follow up with a general manager, they take care of most of the things that go wrong. If there was something like an electrical issue, then we get involved and have a contractor come to address it. But it’s just much less time intensive to look after one tenant. The one where we have 10 tenants, there’s smaller tenants, they need a little bit more hand holding, because they might not know how everything works. There’s also a common area, so anytime you’re dealing with tenants having to interact, then you potentially have issues.The tenants pay base or net rent to the landlord, they also pay for the operating level expenses of the property. That’s usually property taxes, building insurance, common area maintenance, landscaping costs, etc, and that’s a budget. When a landlord gives a tenant their numbers in advance at the beginning of the year, the base rent is contractually agreed upon, that could be $10 a square foot for the whole term of the lease, there could be escalations, but that’s already known. Whereas the operating costs, all the landlord can do at the beginning of the year is an estimate. At the end of the year, they have to reconcile all those bills, this is how much we actually paid on all these things, add up how much they paid out of how much they collected, and they either need to give an invoice for any amount that is still owing, or they give a credit or refund back to the tenants. Because that operating cost is collected in advance, when the time comes to reconcile and you either have to send an invoice or send a credit, no tenant will ever complain about getting a check in the mail. But a tenant will not be happy if they get a $10,000 invoice at the end of the year because it was poorly projected at the beginning.Chad Griffithswww.youtube.com/@industrializeJoin our newsletter here: www.montecarlorei.com--- Support this...

How to find a retail deal, negotiate, buy, develop all while dealing with all the curveballs that are thrown at you? Beth Azor, CEO of Azor Advisory Services, has been investing in retail for the last 36 years and shares one particular deal from beginning to end.Read this entire interview here: https://tinyurl.com/3755w9hdLet's talk about a deal of yours, how did you find it and what happened throughout the deal if you still own it?I'm going to talk about B&amp;B Plaza. I was at a City Commission meeting and they outlawed strip clubs, immediately my brain went to a strip club on Main and Main. It was going to happen 24 months from then. The next morning, I look up the tax rules on the address of the strip club and I found out this 80-year-old couple, I called them and said, I'm calling you about your building where Eden's nightclub is located, last night at the town of Davies commission meeting, they outlawed strip clubs, so 24 months from now, there will not be a strip club there, would you like to sell me your building? They said, no, we don't believe you, we get $10,000 per month in cash from the strip club. I sent them the minutes of the meeting, we started having a dialogue and they were not jumping up and down to sell me the building.The two-year mark comes, the strip club closes, and exactly my prediction happens, four competitors of mine swoop in, they were very aggressive with these people because they didn't understand them, and didn't know them. I got a call from their son. They had been very ill, and that they're definitely going to sell and I'm coming to town to meet five of you. I said okay, can I be the last person? He said yes, my parents really liked you so you have the jump ball. The next day he calls and says if you pay 3.4 million, it's yours. I said done. He says, how fast can you close? I said 24 hours. The reason why I could afford to pay more is because I had great relationships in the market. I had called a friend of mine who had a property across the street and she had just done a renewal for 5,000 square feet with a national company at $50 a square foot. My two shopping centers down the street: one was at $30 and one was $40. The fact that she had $50 rent and it was behind our parcels, was very good market intel.&nbsp;I went through three project managers to build it. After we built it, everything was opened, Starbucks, Blaze Pizza, Select Comfort. A day before Verizon moved in, they told us that there is no RTU's in the building (air conditioner units). My air conditioning guy puts the air conditioning units on the roof, he doesn't pull a permit and he gets caught. I get a call from the city, with whom I have a phenomenal relationship saying you have an illegal vendor on your roof and he doesn't have insurance. I had to pay $27,000 in late fees to Verizon and I had penalties from the city because I tried to do it without a permit for speed purposes. It was a very expensive lesson.My NOI today is $660k, on average $66 a square foot, it's probably worth 12 to 14 million, we paid 3.4 million, the construction was probably another 4 million.Join the Women's Real Estate Investing Summit here: bit.ly/3JaGeiEBeth AzorTwitterInstagram--- Support this podcast: <a...

What is happening in the flipping world today? How do you prepare as a flipper when the rates are high? How to buy deals with future expectations being low? Elisa Covington, founder and CEO of Transform Real Estate Investments&nbsp;shares her insights.Read this entire interview here: bit.ly/3iq0BgUWhat is happening in the flipping world today?It's interesting that people perceive what's happening in the housing market and the interest rate, that the market is tanking and nobody is buying homes anymore which I find not accurate based on my own experience. I've sold about nine homes this year, three homes at the beginning of the year when the market was really good and then the other six homes after the interest rate started increasing and the market declined.My experience hasn't been that terrible. The houses I flipped actually were able to sell on the market within a week or two. And, in most cases, the sale prices were at my expectation or even above my expectation. I have one home that's been sitting on the market for maybe two months now. Most of my experience has been positive which is contrary to popular belief. There are still a lot of buyers out there and I think the Bay Area market may be a little unique, too, because there's just not a lot of inventory, and even though the interest rates are high, buyers are taking a step back because of the limited inventory, but the supply and demand haven’t really shifted that much. Most agents that I work with, the top real estate agents in the Bay Area market, are still categorizing it as a sellers market.How are you able to buy deals with future expectations being low when it has been very competitive up until now?In this market, selling is harder because buyers are taking a step back because of the higher interest rate and the fear of a recession. Because buyers are taking a step back, it's actually really easy to get a good deal because there's not as much competition as before, especially with my target acquisitions, which are homes that are fixer-uppers that are in very poor condition. In a normal market, some buyers may say, we can afford a remodeled home so we're going to buy a home that's in a poor condition for a little less. And the difference in prices between a remodeled home and a fixer-upper is not as significant in a hot market because there's not much inventory and there's a lot of competition. But when the market is as slow as it is now, buyers are focused on remodeled homes, nicer homes, the fixer-uppers get overlooked, they tend to sit on the market and sell for a much lower price than the homes that have been remodeled. The difference in prices between those two types of homes actually has become more significant.In this market, it is easier to find good deals. That's the beauty of house flipping, we're on both sides of the market. We need to purchase a home to flip it, and then after the flip is done, we have to sell the home so we are both the buyer and the seller. When the market changes, if the market is hot, it's going to make it super easy to sell, you're going to sell for more than you are expecting and you will do fine but when the market is declining.Elisa Covingtoninstagram.com/transformrealestatewww.youtube.com/@TransformRealEstateSubscribe to our newsletter here: <a...

Today we'll go over some tips for setting your real estate goals for the year, how to look at them on a daily, weekly, monthly and on a yearly basis, how to organize your day, and when is the optimal time to hire a full time VA. Bronson Hill, principal at Bronson Equity has been in the real estate investment world for the last four years, he has raised over $30M and shares his insights.You can read this entire episode here: bit.ly/3VTpvTLLast year you raised an incredible amount of money, what do you think was the biggest step you took in the last four years to get yourself to where you are right now?I think the biggest thing that happened was I made the decision that I was going to leave my job within a few years, I was going to figure out a way to do it. By doing that, your subconscious tries to figure it out, you go to events, meet the people, make connections. And in the process, I started a meet up in Southern California, and found my first investor there. I'd had so many calls with friends and family to raise money for real estate deals, and zero invested, it was so frustrating stuff, but this guy who I'd never met before, who simply saw me at the front of the room, he didn't see me as an expert, but as a leader in the space. The amazing thing is when you're trying to get started, it's so important that you try to find a way to add value. You're doing it by this podcast, other people are doing it by going to events and trying to find a way to help people on their journey. We create a lot of content now, emails, videos, we have our YouTube channel and all types of stuff to create value for people.You have a specific amount of days that you're completely disconnecting for the year. Can you tell me a little bit about that? And how do you do it?That's new for me. I'm always working and doing things, even on a day off. I'm a part of a coaching group now and they're saying that it's really good to have a certain number of free days, and that is defined as you don't answer an email, you don't pick up the phone. When somebody calls for business, you're out of the office. And it's so hard to do. But if you're an entrepreneur, you can hopefully have team members that can help, you train your people, you work with your partners, your investors, etc. I don't pick up the phone on the weekends unless it's an emergency. My goal this year is 115 free days where I don't do any work on those days.A lot of times when people decide to take a week, or a month off, and they just really let the team take care of the business, more often than not, the company actually does way better than when they were there watching over everybody.Is there anything else that is important to share regarding goal setting?You have to have written goals, when you write it down, you're actually creating something. And something doesn't exist unless you create it, you either speak it, you write it down. And put that up somewhere, I have my goals typed up with my mission statement, I laminated on the backside and there are pictures of what those goals look like. And I read those every morning. Keeping that in front of you is really important. I encourage anybody who's listening who wants to change their life, start creating the goals and keeping them in front of you all the time.Yeah,Bronson Hillwww.bronsonequity.comVA finder: www.virtualstafffinder.comzero tax summit, get notified by joining our...

What’s going on with hotels in this economy? Which markets are they thriving now? What are the benefits of investing and operating hotels? What are some types of hotels that may be great investments today? Julie Surago, Vice President at Olive Tree Holdings shares her insights.You can read this entire interview here: bit.ly/3G2PLVOWhat is going on with hotels today?Through COVID, you would expect that hotels got hit the most because of the stoppage and most travel both business leisure and international group, and yet hotels were able to weather the storm based because of the PPP loans that were given out by the government. And each hotel employs a fairly large number of people anywhere from Best Western which has 20 employees up to 1000, and Marriott which might have 200 employees and they took advantage of that. So, there wasn’t a lot of distress in the market that we really expected to see. In fact, my firm was going to try to find some opportunities in the hospitality and real estate investment market, but it never really transpired.What are some of the benefits of investing and operating hotels? It's very hands-on and you have people moving in and out on a daily basis, but are the returns better?The biggest challenge with hotels today is staffing. Every industry is having trouble with staffing, especially the hospitality industry, hotels, and restaurants because there are a lot of turnovers and there are not as many international H-1B1 visas. However, the biggest benefit of a hotel versus any other type of real estate class is in times of inflation, when the value of the dollar is going up, hotels can react quickly. They set their rates every single day so you'll notice when you look at, not just hotels, but airlines, the prices are going up pretty significantly along with everything else. Whereas, if you have a multifamily lease or an office lease, retail, or industrial, some of those either get reset once a year or get reset every five years which is a lot harder to react to inflation.If you were to purchase a hotel today, what are some of the major things you would be looking for?I look for upside. If you're looking at a hotel, maybe it has a brand that is strong, but there should be an opportunity to "upmarket" something. What has been attractive for hotel investors is the ability to assume a loan at a fixed interest rate. There are a lot of hotels, particularly midscale hotels with limited service, that are on long-term CMBS loans and maybe they have a fixed interest rate of 4.5% which is extremely attractive right now. Another thing that has been attractive for people and also for some sellers is the big firms that have the ability to do so are offering seller financing at terms lower than what you can find in the market. I'm seeing hotels that were not attractive buys five years ago, but sellers are able to sell them now because they can offer that financing at cheaper returns, which really improves the upside, at least in comparison to what you can find.What kind of hotel size would you look for?I'm really into limited-service hotels. The resorts and full service are very attractive and fun to own but limited service usually is easier to operate. Fewer employees and a lot cheaper to buy. Another thing that is always been attractive to me is to buy nicer economy hotels. I think those weather the storm really well as far as any kind of economic disruption, whether that be building like Qantas or Wyndham micro hotels,Julie [email protected] Support...

Do you feel like you're way behind other investors regarding your real estate goals? Do you look at others and sometimes feel like you haven't made much progress compared to them? Today I'm going to remind you to just focus on your journey because you don't know what others are really going through!You can read this entire episode here: bit.ly/3v40AShWatch the detailed explanation about Matt Onofrio's $35M alleged fraud here: bit.ly/3hBSk99With the year coming to an end, and a brand new one starting, I thought it would be useful to talk about being happy with our journey, not comparing ourselves with others. There's something happening right now in the real estate industry with a particular person that a lot of operators were looking up to him, he was growing incredibly quickly, in a very short time, he was hanging out with the who's who of real estate, and he was even writing a book for Bigger Pockets. He had just started investing in real estate for the very first time, three to four years ago. It turns that, as of now, everything may have been a fraud.&nbsp;When I did my own startup over a decade ago, it was not only one of the most difficult things that I have done, but I also learned that it's so important for us to focus on our own things and never worry about "the competition" and the fact that all of our competitors are doing so much better than us. One of them copied everything that we were doing and raised millions of dollars. The other also raised a lot more millions of dollars. The one that copied us at the end of the day ended up going out of business. And the other one that had raised even more millions of dollars, the CEO ended up terminating his life because he had purchased a ton of inventory that he was not going to be able to sell. These people were on the news, they were on the tech startup blog posts being written about nonstop. The CEO that unalived himself was hanging out with top people in the tech industry, including the Zappos founder, and a few other people. So it was very easy to be thinking that I was so far behind them. Look at all these amazing connections that this person has, what now?&nbsp;If you are worried about the competition, you are wasting precious time. And my point is not about the competition with regards to real estate, but it's more on the comparison aspect of it, how we can easily think that this other person is so much further ahead than me, what am I doing wrong? There was this nurse guy that at least two people asked me to interview him this year. In the last four years, which is exactly the same amount of time that I have been doing real estate full time, he managed to be a "real estate mogul" worth $160 million.At the end of 2019 up until now that this person started from zero investments to being worth $160 million, to being now investigated for fraud. Before this fraud investigation came along, the thought did cross my mind, what am I doing wrong? I am far behind his numbers in the same four years. I did reach out to him twice asking him to come over the podcast and he never responded. I was really more curious on how did you go from zero to this much in just four years. This is fantastic. Fast forward to now, just two weeks ago, I get my daily real estate digest and it says that Matt Onofrio, this person that was previously a nurse and became a very successful real estate investor is now being investigated by the SEC for fraud. And I thought... nurse... that sounds so familiar. And it turned out that he was the person that everybody has been telling me about that had an amazing story. It turned out that it was not so amazing, after all. He is now facing federal bank fraud...

What is the state of commercial real estate? Who will be selling next year in 2023? Which asset class do we think will hurt the most next year? Deidre Wollard, a writer and editor at The Motley Fool will share her insights.You can read this entire episode here: bit.ly/3uxdx70What is the state of commercial real estate today?It is an interesting time. It has always an interesting time in real estate. Right now, I feel like everybody is waiting for something to happen, which is really interesting. We're certainly seeing that on the residential side, because the housing market is sort of on pause. And we are seeing that on the commercial side as well, interest rates are so high that people can't get access to capital the way they could. And there's that little uncertainty about what's next in the overall economic sector. Are we headed into a recession? Consumers are spending a lot right now, is that going to shift? All of that uncertainty is leading to a bit of a lack of deal flow from what I've seen.Which asset class do you think will be the one that is most hurt next year?I think it continues to be office, office has really struggled. We are also starting to see a little bit of a weakness in industrial. That has been happening ever since Amazon about three or four months ago made a statement about looking at their warehouse spacing, we have seen that sort of fall throughout the industry. So there's a little bit of a weakness starting to happen in industrial. Overall, it's nothing to worry about. But with office, the question I keep asking myself is, is this a permanent shift? And I think my viewpoint on that has changed throughout the cycle as different things just keep happening. Because the employers are starting to have more of the power, you're getting more and more employers demanding people to go back to the office. That is one reason that I'm getting a little bit optimistic about office.When you invest in your next deal, what asset class is more interesting to you right now and why?Multifamily is forever interesting, because we're never going to run out of need for it. And it's not as much driven by what happens with the economy. Rent prices right now are definitely stabilizing, the question though is where are we overbuilding and that's the thing that's really important to watch because we saw so much activity flow into the Sunbelt, both before the pandemic and during, and that's moderating a bit. You see some of these hot markets get a little different and you start to wonder, are we building too much in Austin, Texas, for example, and start to think about, where's the money going next? Where are the people going next? That I think that is the puzzle that is most interesting.I think hotels is an interesting one to follow. Because when we look at consumer behavior, everybody spent on goods during a portion of the pandemic, then everybody switched over to experiences, and that changed the forecast of hospitality. The longer term trend that I'm watching there that I think is really interesting, is what we saw with Airbnb and long term stays, they saw their 28 day and higher stays keep growing.They announced recently that they're now letting apartment renters rent on Airbnb, which is interesting. At the same time, you've got Marriott, that just announced Apartments by Bonvoy, which is basically, medium term rentals of more apartment style units. There's something happening there with medium term 30 to 90 days, stays, I think that's an area to keep an eye on.Deidre Wollard at The Motley Fool<a href="https://twitter.com/deidre" rel="noopener noreferrer"...

How to find what a property is zoned for in the city's website? What are some tips on working with the city to get your project approved? How to go about rezoning a parcel? Scott Krone, principal at Coda Design + Build and Coda Management Group is a developer with over 30 years of experience and shares his knowledge.Watch this interview here: bit.ly/3XJZg45Read this interview here: bit.ly/3ucrMhiLet's go over an entitlement example please.When someone brings us a property, the first thing that we do, and we're determining if we're going to move forward with it, is we look at what are the entitlements. Entitlements are a fancy word of saying, what is the zoning, what are you entitled to do on a property. A lot of people think that they have to go to someone in the city and get this information, when, in reality, it's already out there in public forum. As developers, we will always go and look to what it is, and then, we will trust, but verify. We will then go back to the city planners and say, this is what we saw, we want to make sure that we're in agreement. It's our way of trusting and verifying with the city official.I selected a location that we recently worked on in the City of Dayton, and I picked this one because there's a lot of different things here. There are tabs called residents, businesses, government. Typically, we go to government, because that's where the different departments are broken down. Here you see planning, neighborhood and development, public works, community communications, community development, boards, commissions and committees, these are all different ones. Public Works has sewers and water lines, planning, neighborhood and development, this is probably where the information is going to be under, because this is how they plan for things.We click on that one, and it comes up with the zoning coded map, it has an interactive zoning map, this one is really nice. Others might be on a PDF. We will click on that, and then, we put in the address, the property comes up, and we can click on show more results.To clarify a couple of things: 1) Every city website is going to be completely different, unfortunately, from one another 2) What we're looking at right now is either a property that you are looking at purchasing or expanding to make sure that it's zoned properly or could be rezoned, correct?We try not to rezone, but if we do, that’s a whole different process. Right now, we're trying to determine what it is that we are allowed to do. When we look at this one, 535 East Third Street, it's bouncing back and forth between these two, I’m not sure why. I’m going to zoom in to see the streets, because then that way I’ll know where we are. We are now under the UBD District, but UBD means nothing to me, I have no idea what that is, they've come up with this general term. It might be unified business district, it might be, etc. But that is what we're going to be looking for when we do it. If you look under this category, there's a PD 108, this is a planned development, and that was 108th planned development HD 2. These are all different districts that are zoned, if we zoom back out, you can see the different zoning sections, they all have different colors to make it interesting. I2 is typically industrial, a second version of industrial. There's a CBD, which might be the commercial business district as opposed to unified business district. So those are all the things that we look for in terms of the breakdown.<a...

What is happening in the retail space given the high interest rates? Are national tenants still leasing at the same speed as last year? What are some things to keep in mind when negotiating leases in today's environment? James Chung, founder of the econic company shares his insights.You can read this entire interview here: bit.ly/3Xg8pkEWhat is the state of retail and leasing with national tenants in California, in the Bay Area in particular?From a velocity point, the market has actually stayed pretty high. And I think that would be very shocking for people to hear especially coming out of COVID. However, what was interesting is that we found that, like what happened during the financial crisis in 2008, the Bay Area, because of its fundamentals, is usually the last to fail and the first to recover. And because the barrier to entry has always been so high a lot of national tenants and local tenants, when they see opportunities that were never available historically become available, there becomes a classic supply and demand situation where the opportunities unfortunately are less than the demand. We've actually seen in the better shopping centers, there has been almost an increase in demand for those opportunities, especially for second gen food space. So there has been a lift, believe it or not in occupancy costs for those premier opportunities.What do you think the plan will be for big spaces that are becoming available?What we've seen along those lines are a lot of alternative uses that are being proposed and introduced. Things like large pharma medical enter into retail environments where traditionally they would have never done so, we've seen industries like auto want to get in. With the onset of all the EV cars coming into the market, there are many new brands that are looking for showrooms and even sale centers, or service centers. What's great about that new segment is that they do not expose the projects to hazardous materials, because they're not changing oil. They're not fixing engines, they're fixing batteries at the end of the day. My guess is that there will be a return of that demand in the larger format sector sooner rather than later. People are rethinking their execution plans and sizes, and that trend started pre COVID, as we saw a lot of what we called right sizing, those that realized they didn't need as much space as they thought. But as that continues to evolve, I think at some point in the near term we will see a return of a lot of those tenants back into that larger format space.What do you think owners should be doing to prepare for the next couple of years?It's important to think long term, not short term. The knee jerk reaction is to transact differently, and while inflation is 100% real, and CPI is at an all time rate, a lot of landlords were reacting by trying to be hyper aggressive with annual increases, redefining how transactions are put together. And while there is merit to that, and it does need to evolve, I think it's also about securing a tenant today for the next 10, 20 years, and working in partnership with them in finding a solution for a healthy ratio and occupancy costs for that tenant. And while that description is not a one size fits all, the complexion of a transaction for a small restaurant tenant versus a 50,000 foot box tenant are completely different.&nbsp;James Chungthe...

What is happening with commercial property prices in this market given the latest interest rate hikes? What are some of the lessons learned over the last few weeks?You can read this entire interview here: bit.ly/3V9hfigHas our time to buy commercial properties finally arrived? I think so. The prices for commercial real estate are going down, I am getting at least one email per that that says “price reduction”. And I haven’t seen these price reduction emails since I started investing up until the last couple of months. Today I even got a call from a broker that just 2 weeks ago said that the pricing guidance for a particular property was $10.5M, now it’s $8.5M, and they told our assistant that the guidance was north of $7M! So not only did we hear two different prices, but we also just got a 30% discount in 2 weeks. It is finally here, it is my prediction that prices will continue to drop well into 2023.It’s worth reminding you of my calculations that I shared a few weeks ago, where, when the cap rate increases just 1% on a $6M deal that was selling in 2021 at a 5% cap, and today it’s at a 6% cap, you just got a $1M discount. At a 2% cap increase, you got a 1.7M discount. I predict a minimum of a 2% cap rate increase on average, depending on the asset class. And let’s not forget that your mortgage payment is about $30k more per year, but when rates go down again 5 years from now (at the latest in my opinion), you’ll be able to refinance, and sell it at a 5% cap again. You paid $150k in higher payment, for a $1.7M discount, which by the way the interest part of it is tax deductible. Not to mention that your downpayment is less as well, you keep an extra $600k that you don’t need to put as a down payment. And then invest that at anything that gives you even a 10% return yearly, you get $60k per year, pay your higher mortgage at $30k more, and you still get to keep $30k! Brilliant!Lessons Learned1. Over the last several weeks I learned a few lessons that I thought would be beneficial for you to know. I’ve a friend that I believe is a billionaire real estate investor. Besides the fact that he is an awesome human being, he was sharing with me the other day about one of his huge deals, I don’t recall what the issue was, but he had to work with a legal team, and he told me that he met with the entire legal team every Saturday morning to get an update. He said that we always need to be on top of everything and demand regular updates from everyone, otherwise they will let it slide. Imagine, he is already working with a top law firm that money can afford, and he is telling me that he is the one scheduling weekly in person meetings with the legal team to get updates and demand progress on the project. This same person, on another note, got to where he is today by working very hard for decades.2. I recently asked George Ross, Trump’s attorney from the apprentice, what should I do to get bigger deals, not only from a mindset perspective but also a team’s perspective, etc. He said it’s as easy as adding a zero. With regards to team, he said I could join an experienced team, or build one myself.3. When doing anything related to your real estate investments, make sure to involve your lawyer, even for standard sales agreements. Our attorney caught a few things in a recent standard sale agreement we were about to get in contract for.Join George Ross’s Mastermind here: www.victorjm.com/mastermind-seriesSubscribe to our newsletter here: www.montecarlorei.com--- Support this...

What is cost segregation? Are there asset classes that have better depreciation than others? Cindy Blumenfeld, Director of Client Development at Engineered Tax Services shares her knowledge.You can read this entire episode here: bit.ly/3VzZIksWhat is cost segregation, and when should people get that study done?It's a study for depreciation of an investment property, not the primary residence that you live in, but any investment property, it could be commercial, it could be a house, or an office condo that you're doing significant leasehold improvements to. The IRS for some reason has commercial property being depreciated over 39 years, and residential, such as apartment buildings 27.5 years. That means that, let's say you spent $5 million to buy or build a building, not including land, land isn't depreciable, and your CPA takes that $5 million and divides it by 39 years, that's how much can write off every year, and that doesn't make a whole lot of sense, or give the owners a whole lot of benefit because none of the components in the building lasts 30 or 40 years. An alternate method, not only approved by the IRS, but preferred by the IRS is via an engineered cost segregation study. It's basically an engineering appraisal of the building for tax purposes.Is there a particular asset class that is more favorable for someone who needs that depreciation that year?When you turn that building upside down, and the more things that fall out of it the better, those are all the things that we're going to reclassify. Maybe there are more benefits in multifamily, or a retail store, or a manufacturing facility that has more different components inside it. I know self storage is a hot market right now, and depending on what the structures are made out of, if they're metal, or aluminum, as opposed to concrete, they can be depreciated over a 15 year life. We do a lot of restaurants, McDonald's, for example, and the franchisees don't own the shell of the building, which is a 39 year asset anyway, we can't accelerate it, but all the components inside the building we can. I had one McDonald's client that we did a portfolio of eight locations, he had acquired them about five or six years prior to us doing this study, and we were able to recapture all that missed depreciation, giving him back over a million dollars in cash.Are there any other tips for investors to take advantage of depreciation that is important for them to know?We didn't talk about energy yet, we also certify for 179D and the 45L energy certifications. This is for bigger commercial real estate, 45L is a tax credit, we've been talking about depreciations, which is tax deduction. If I got somebody a $500,000 tax deduction, they would have to times that by their tax rate, and that's their net cash benefit, whereas a tax credit is a dollar for dollar straight credit. The 45L had expired, they're reinstating it as of January 2023 and that's for large, low rise multifamily development, three stories and under, and that would go to the developer, a couple of $1,000 per door or dwelling for designing with the ultimate energy efficiency. That's where we come in, it has to be certified by an engineer. And the 179D has actually been out since 2006, and never got the front page recognition it was due, it was a temporary incentive, it was out for a few years, it expired for a few years. They reinstated it and made it retroactive, and it expired again for a few years, reinstated, made retroactive, it expired again. It was just going around like that for a while and now they finally made it permanent.Cindy Blumenfeld(954)...

What are some major items you should keep in mind when negotiating and reviewing an industrial lease? What are some potential major pitfalls? Chad Griffiths a commercial real estate broker and industrial investor will share his knowledge with us.You can read this entire episode here: bit.ly/3e0P84YLet's review things people should keep in mind regarding industrial leases.A lease is going to spell out who the tenant is, who the landlord is, who the parties are, the size of the space, when it commences, how long of a lease term it is, what the lease rate is going to be, and that can be a fixed rate for the duration of the lease, or it can be a lease that has predetermined escalations in it. Let's use a quick 10-year lease as an example, it might start at $10 a square foot and go to $15 a square foot by the end of the term. What we're actually seeing is quite common right now is a rent increase tied to some percentage, so it could be tied to CPI, or it can just be a percentage that's put in. I just did a lease late last week. It started at $8.50 a square foot and had two and a half percent yearly escalations for a five-year term. We're starting to see that that is pretty common as well.Once you start getting beyond the obvious terms of what's in the lease, who the parties are, how long it's going to go for, what the rent is, then you're going to start getting into provisions that deal with the operating costs. For those needing a quick refresher on it, the majority of leases are going to be structured, I should preface that there are NNN leases. You'll have one lease, it'll say that this is the base amount that they pay, then the tenants also pay for their proportionate share of all the operating level expenses of the building. That's property taxes, building insurance, commentary, maintenance, management fees, and that's always going to be an estimate. The landlord will give the tenant an estimate on what it's going to be in advance. After the year ends and all the bills come in, they either give the tenant a credit, if they charged too much, or they invoice them if there was not enough paid throughout the course of the year. That language is probably the most important thing as a property owner myself, you want to have it very clear that any increases in those expenses can get passed through to the tenant. If that language is vague, and it becomes contentious, it might not be a big deal if it's a small lease like a 5,000 square foot lease, and those discrepancies, but you can imagine when some of these big distribution centers are approaching a million square feet, if there's a small discrepancy between how the landlord expected it to be and what the tenant interpreted it at, that can be 10s, hundreds of 1,000s, if not millions of dollars.Make sure that you understand all the little details, even insurance could be another one that becomes contentious, it varies market to market, but in my market it was common that tenants had to have $2 million worth of insurance. And now almost every landlord has increased that to $5 million of insurance, and there'll be markets where I'm sure it's even higher where prices are higher. But just making sure that that insurance provision is correct, involving your insurance agent, but at least it should be viewed as a document where a number of people have input into it, and the accountant might want to have input into how some of these costs are handled, your lawyer definitely needs to be involved in it, insurance broker is another one.Chad Griffiths<a href="https://www.youtube.com/c/ChadGriffithsCRE" rel="noopener noreferrer"...

How to find a good general contractor for your commercial projects? What questions should you ask? What’s a typical timeline for a medium to large project? Aaron Saunders, Managing Director of Spartan Investment Group has 16 years of experience in the construction management industry and shares his knowledge.You can read this entire episode here: bit.ly/3BxQD2pWhat are some questions you recommend people asking a potential General Contractor (GC)? And how to find a good one that is specific to their location?Spartan Investment Group had hired a couple of GC’s in the past and one of them did pretty well, one of them did okay, but it just didn’t feel like they were meeting the expectations. And that morphed into questions such as “Well, what if we built this in house? What would it look like? What are some expectations that we would have if we had a general contracting arm?”. If we are treating these projects as our own projects, and having our investors best intentions in place, and I’m not saying other general contractors don’t, but we felt we could be the best stewards of our investors money if we were really managing their projects in house, with an internal team. With that in place, 18 months ago we started to build out tools and processes. The thought process was always coming back to what is the best way to execute a project when someone knocks on our door, because ultimately we want to build all of our projects.What are some things to look for when you’re trying to identify a general contractor?Look at their history, their resume, the projects that they have completed, you may see that the general contractor doesn’t have the specific projects that you are looking for, but you can ask them, do people on your team have a resume from other organizations that you have brought over that have executed something similar to this? Look for that portfolio of projects, ask for recommendations from architects, and that will help you narrow down your search as you identify a GC or multiple GC’s that you want to work with. The next step would be to sit down, interview them, and make sure that your scope of work aligns with what they do and the expectations that they have for the project because ultimately, they may be a good contractor.Let’s say it is zoned for whatever asset class we’re building. What is next? And how do you assemble a team in a city that you may not have done business with in the past?We will reach out to some of our industry partners that we are working with currently to find out if they have worked in that city, and who is a good civil engineer to work with in that city. The nice thing about having a local civil engineer is that they know the city, they understand the process, they understand a lot of the soil types in that city and how we want to build our building.If they haven’t done self storage before, we will coach them a little bit on what our typical building structures look like. For example, that we don’t need a large deep foundation, obviously depending on the geotechnical report, and let them know what the parameters of our building requirements are.First is going to be identifying that civil engineer and starting to build. Then it depends, are you going to be building a multi-story facility? Do we need an architect on board? Is it going to be a single-story facility where we can go to one of our building manufacturers and they can provide us building elevations?Aaron [email protected] in our next self storage syndication? Fill out this interest form: <a href="https://bit.ly/3LyCWos" rel="noopener noreferrer"...

What questions should you ask operators who will be managing an investment? Whether you’re a syndicator or a passive investor, it’s important to know what questions to ask in order to vet them properly. Camilla Jeffs, Principal at Steady Stream Investments shares her knowledge.You can read this entire episode here: bit.ly/3epLwt3As a syndicator, how do you find good operators for your deals?One of the keys is finding someone who is experienced. You want someone that has at least four or five years of experience. And by experience, I don’t mean how long they have been in business, but what kind of experience have they had? Think about the quality of experience, for example, a woman I know started her syndication journey as an operator in the last two years. She has already been through a fire in her apartment, squatters, all sorts of things. She is one of the best operators I have ever seen because she’s there at the property, getting into the details, she’s really working hard to make sure that asset is running well. Whereas other people that might be more “experienced”, they may have moved away from actually managing the asset and hired a team. Sometimes the team doesn’t quite do it as well, so you get into problems. The more removed you get from the asset can make it problematic.How do you go about vetting them for the first time that you’re working with them?I have a specific list of questions that I ask. For example, I ask about their track record and their experience, and almost all of them will tell you the highs, the great things that they have done, which is good, you need to know that they can achieve greatness. If they can’t achieve greatness, you don’t want to invest with them. Then I ask, “tell me about a failure that you had, or a big challenge that you experienced in real estate”. If they say, “Oh, I haven’t really had any big failures”, you have to run the other way because there is a big failure coming. It happens every time in real estate, real estate can be unpredictable, like I said, my friend went through a fire at her apartment units, you don’t know when things like that will happen. What is important is not whether they have faced challenges, but how they approached those challenges. Have they tackled them head on? Or did they just hide their head in the sand? And are they honest about it? Are they honest that they actually lost money and that taught them they need to do X, Y, and Z differently? And now we do XYZ different to really hedge against losing any money in the future. That’s what I want to know. I want to know that you’ve experienced some hard knocks, and that you’ve learned from them, so that now my money is safer with you than it was before.What are some of the biggest complaints you hear the most from passive investors?The number one thing is lack of communication. As a syndicator, if you tell your investors that you will be sending out a monthly report, send out the monthly report. Don’t resist it, don’t be late on it, send out your report. If myself, as a passive investor, don’t get those reports I’m scratching my head wondering if something wrong happened. The brain jumps to conclusions, and now I might think my money is at risk, and I start panicking. You will then get calls and emails asking what is going on, so send out the updates.Camilla Jeffswww.steadystreaminvestments.com--- Support this podcast:...

Almost two years after investing in a few car washes, what are the results? Would I invest in car washes again? What are the pros and cons? Is there any upside in this asset class?You can read this entire episode here: bit.ly/3cnH25OThe last time I spoke about the car washes they were going great. We had 36% cash on cash returns. And last year we had a full year of managing the entire thing. And we ended up not with a 36% cash on cash return, we ended up with a 55% cash on cash return on that deal. I want to note a couple of things:1. I was managing the whole thing myself and not paying myself. There is no management fee there. If someone were to underwrite this deal, they should definitely put a management fee. For example, when I buy a self storage facility, if it’s managed by a mom and pop, and they don’t have a management fee, I have to underwrite it with a management fee. I wanted to let you guys know that fact.2. This also includes the credit card that we installed on all locations. I think we spent 60 or 70k. Yes, it was an absurd, we got screwed by this particular vendor. This includes that as a “downpayment” because it was out of pocket.We had a 55% cash on cash on our entire first year, our first full 12 months. Amazing, right? Well, after that, I decided I do not want to do car washes anymore. Why? Because it took my entire year, I was not able to learn how to manage it, or how to have a system in place for it to be somewhat a passive investment. I am not local, and that added to the issues. And that is not where the issues ended, I realized that we were getting significantly robbed, 1000s of dollars have been missing.Now I need to figure out how to exit them because cannot sell as a carwash anymore, because the income is not matching, and at the same time, I decided to exit these properties as soon as humanly possible. What is the first thing that I thought I could do to exit all of these car washes?I could do a build to suit, I could go out to retailers and figure out who would want any of these locations and we would build whatever their heart desires, and then we would lease it to them and either keep the property, or exit.Another option was to sell it as land. One of the carwashes has an extra piece of land in the back. If we look at the value of the entire thing with the land, it does make up for the mission NOI and it’s basically the price of the carwash, that is currently in the market as land.Another option was that the two remaining are actually not only zoned for retail, they’re also zoned for multifamily. So for the one that has a piece of land in the back, we could tear the carwash down and build a multifamily building.The last property doesn’t have extra piece of land. So that one I might sell to somebody local, completely separate from everything else.In the meantime, what I decided to do is to partner up with somebody local, whom I trust, he is a vendor that has been great up until now with everything. I’ll give him a percentage of the NOI and he will take care of everything. We’re going to have weekly calls to make sure that nothing falls through the cracks. The idea is for us to bring the NOI back to normal, make some improvements, even increase the NOI from last year, and then sell the very last carwash, if that will be the only one remaining.If you like the cash on cash and you want to figure out how to manage a carwash remotely, how to hire and have the best employees and how to make sure that the employees follow all of the steps, car washes are for you. However, if you want something more on the passive side, carwashes is 100% not for you.Join our newsletter here: <a href="https://montecarlorei.com/"

What items should you go over when you're talking to a self storage broker? How to present an offer? Kathryn East has several years experience in the self storage space, she is the Founder of Sopapta Consulting, Management &amp; Auditing, and shares her knowledge.You can read this entire episode here: bit.ly/3dHeNiRHow do you present an offer that is 30% below what they are asking for?You explain how you came up with this number based on what they told you, for instance, you are trying to sell it to me at 85% occupied, but your economic occupancy is 60%. I am not going to pay you for what you didn’t do with that facility. So we’re going to go with your 60% economic occupancy, which means it’s worth $1.7M, not $2.4.If it’s an experienced self storage broker, they will generally come back with “I absolutely understand what you are saying, however, this facility is not using the right kind of website, they’re not really promoting themselves very well. There’s delinquency that you could clear up”. Then your answer is "Okay, you said it right there for me, I have to do it. Why would I pay your client for what they did not do?". Or they will say “I’ve done a market research on this property, as you can see in my OM, based on my pro forma numbers in year one, and you could bring it to this value, which means it’ll actually exceed the purchase price in year one”. I will then say, Great, why didn’t you have your client do that? If you are going to sell this property at a price point that’s less than if you would have instructed that client to do what you state that they can do – why are you selling it? You're selling it short and ultimately affecting your client.Obviously, they can project numbers, it’s like having a crystal ball in your hand. Sometimes that’s what it feels like when they're projecting exit strategies of three to five years from now. Do I know what cap rates or interest rates are going to be in three to five years? Of course not, all I know is this asset class is in a cycle. We were at the top of that cycle six months ago and now we’re going back down, and at some point we're going back up. After I have said to the broker “If you know it can do this, why not instruct your client to do that, and re-list it after six months of implementing your ideas that created this pro forma"? And they answer, Because they want to sell it now. Fair enough, then the now price is $1.7M.Brokers are actually really nice, I have never felt disrespected or been disrespected by them. If they're not a self storage broker, your goal is not to offend them with your underwriting, it’s to educate them. It’s a give and take relationship when you are a buyer versus a seller. That’s what we’re looking at. I wish I could say that there is this long process about underwriting, and learning it does takes time, it might take you three hours to underwrite something to where you feel comfortable with writing an LOI, and that can take me 20 minutes, but I have been doing this for many years. I have perfected the way I am looking at it, but to be clear, I learn new things every single day about the underwriting process.Broker OM's make it easier because they have done a lot of the legwork for you. Just reading that offering memorandum, looking at pictures, getting a good visual identity of what that property looks like currently, that’s all it’s about.Trust but verify, no matter how you are looking at it.Kathyrn East(314) 596-6542<a href="mailto:[email protected]"...

How to underwrite a self storage property? How to look at an OM? Kathryn East has several years experience in the self storage space, she is the Founder of Sopapta Consulting, Management &amp; Auditing, and shares her knowledge.You can read this entire interview here: bit.ly/3JMFgayWe are going to underwrite a deal together, and see where Kathryn's mind is at when she gets an OM, I will let you take it from here.Deals are made. In order to create the cap rates and the profit analysis that’s needed for specific clients, I have to underwrite these very carefully. I love OM's, they generally have 95% of the information that I need. The first thing I’m doing is looking at pictures, it sounds very elementary, but I need to see the property from their eyes. Those pictures are designed to make the property look better than what it is, so there could be some filtering applied. The purpose of that is to see what the general condition of the property is, because I have to know how much Capex I’m going to have to put into this property, and that’s directly going to affect my evaluation.The next step is to enter the numbers exactly as they’re stated on the OM, into an evaluator. I need to see, from the numbers that they provide, how accurate is it to get that price point that they’re looking for. Most of the time, brokers are cap rate driven, so if I’m looking at a property that says that they want 1.2 million at a 6.5 cap rate, I need to determine whether or not that’s realistic, based on the information they’ve provided in their current analysis column. We all know that as interest rates go up, cap rates go up, things fluctuate, it’s a cycle.When I’m looking at the numbers, I’m trying to determine whether or not it’s a fair asking price. A lot of times we’ll find some small issues on the underwriting on the offering memorandum and that leads to questions for the broker, so we're able not only to decipher whether or not they’re necessarily a self storage broker, and believe me, I love self storage brokers, because their underwriting is quite impeccable, but they often underwrite price for pro forma.What do you think when you see a broker put a projected cap rate for year one or two and not the existing cap rate?First of all, don’t buy off of a cap rate, but you can determine what the value is on your exit strategies on cap rates. If I buy this property at a six and a half cap, I’m estimating to sell it at a 6.5 cap in my exit strategies, which are three to five years, generally. We have seen a lot of inventory come across that has been selling in a year or 18 months, that was a year ago, that’s the past. Now we’re back onto our holding pattern. It’s always a cycle, so we are back to the three to five years. When they say “I want $2.4 million based on the exit strategy I’m projecting in five years of an eight cap", I’m asking “Where did you come up with that information, because our current column is more like 2.5?”.A lot of brokers are dictated the pricing by the seller themselves, so they have to ask their clients how much are you wanting for this property? They throw out $2.4 million, the broker runs the analysis on the current numbers and says “That’s at a four cap, interest rates are at a six and a half, you’re probably not going to get that”. Then the client says “Well, you are going to get it for me anyway”. Which is why underwriting as-is is so important, that is what will give you your actual asking price.Kathyrn East(314) 596-6542<a...

Why should anyone invest in car washes? What are the pros and cons? What are some ways to add value in car washes? Whitney Elkins-Hutten, Director of Investor Education at passiveinvesting.com shares her knowledge.You can read this entire interview here: bit.ly/3zV7qvFWhat are some of the pros and cons of car washes that you have invested in so far?A pro would be that we are looking to buy properties from Mom and Pop owners that are already stabilized and performing, ideally they already may have several properties under management. However, because they are the operator, they haven't figured out how to scale themselves out of the business. That scaling problem is what we are looking to solve. That is also the next pro, because we are looking to build one of the only third party management companies for carwashes. We take advantage of not only operational expenses, sharing full time employees between different properties and keeping our labor expenses low. But we can also keep our chemicals and supply expenses low because we can buy in bulk. We also have a great Training Management Program. Anyone that has run a business knows that one of the hardest things to scale is your people so with this, we can actually achieve that type of scaling. Then, the ability to layer on a strong brand and duplicate that model over several other properties is of benefit.&nbsp;As for cons, this is a different type of investment. Investors that get into the space can be starry-eyed, they may look at the returns and think that this is easy money. They may think they can make passively 10 to 15% cash on cash 20 30% IRR on this type of investment, but it does come with its different types of risks. It has seasonality type risks, business competition and competition between competitors. There is also intra competition, which is between the assets you already currently own. You have to be partnered with an operator that knows what they are doing as far as being able to acquire the right facilities that have the right metrics layer on this type of strong marketing brand. When buying a carwash, you can't just pick a piece of land and build a carwash, it doesn't just work anywhere, you have to have eyeballs on the property. More importantly, you have to have the traffic count coming by, similar to self storage, you need the traffic count coming by, but it also needs to be able to turn in the correct direction and lead to the correct direction. Whenever you get the traffic on the property, you now need to be able to manage the traffic on the property and get a correct flow to be able to service your customers because at the end of the day, it's your customers that's going to drive your business.What are some ways to add value in car washes?One, make sure you are in a great metropolitan service area that has the demographics to be able to support a carwash. Start the due diligence while you're under contract, what is the current operator doing well? What are they not doing well? What we are seeing, especially picking up from mom and pop owners, is that their employee count is very high. Their employees are not trained, there is no strong branding on the property, they haven't moved to subscription model. Look for ways to increase your income, look for ways to decrease your expenses. Can you renegotiate vendor contracts to bring down some of your chemicals that you purchase? Can you optimize the tunnel speeds so you are not spending as much in water and electricity? Can you add an express lane to the property to add an additional tier to your subscription model and move those people that pay a higher tier through faster?Whitney [email protected]<a...

Today I will be talking about the recent interest rate hikes. How crazy is it that just the latest rate increase was a whopping .75%? But... is that actually good or bad? Have you done the math? I have, and I will let you know how does that look for us, awesome investors.&nbsp;You can read this entire episode here: bit.ly/3Ja6yreOne super important thing that I want to talk about that I haven't heard anyone talk about yet is the fact that obviously, interest rates are going up, Oh, how terrible is going to be, a 6.5% interest rate after this latest increase on July 25th 2022. Some people are saying it's going to be in the eights by the end of this year. And guess what? I literally don't care. I did all the calculations and wanted to share it with you so that you understand that having high interest rates really do not matter. The cap rates go up as interest rates go up. I'll start by sharing some calculations that I did. Let's say you have a property that has a $300,000 NOI (net operating income) per year. And up until the beginning of this year, cap rates were for this kind of property were at around 5%. So the sales price for this property would be $6 million in January of 2022, and at that time, the interest rates were at about 4%. So we're going to do a calculation here at a 30% downpayment on a $6 million property at a beautiful interest rate of 4%. Your loan is going to be $4.2 million, and to keep things simple, we're going to do an interest only calculation, so $4.2 million at 4% interest only is $168,000 payment per year. That's a beautiful interest rate. That's a high price.Today, we're getting a higher interest rate, and because of that the cap rates are going up. So that means that the price for these properties are starting to go down. It's pure math, unless people are buying this with 100% cash, they need to get a loan and the loan is directly tied with a debt service coverage ratio. The debt service coverage ratio for those of you who may not know exactly what that is, is the ratio of cash available after expenses to service the debt, in other words, it is the ratio of how much net operating income you have to make your mortgage payments. So this should be around 1.2 to 1.3 debt service coverage ratio, that's what the banks look for. And in order for people to be able to stay at that 1.2 to 1.3 debt service coverage ratio, the price has to go down on these properties. So now, let's look at a mortgage rate of 5.75%, which is more or less what is happening today.Let's move this $300,000 NOI property to a 6% cap rate, and depending on the asset class, you may be a little bit higher, you may be a little bit lower, but let's average this cap rate at 6%. So at 6%, the sales price is going to be $5 million, you just got a $1 million discount because the interest rates went up. Now, I'm calculating from 4% interest rates to almost 2% more at 5.75%. The interest only payment with 30% down on a $5 million property is $201,250. Now, you are paying $168,000 a year at a 4% interest rate, and now you're paying $200,000. With this higher interest rate, as well as shaving off a million dollars, the price difference on your mortgage payment is an additional $33,250 per year. But let's not forget, we got a discount of a million dollars. To put it simply, you're going to be paying $33,000 more per year, and you got a $1 million discount! So let's calculate $1 million divided by $33,000, guess how many years is going to take for you to start being on the red? 30 years, it's going to take 30 years for you to get to that $1 million discount you got. If you're worried about the high interest rates, you should actually start celebrating!Steffany Boldrinilinkedin.com/in/steffboldSign up for our newsletter here: <a...

Top lessons learned from a bad industrial investment. How to analyze an industrial property? What's the state of industrial investments today? Chad Griffiths has been an industrial real estate broker since 2005 and investor since 2014.You can read this entire episode here: bit.ly/3APQyIKWhat is your success criteria for selecting an industrial property for purchase?I am a big believer in looking at downside risk first. Instead of trying to convince myself why I should do that deal, and to some extend you have to, but I do look at the downside risk first. How I look at it is, once the property is vacant, I do the exercise of finding out what that property is worth vacant. Even if you’re buying an industrial property and it has a five year tenant in it, that tenant might not renew when their term is up, they might go bankrupt, there are any number of reasons why the tenant could move out before their lease expires.I go through the exercise of determining what that building is worth vacant, and compare that to the pool of available properties for lease, properties for sale, any comparable transaction data that can be offset against it is helpful. This helps us go through the exercise of identifying any things that might be wrong with the building – for example: low ceiling heights, limited power or a poor marshaling area for trucks to get into.If a property has any of those characteristics, at some point it will be vacant and I want to know what my downside risk is by identifying that first, then I will start building out a pro forma on 5 or 10 years and making a number of assumptions. You can manipulate a pro forma in any way you want to have it spit out numbers that look appealing, but before I go through that exercise, I’m making sure that I don’t have exposure that I can’t afford.Can we go over a deal that you have recently looked at and you either decided to write an LOI for, or not move forward with it?I can share one that I bought, and subsequently sold and lost money on it which is what really helped shape my position on this on why I’m so diligent about this. In 2015, the second property that my partner and I bought, it was a condominium building, similar to residential, a lot of people don’t realize that industrial can also be condominiums. This was a 20,000 square foot building, and there were 10 individual condo warehouse bays, and the neighboring company owned their bay, they were a seafood distributor that wanted to expand, but couldn’t afford to buy the one next door. We ended up doing a lease with the owner at the time and then buying it back from him.We thought we were geniuses, this company already owns the bay next door, they just invested $250,000 and a cooler, and when 5 years comes up, we’re either going to be able to renew them at a higher rate, or we can sell it to them at that point. When the time came, we caught word that they had moved to another building and they were preparing to vacate ours. They were either brilliant in their negotiation tactic, or we just panicked, but we ended up selling it to them for about a 15% loss, because they called our bluff on it.The reason we sold it was because it only had a cooler in it. There was no washroom, no office space, so we would have been forced to pay to have that cooler removed. We tried finding other companies for it and we couldn’t, and we didn’t want to take on that risk, it was right at the beginning of COVID. Had we gone through the exercise of asking what is this space worth vacant before purchasing it, we wouldn’t have paid the price that we did.Chad Griffiths<a href="https://industrialize.com/" rel="noopener noreferrer"...

What are the steps you should take to develop a self storage facility from the ground up? Skyler Hartman, CEO of Capitaline Ventures will generously share his knowledge with us.You can read this entire interview here: bit.ly/3bEbUyaLet's go over the process of developing a self storage facility from the ground up, you can start from the decision on where to find the land, all the way to the beginning of construction, and everything in between.I like to look in my backyard first because I know the the economics of my surrounding area better than anywhere else in the country, there's less research needed, but that does give you a limited scope. I would always start with the economic analysis and verify that the city or town is growing, that there are good jobs, schools are adequate and getting good ratings, I don't want to be in a war zone. Wether storage may perform great in a war zone, that's just not the place I want to be. So I start with an economic analysis and a little bit of city due diligence, I find out what the zoning process is, is it a conditional use permit? Does it fit into commercial general? Is there any overlay districts that may allow storage that I'm not seeing? Or is it strictly light industrial? Know your zoning, and your economic analysis.From there, I do some competition analysis, basically mystery shopping. I have a basic spreadsheet with unit sizes prices, I'll shop online first and try to pinpoint their occupancy rates. And you can see that on some sites have "not available" or "call for availability". And you'll see the other units that are available as "rent now". Some REITs like U-haul won't even publish prices if they don't have units available. So you can really drill down on your competition quickly. And from the online search, I'll then do a phone call and evaluate the customer service. Did they answer the phone? If not, did they call me back? Were they polite? Were they professional?Moving on to finding contractors and doing land surveys, let's say someone is brand new to all of this lingo, what do they need to look for? What do they need to get? And how would they even figure out if a contractor is good for self storage or not?I would interview at least five general contractors, and I'd prefer a design build contractor. They will help me through any of my processes that I get hung up on, and the entitlement process if needed. We're really good at that in our company, nut sometimes there are some issues that we don't see or it's an area that we're not familiar with, such as California, we have a project going there right now, which I probably won't do another one there. With that being said, design build firms are excellent in walking you through the entire process, as well as optimizing your design from the start. Typically, you'll get a cost plus bid from a GC or that's what we want to see, a cost plus. What that means is whatever the build cost, if it's $5 million, the builder will then put their price on top of that, which is typically six, eight, or 10%. Depending on how much business you do with the firm, you'll get a different pricing plan. The benefit there is if they bid the project at $5 million, it's an open book project, we come in at $4.5 million, that $500,000 in savings goes right back to us, which is excellent.How long would a project take from beginning to end?Let's say it's a 100,000 square feet of net rentable, depending on the city process, you could go from start to finish in 12 to 14 months. Six months in design and six months in the build process.Skyler Hartman(801)...

What are the top 5 things you should keep in mind when negotiating retail leases? What kinds of tenants are leasing retail space today? Drew Kristol from Marcus &amp; Millichap shares his insights.You can read this entire interview here: bit.ly/3OwCHubWhat is the state of retail right now, and what kinds of tenants are leasing a space?Florida came back very quickly after COVID, we have a government that is very pro business and has done as much as they can to try to encourage people to get outside and shop. There has been a lot of business occurring in Florida, whereas some other states have been locked down and not encouraging the amount of outdoor experiential shopping. Marcus and Millichap had its all time greatest year in 2021, with $90 billion worth of sales. Our previous high was $45 billion, and we’re actually ahead of the sales this year compared with the previous year. I think the main reason is that there has been a lot of real pent up demand in the retail market, and we are seeing returns that are a lot better than other product types. What do we mean by product type? Multifamily, industrial, office, retail land, those are really the major product types.What are the five most important things that retail investors should keep in mind when negotiating leases?1. Try to get annual rental increases that at least match inflation. Inflation is off the charts and I don’t know if it’s going to continue to go this way, but I would say try to negotiate at least 2.5-3% minimum annual increases, but the more the better. A lot of people are going to look at “What is my NOI growth over time?”. The only way to match inflation is to have increases. And if they don’t, when you market the property, people are going to do their analysis, and will be a little concerned that the growth is flat, and they may pass over your deal, or offer you a lower price to get a better return to cover for that.2. Always do a NNN lease. Expenses are going up, we’re going through a mini insurance crisis right now in South Florida, where insurance used to cost about $1 per sf for the building. We’re looking at quotes in some cases between three and $5 a foot in certain areas.3. Have a tenant base that is as service oriented as possible. You don’t want to have too many tenants in your tenant roster that someone’s going to inspect that rent roll and say “GameStop is not long for this world, kids are downloading video games, how is that business going to last if kids keep continuing to go online and download their video games?” You don’t want too many tenants like that, that are not long term for this retail world. You want to have a good mix of restaurants if you have the parking, because you need parking to add restaurants4. This is important, have a thematic tenant roster. You want to try to not put the wrong type of tenants together. If you have children’s clothing, a daycare, or a church, then you don’t want to put a marijuana dispensary in the center even if you’re allowed to. They may pay good money, but they may drive off other tenants. If you have a bar, or a liquor store, then sticking a marijuana dispensary may not be a bad idea.5. You should always be in constant contact with the rental market.&nbsp;An owner should want to know what all their neighbors are paying in rent, or what developments are happening locally, what new laws could affect their property, what new zoning codes are coming in, that could add density or be a detriment. Brokers can add a lot of value, it's important to pick up their calls, in order to understand where the market is, it would be a mistake not opening themselves up.Drew Kristol(786) 522-7065<a...