Commercial Real Estate Investing From A-Z

The information in this post were my notes from the Women's Real Estate Investment Summit by Beth Azor. I highly recommend attending this next year.You can read this entire episode here: bit.ly/3QbW8KFLendingBecause self storage is a business, you can do an SBA loan to purchase. Make sure to go with a lender that is experienced in SBA loans in order for it to take the least amount of time. You will find these lenders at industry specific conferences, you should also ask your network about them.It was recommended to never to do a CMBS loan, even thought the rates are great, because you are stuck with it for 10 yrs, there's a prepayment penalty, you cannot put a second loan on the property, and it gets sold multiple times over the life of the loan, and you don’t have a direct contact. They can foreclose on you very quickly.Make sure to ask lenders if they service their own loans.Look at NOI/debt amount. Lenders like 9% and above debt yield ratio.If you're syndicating a deal, documentation on capital call is important for banks. Also, the controlling interest should stay with operator (this will also be required by the bank).Finding dealsCall brokers regularly so they keep you in mind.Deals are getting done because of Linkedin. People are meeting people online, they are becoming influencers in their specific real estate field, and they are finding deals because of that, as well as growing their network.Purchasing propertiesLet/make brokers invest in the deals that they’re bringing you. They will be very honest with the value of the deal they are investing in, they are also a great resource for any questions, and they understand the industry.Best practicesDo a stress test analysis on your underwriting (and your existing properties) to see how the potential property would survive in an economic downturn. For instance, what would happen if 10-20% of the tenants left, what would happen if rents decreased by 10-20%.By the numbersWomen outperform men in real estate investing by 2x1. I say this knowing that my audience is 65% men, and I love men. I say this because I want all the guys here to be mindful and purposeful to partner up with women. It has been proven over and over again that diverse teams in all industries do much better than non diverse teams.Beth asked lenders how many women have they lent to in their entire careers, they said between 1 and 3 women. That's an average of one woman per decade.RetailBeth’s #1 acquisition strategy: 100% leased centers (rents are too low).Never vacate old tenants before new leases are signed.Watch out if a business is being sold to an EB5 person who is just buying to get a visa. If that happens, they will likely not run it properly and will close the business after they get the visa. So you need to start thinking of who may take over that space.When you paint a retail center, calls from leasing brokers go up 20%, every time!When your tenants call asking for something, give it to them, but ask for something in return (like a waiver).For retail signage, have white letters on dark backgrounds, it jumps out in retail.Metro PCS is known for not paying rent.<a href="https://www.linkedin.com/in/bethazor/"...

How to evaluate and purchase a retail property by yourself? Where to get started? Jessica Malcomnson purchased two retail centers in the last couple of years and shares her lessons learned.You can read this entire interview here: bit.ly/3m59g6tHow did you purchase your first retail center?I started out with a single family investment. I then also picked up short term rentals, office, and a warehouse building. My dream was to own shopping centers, and in 2019 was when I really began the journey to invest in shopping centers. And I realized at that time that, because I had taken some time off, I knew that I had to get back in the business, my career had lost momentum from a leasing perspective. But I knew I had to get back in and start networking with the brokers who are selling the real estate that I'm looking to purchase. I started to get back in to attending networking functions, local ICSC events, just so I could get my goals out there and network with the brokers who are selling shopping center.How did you get your first few loans because a lot of lenders don't want to lend to people who don't have a full time job.That was one of the challenges. My first shopping center was going to be my biggest purchase to date, and the lending process was new to me. Originally when I started the process, the broker that I was working with, Joe Russo of Marcus and Millichap, was fabulous throughout the process and really held my hand in every step. I never at any point felt like he was doing this for financial gain, he referred me to a loan broker. They want to see what kind of experience do you have. And then they look at your financial statement.What was this first opportunity and what was the upside of it?Looking at photos of it, I was thinking that it's probably not a property that I want to purchase, but once we dove into the financials, I realized that this is something that should be of interest to me, I can't judge it just by looking at the photos. I decided to take a road trip to visit the property, I'm located in South Florida, the property is located in the Jacksonville market, that's roughly a four to five hour commute. I remember standing in the parking lot, sometime around two to three in the afternoon, seeing the amount of traffic passing by the property. It was also located at a lighted intersection, next to a McDonald's, across the street from a Walmart neighborhood market. I said, "Wow!", I was willing to pass on this property just based on photos because it's not "sexy real estate". But now I'm here standing in the parking lot looking around and noticing everything that's happening, and then I realized that this is something that I need to pull the trigger on.What are some of the cons of retail?One of the issues that came up, after I purchased my first shopping center was that the insurance company that I used sent an inspector out within the first couple of months. They do a full inspection of the property, and they come back with a list of items that they want taken care of in order to continue with the policy. And that was a big surprise, I never had that issue with any of the properties that I managed in the past.&nbsp;They wanted me to reroof the property because the roof was old, but it was also not leaking, so they accepted a seal coat of the roof. That was a huge expense that was not expected, when we didn't even have reserves yet.Jessica Malcolmsoninstagram.com/Jess_Malc<a...

What are some top advices for an investor looking at growing their portfolio and taking it to the next level? Chris Rising, co-founder and CEO of Rising Realty Partners, shares his top insights on scaling, delegating and syndications.You can read this entire interview here: bit.ly/3lmpB6zYou have scaled your business to an incredible level. What are some of your top advice for an investor looking at growing their portfolio and taking it to the next level?On the syndication level, investors do expect a lot of hand-holding, and a lot of communication. And there’s a lot you can do digitally now that you weren’t able to do before. You’re really in two businesses, and maybe even three if you’re a property manager. You’re in the business of identifying real estate that you want to buy, you have the acquisition side, the operation side, and the investor relations, syndication business. That’s what our business looks like.On the operations side, we have asset managers who are more experienced in the real estate business, they have an MBA that oversees, maybe five assets or four assets. We have property managers, we have four or five people in the acquisitions team, and they are finding deals and underwriting deals. And then, we have about three or four people in our Investor Relations team. The mantra of my former mentor, or of my former boss, John Fishman used to say is, “You have to find them, mine them, and grind them.” And so, you have to be able to find the investors, you have to mine them, and then you’re grinding, you have to keep communicating and you have to keep growing.You can raise millions of dollars from one person if you keep communicating, even if deals don’t meet the return that we project. That doesn’t happen often, but it does happen. It doesn’t always happen the way we hope it would, but if you communicate with people, they feel like they’re part of your team and they understand the issues that you have. If you don’t communicate, you’ll never hear from that investor again.How you approach things when you want to delegate things? And when do you want to partner up with people, and what is your process for partnerships?I have enough scar tissue from bad partners, but I don't want someone to interpret bad partners as a bad human beings. When I say bad partners, it's just that our interests and/or expectations were not aligned, and it gets very difficult. The interesting thing about investing is that everybody's nice when things are good. When you lose a big tenant, or there might be a capital call, then not everybody is so nice. And that can also be within your partnership. I wish I could tell you that I have this wonderful method after so many years to identify partners, but I don't. What I do know is that if I'm talking to someone about being a parter, and if I can't make the decision right away, and I'm thinking about things, I usually say no. It's not always a scientific method.On delegation, the hardest thing you can do is to hire people. And the reason is, you really don't know what people are until they've been in the company for a while. We now make sure that they take tests to know if they can do their job. If you're going to be an acquisitions person, we're going to make you underwrite two or three buildings before we hire you. You have to have systems that allow you to use your time most effectively to make sure some things get done correctly.Chris Risingwww.chrisrising.com<a href="https://twitter.com/chrisrising" rel="noopener noreferrer"...

How to grow your retail portfolio and syndications? We will review the career of Aaron Zucker, founder and principal of Zucker Investment Group, they purchased 22 deals in the last 40 months through syndications. What does he look for when purchasing a retail property? What are some of the lessons learned so far?You can read this entire interview here: bit.ly/3w5RwO2How did you scale so fast? Let's go over your journey in the retail space and break it down to about every two months since you decided to start your company.&nbsp;In the beginning I moved into my parents basement with a six month old. That was interesting to say the least, with no portfolio and not much of a plan. There was a plan, it was just notes on an iPad. We bought our first property as a covered land play in Irving, Texas, we still own that property today. It's on the border, on a great location, and we are planning to monetize that property in some way shape or form over time. Until then we're enjoying the cash flow. I'm about to break out in hives thinking about that experience, I had $50,000 of my saved money non-refundable without all the equity figured out. I was raising $1.8 million, which I definitely didn't have, from anybody and everybody who told me they would be interested in buying real estate. It was a good litmus test to see who was actually going to be a real LP in that company and who was just talking, or maybe wasn't interested in that type of deal. It worked itself out, we got the equity resolved and bought a deal.Then some time went by and people were still feeling out whether or not Zig was real. I'm sure that's still certainly the case, we're still trying to build a reasonable reputation. But we were able to source a couple more opportunities pretty much exclusively through the brokerage community, off market. That's a testament to the quality of relationships that I had and still have and I'm always building upon which we couldn't be any more bullish on leveraging the brokerage community, and getting them excited about the fact that we not only allow but encourage them to invest in deals with us, and they appreciate the fact that we move extremely quickly. We're young and nimble and are certainly aggressively growing. The mantra about our organization is that we're super aggressive, and we are, but when we look in the microcosm of a specific acquisition, it's usually pretty conservative.I'm a one man band at this point, I continue doing my thing, posting on social media saying we're looking for deals, hitting the phones hard, following up with the brokerage community, calling sellers, whatever it takes to procure something. Then one day, we acquired a sexy site, which was a Lululemon, single tenant. It was a Lululemon condo, and a joint venture with a group called Konover South based out of South Florida.Months thereafter, we were able to unlock an off market Chipotle deal, at an aggressive cap rate in a great market in Orlando, we executed on a blend and extend with the tenant and then flipped out of it. We sold that property in March of 2020 before the pandemic was hitting, and there were a few other acquisitions that were a little bit more boring. Between the time that we bought and sold that Chipotle, and the disposition of that, was what put Zig 1.0 on the map and gave us some some credibility that our group was looking for, and then more most importantly, executing on value add retail deals with great tenants, Chipotle, Lululemon in very good markets like Cincinnati and Orlando.Aaron Zucker<a href="http://instagram.com/aaron.zucker" rel="noopener...

I’d like to share something that I started doing in 2020 that has been very useful for my real estate investment career.You can read this entire episode here: https://bit.ly/3se26jQIt's a very simple thing that I developed that has been very beneficial for me. It’s what I call the “Word of the Year”. It started in 2020 when I decided that that year I would focus on diversifying my investments because of the chaotic environment we were in, especially where I was in CA. My word for 2020 was “Diversification” and I decided that I had to diversify not to optimize for returns, but to decrease risks, well because the entire globe was shut down, nobody knew what would happen and that the country would print so much money. I ended up purchasing car washes, self storage, land, some crypto and some unique stocks I hadn’t thought of investing in before. The car washes and self storage did well, land we are a bit above what we invested, and the stocks initially went up and today they are down, so I am on the red at the moment. Looking back, it seems like I have achieved my goal of decreasing risks. I haven’t sold the stocks yet so that is TBD.For 2021 I realized that I was getting overwhelmed with doing everything myself, I knew that in order to expand my business I had to start putting processes in place and delegating as much as possible, so that I could focus on the important things and the bigger vision. I decided that my word of the year for 2021 would be “Delegation”. That year I started writing down everything I was doing, step by step, creating videos, making it as fool proof as possible, and hiring virtual assistants. Not all VA’s worked out, but I ended up with a couple of them that are working out quite well. You then start to see what each of their strengths are and you move tasks accordingly. In order for this to continue going smoothly throughout the years, the processes will have to be reviewed every 6 months to 1 year in order for us to make sure that the steps are up to date and that the videos are up to date. I will delegate that job to my VA :)Because you spend all year focused on the word of the year, it really engrains in your mind, so the words trickle down to the following years. For example in 2021 I invested in short term rentals. In 2022 I made a point looking at every task I was doing and to first ask myself: Can my VA do this? I am delegating more and more and finding more time. It can be literally anything from personal things all the way to calling the city planning department and finding out if this property is zoned for something we want to build there.The 2022 word just came to me in April, I am a part of a book club and the book we were reading The Almanack of Naval Ravikant and one of the quotes that stuck with me was “You will get rich by giving society what it wants but does not yet know how to get. At scale.” The way I made it work as far as real estate investing is, giving investors (when I syndicate) the absolute best service ever, they are our customers from a communications perspective, to great returns, to implementing technology in our investments as much as possible, and doing that "At Scale". Doing real estate at scale. With this mindset, everything that I am doing and thinking and looking at is, How am I going to be scaling this business?It has been wonderful, and I think it’s important to keep it a word of the year, or maybe every 6 months, but definitely not a monthly word because that may not really stay with you and you may not end up doing everything you want to get done during a month.Add me on Linkedin: www.linkedin.com/in/steffboldSubscribe to our newsletter: <a...

Are funds more beneficial than syndications for the investors? Are they better for the sponsors? How to approach investors when you have a deal? How to find a great partner in the industry? Brian Spear, Principal at Sunrise Capital shares his experience.You can read this entire interview here: https://bit.ly/3vjvOGaWhy do you recommend people creating a fund instead of syndications to be begin with?I wouldn’t say that, with absolute assurance, everyone should always create a fund, but I do believe that funds are better structure for both parties involved. Selfishly from the general partner side, it ‘s more flexibility of capital, it affords you the opportunity to be able to move at a moment’s notice. If every time that we stumbled upon a given transaction that we wanted to acquire, we had to roll out a brand new syndication. Then we would miss some deals, some opportunities in a hot market such as this, when you have to compete against other people. The brokers want to know where your equity derives. If you don’t have the ability to say, “I’ve eight figures sitting in the bank right now and I can close on this next week if we really need it to”, then you’re going to be at a little bit of a disadvantage, especially in this crazy environment where there’s so much capital chasing deals. The fund affords you to have that capital ready when those opportunities arise so that you can act and move faster, that expediency helps tremendously.&nbsp;Funds will afford you to provide outsized IRRs as well. Depending upon the scale of your respective fund, you may be able to garner some lines of credit, which would afford you to be selective about when you bring capital in and leveraging that provides your investors with a higher internal rate of return. In addition, you get diversification across the various different assets.I’m assuming that you recommend people doing a syndication first, because it’s probably very hard to raise for a fund first?Yes, you want to use your own capital to go out and prove the business model. To have a simple, scalable, and repeatable one prior to rolling out a fund. It would be imprudent to just launch a fund from scratch, you need to go out and prove yourself first. There’s nothing wrong with that. But I do think that ultimately, the fund structure provides more benefits for everybody involved. I would pose to you that’s why the likes of Blackstone, Carlyle Group, Apollo, all the guys on Wall Street, don’t run out and do individual deals specific syndications. They do fund structures without fail for all those reasons.How do you approach an investor when you have a deal?The question of how you approach investors when you have a deal begins well in advance of when you have a deal. You’re never going to reach out to somebody, and hard sell them on wiring you $100,000 one day after you have a deal, come under contract, and all of a sudden need to scramble to get that capital. What you need to do is develop that relationship with the prospect or the potential investor many days, weeks, months or years in advance of that opportunity arising. If you intend to scale actively in this business, you’re going to need to build a substantive Rolodex. And you’re going to need to begin providing that Rolodex with valuable content that provides them with insight and knowledge that you are an authority in your industry and are worthy of their time, energy, effort, and ultimately capital, to partner with you on deals as you progress.Brian Spear<a...

How to invest in parking lots? What are the benefits and drawbacks of parking lot investing? How do you even go about learning about this new asset class? Are there lenders in this industry? Brian Spear, Principal at Sunrise Capital, shares what he has learned over the years.You can read this entire interview here: https://bit.ly/3rFaXuJWhat are the pros and cons of owning a parking lot?Starting with seeking favorable long term economics, the demand for parking is growing and will continue to grow over the next several decades. The two largest generations that we have, Gen Z and the millennials, are going to need vehicles and travel throughout the entirety of the country. That demand is continuing to increase, while the supply of parking is shrinking over time. As the population grows, cities are getting more and more dense, developers are taking some of the high quality parcels in downtowns and redeveloping those assets into a higher and better uses.&nbsp;Parking lots are prime parcels and some of the best locations in the country, just by the mere fact that somebody is willing to pay you money for the right to stand on my piece of land, tells you that you’re in a very high quality urban business district, or a very high traffic tourist destination. It’s exceptionally high quality land with low maintenance costs, there’s really not a lot going on inside of a parking lot, you have some bumper blocks, striping, but there’s not a lot of high capital expenditures inside of a parking lot. The vast majority of the revenue goes to the bottom line.How about some of the negatives in that space?Because it is fragmented, it is more difficult to scale in the industry, due to the ownership structure, most folks only own that one asset or those couple of assets. In order to scale, you’re not able to buy facilities and large swathes. Parking lots are more of a slow, steady plot. Another drawback is on the financing side. While there are some good lenders, just the mere fact that it’s not a well known asset class, there are fewer lenders in the marketplace that understand the asset class. And for that reason, if you have a more modest sized parking lot, you’re likely going to have more difficulty garnering the best and most attractive financing terms available in the marketplace.How did you find that first lender?By networking at these parking conferences, there are a handful of those national conferences on an annual basis. It’s a relatively small industry, and because these are relatively small niches, you have the ability to climb the ladder a little quicker than what you might be able to do with the other asset classes. You can network with some of the players that are top tier in the industry, by virtue of attending some of these conferences and things of that nature and spending some time in the conferences, talking shop with some of the players in the industry, you can garner some business cards that will help you attract some of the better debt available.Do you get the land on all the parking lot deals as well?We want to own the land, the value from our perspective is in the long term ownership of the land itself. Customers literally drive the car up and park on an hourly basis.I always tell people go to a conference for any new asset class, that’s the number one step, you’re going to meet so many people that can help you.You can do a ton of learning while you’re driving and listening to podcasts, but at some point, you have to get out there and meet people and start to take an action in that manner as well.Brian Spear<a href="http://sunrisecapitalinvestors.com/" rel="noopener...

How to raise a $16M syndication in one day? What are the major things they wish they knew earlier in their careers? Mark Shuler and Josh Welch, founders of SGRE Investments and Three Pillars Capital share how they got there in their real estate syndication career.You can read this entire episode here: https://bit.ly/3Ec87SXHow were you able to raise $16 million in one day? How did you arrive at that level?I'm not sure we know how we did it, but we managed to do this crazy raise. We had done a lot of preparatory legwork, we both have a very deep database of investors, we've done enough deals now that we have a lot of frequent fliers. As you do a deal, your database continues to grow as people talk to friends and family. We just teed it up, we do a very detailed deal deck and offering memorandum. We do a lot of preparatory emails, getting people in the space to understand that the deal is coming. At this point we're over raising on every deal, everybody knows that we're over raising so they're committing fast and early on the deals, and it's a record for us. At one point, we were raising a million dollars an hour for eight straight hours. We shut it down in 24 hours, Josh was getting pummeled with emails and phone calls.It seems like you guys are good partners, how did you guys meet? How did this partnership come about?Mark and I have been working together for years now, we've done several deals together. We crossed paths, and decided to team up and go on this one, and to the next and we just kept the relationship going.What are some of the things that you both wish you knew earlier in your career to expedite things for other people that you think that is important for them to know today?Something I wish I would have known from day one is how important processes are to the operations and how important the operations are in general. There's a huge misconception in this industry, that if you can raise money you can be a sponsor, and go run a deal. The more of those you can do, the more successful you'll be. But the reality is, if you don't know how to operate these assets, day over day, year over year, they can quickly go south on you. A lot of people in this market have gotten bailed out by rising prices. There will be a day where prices will flatline and stabilize, maybe even go down a little bit. Those who pay top dollar for something that is not running well will not get bailed out. The biggest lesson is that I could have put more emphasis on in the beginning is how to get a better process in your operations.Either get a mentor, get educated, or get a master's degree. You have to build on your knowledge base, though experience is a great teacher, but some of it you just have to sit down and read. It's not what I wish I had done, it's what I did. I feel like I propelled my career forward by 10 years by doing that. The other thing that you have to learn in this industry is how to raise money properly. I joined a mastermind to help me with that and educate me, in one year I probably shave 10 years off my learning curve. To figure out how to raise money effectively is the fruit of my labor from last year. If you figure out the process of raising money properly, you can raise a lot of money. That can be with anything in this industry, or with running a private equity firm, processes everything.&nbsp;[email protected]<a...

Why should you invest in the metaverse? Which metaverses should you invest in today? Is Decentraland more democratic and Meta a socialist metaverse? How should you start educating yourself? Dave Carr, head of Business Development at&nbsp;Parcel, who also previously worked at Decentraland, one of the most popular metaverses, shares his knowledge.What would you invest in today?I love the idea of the metaverse, that it enables creators to do all sorts of fantastic things and own their creations as well, for musicians to not have to get their works through a platform that somebody else owns and takes the vast majority of their money from. For me, it's about virtual worlds that are enabling creators to get their work out there, but are also incentivizing users to come and use the space, and deriving benefits from that. If you look at it at a very specific level, the NFT's that have come out this year, all of the different avatars, the different projects have sold for an extraordinary amount of money. A lot of these NFT projects have just disappeared or gone very quiet, some of them have failed, the ones that survive are the ones that are able to create a really strong community around them, that have shown a very clear roadmap of where they are headed, and how the benefits will be rolled out to people who own it.It's the same in terms of physical investments, you buy a piece of land in an area that is going to develop and be valuable to the people who move into that space. A golden rule is to avoid putting all of your eggs in one basket.Is it be safe to assume that places like The Sandbox and Decentraland are more democratic and Meta would be a more socialist world?In terms of control, you could say that Decentraland and The Sandbox are more democratic. That's a whole other discussion in terms of the governance structures of these open virtual worlds in the open metaverse because even the governance structure is still a test case if you like. But in terms of Meta, I'd be very surprised if they handed over control to the users, but I don't see that happening. Facebook, has been incredibly successful because you are the product and your data has been monetized. Some people are very happy with that, it's absolutely fine. It'll be a different experience to the decentralized worlds, I don't see it as a bad thing for Meta to be entering into this space because it educates people to what else is out there. The people can make the decision as to which experience they want to devote most of their time to.Anybody could come up with the next Decentraland and they can all create these worlds, tell us why we should invest in these worlds?Yes, anybody could come along and create a new Decentraland, and try to replicate this and potentially do it better. The benefit that Decentraland has is that it has the lead time it has been doing this longer. The Sandbox is not fully live yet, but it has been doing the backend development work, they will get it right when it launches, and be sure that it is working properly. Similar to Decentraland and other virtual worlds, they have the runs on the board, they have the brand partnerships in place, they have the content community familiar with it, they have the architects in their building, and they've been developing those people as well and supporting them. If things go according to plan then they will continue to be one of the more established worlds. They've made the mistakes that everybody is yet to make, there's a lot of benefit to be had in being first to market.Dave Carrtwitter.com/parcelnft<a href="https://parcel.so/" rel="noopener...

What is the metaverse in very basic terms? Why should someone invest in land in the metaverse? Can you be a developer in the metaverse? How to monetize it? Dave Carr, head of Business Development at Parcel, who also previously worked at Decentraland, one of the most popular metaverses, shares his knowledge.What is the metaverse, from someone that would not even know it is to begin with?The Metaverse is a more immersive version of the internet. In the very early days of the internet, you would go to very specific websites, now it’s very much a seamless part of our lives. But you would visit these destinations, and you would do things and then you would go to another website. I think we can look at the current virtual worlds as these new versions of these websites that you used to visit. If we take an example of Decentraland, you can access it via your regular browser. There are other virtual worlds that you can access from a desktop client, like an app that you will put onto your computer, there are some worlds that you can access through your virtual reality headset and you are effectively walking, or your avatar is, and you look around and see buildings that have been created. You're able to play games, it's what we say is an immersive version of the internet. Then brands and organizations can have an existence and a profile in these virtual worlds, whereby because of its interactive nature, you can interact with brands. So what that means for virtual real estate is that if I am walking through a virtual world, I'm walking around on land that can be purchased and can be used to create a shopfront, a game world, an art gallery, all sorts of different mechanisms and experiences for the people who are logging in and walking around these worlds to interact with an experience.I get the part that we don't have to deal with tenants, we don't have to deal with leaky roofs or cleaning up after anything, you can lease the property out. Is there anything else that an investor would be able to monetize within the metaverse that we haven't covered yet?I think anybody looking to buy land in a virtual world really needs to think about the long game. Let's think about it like a video game, you can be a console owner, like you can own PlayStation, an Xbox, or a Nintendo, but if you don't have the games and the experiences on that console, it's just a box. I think you can probably think about this the same way with virtual worlds, you can build these worlds, you can sell the land. But if there is no value being added to these properties, in the form of festivals or games that people enjoy playing, or content that makes people want to visit and also come back and revisit then the land will not have the value. You can rent that land so there can be a rental income, there are also things like fractionalization that could potentially divide up the land and sell off those individual parcels.Does that mean that I could build a multifamily apartment complex in the metaverse, or condos and sell each unit?I imagine that's entirely possible and that comes down to fractionalization. If you look at some of the things that are coming up with just digital art NFT's, whereby a group of people individually can't afford to buy this one piece of art so they pull their resources, they then identify those pieces that they each want to have shared ownership. And just as a developer puts up a building, then each of those different apartments are bought by different people, and they form that corporation that ends up managing the building, then I think there's no reason why this couldn't happen in a virtual world.Dave Carrtwitter.com/parcelnft<a href="https://parcel.so/" rel="noopener noreferrer"...

Imagine building a $100M real estate company, losing it all, and then going to jail on top of it? That's what happened with Mike Morawski, he was sentenced to 10 years in federal prison, charged on wire and mail fraud after transferring funds from one syndication to another without notifying his investors. He discusses his top 5 lessons learned.You can read this entire interview here: https://bit.ly/3KQJYU1Let’s start with the growing too fast mistake. How slow is ideal for you and why?I catch myself sometimes wanting to go do something else, I have to put a pause and not look at deals because we're underwriting a whole bunch of deals right now. We're not willing to pull the trigger yet because we're waiting to get a little bit more down the road with stabilization, we bought our first deal, what we're doing is pausing a little bit. We're doing capital improvements, turning some units, we will get 25-30% of the complex turned, then we’ll go do the next one once stabilization processes are underway. Whenever you walk into something, just walk cautiously. I think too often we walk into things with so much excitement, so much vigor and energy that we don't pay attention to the little things, take the blinders off and use your peripheral vision.Moving on to the lawyer issue, if I were to ask a lawyer for some advice, I would follow their advice and think that I'm doing the right thing. Have you implemented something around that?Yes, I became the question guy, people say that I ask way too many questions, and I say it's because I'm curious and I also wanted to make sure that I'm safe. I don't think we should ever be afraid to ask questions, no matter how big or small, and we need to fact check. Just like when a doctor said you had cancer, and you didn't think you had it, you go get a second opinion. I think it's the same thing in the legal profession.When you're held at that higher standard, because you raise capital, or you have somebody else's best interest at hand, you're the fiduciary, and you need to tell them everything. Transparency and communication is more important today. You should have more investor calls, newsletters, written documentation, pictures, and things that the investor can't ever push back and say, I didn’t know this. When occupancy drops, call your investors and let them know what you're trying to do to solve the problem.In terms of vacancy, what was it before and what ended up being during the crisis?We would buy properties that were typically low 80s and high 70s in occupancy, people didn't want value add back then. Everybody loves it today. So we would buy these value add deals, and we would turn them around. We actually had occupancy rates in the high 80s, low 90s, 92% is where we averaged. When 2008 rolled around, occupancies dropped back into the high 70s. And it was overnight, and some properties went even further than that. I owned a deal in Anderson, Indiana, when we bought that property it was rated on a list out of of 275 by Money Magazine, the number three city in the country to raise a family, we bought that property, and within nine months it was fourth from the bottom, it was 281. Anderson was in the automobile industry, and those were one of the industries that got hit the hardest in 2008, automotive and transportation. We were heavily invested in markets like that. As a result, businesses went out of business, and people lost their jobs and had to move. I had a property manager call me on a Monday morning from this property in Anderson in tears, saying, I have 30 moving trucks in the parking lot this morning. How do you weather that storm? This goes back to being under capitalized, we didn't have enough money.Mike Morawski<a

How to deal with the worst possible outcome when it comes to real estate investing? Mike Morawski has dealt with the ultimate challenge, he was sentenced to 10 years in federal prison, charged on wire and mail fraud after transferring funds from one syndication to another without notifying his investors. He explains how he has overcome this life changing moment.You can read this entire interview here: https://bit.ly/366pNSJWhat happened along the way that was a mistake? What were the CAP rates at that time?I built a $100 million company with 100 employees working for me. We were in five markets around the country with 4,000 apartments. I thought that I had a team behind me that was getting the work done in restabilizing properties, but that wasn't happening. We should have taken a property, got it stabilized, and then gone to buy the next one, but I didn't do that. As an example, in 2007 I closed 17 transactions for 2,700 units, which was a lot of real estate in a quick period of time. I was undercapitalized and didn't raise enough money, I was over leveraged in that I bought all that $60 million worth of real estate at an 85% loan to value.Cap rates were 12-14%, they were a lot higher than they are now. As a matter of fact, I wrote a book called “Exit Plan”, and somebody was reading the book six months ago, and he called me to ask if I really bought that deal at a 13% CAP. I said yes. The funny thing is that I know the investor who just bought that deal with 4% CAP. It just goes to show you where the market is.You had a huge buffer with that high CAP rate, people today don’t have that much buffering in case of an additional 10% vacancy rate. Even though you were at an 85% loan to value that CAP rate is pretty high, so what happened after that?I just want to revisit that 85% loan to value, I don't think anybody should be in a real estate deal that they're not at 65-75% LTV. I've been looking at loans today, and some lenders sent me an email saying that they have loans at 80 and 85% LTV and I thought that's suicide.I had all this real estate, and 2008 comes around, it was the worst economic crisis that the country has ever seen. What happened was people started to move out of apartments, the market shifted and we had all this bad paper and foreclosures go to the market. My thought was, people are going to lose their house and they're going to need a place to live. Well, that wasn't what happened. People went home and doubled up, so our occupancies dropped. It was like hitting a brick wall, we started to come off of the rails and unwind as a company.By 2010, my occupancies had dropped and my NOI had dropped as a result of it. We went to some lenders and they helped us re-stabilize deals, but we still couldn't mitigate the storm. I had 38 companies at the time, and I had a number of deals that were very profitable and others that were not as profitable. So I started to take money from my profitable companies and move it into my non profitable companies. And my thought around the whole situation was, this is a recession and it tends to last 18 months. There’s a 12% correction in the marketplace, and then it bounces back. Well, this lasted for seven or eight years, it had a 40% correction in the market and people are still affected by it today. I thought if I move money between companies, and when the market comes back, I can put the money back.Did your lawyer tell you that you had to disclose that? Did he get charged for guiding&nbsp;you in the wrong direction?No, that was not ever part of the conversation, and I never thought I was breaking the law. They held me to a different standard because I was a licensed professional / syndicator.Mike...

Where can you find commercial real estate deals in today's market? I will give you several ideas of how to find deals both online and offline. It's not magic, it's just work!You can read this entire episode here: https://bit.ly/3LUm0bHWebsitesLoopnet.com is a good place to start looking for commercial properties, but the most popular and more modern website is called crexi.com. Some brokers post their listings on both websites, but you can find different properties on both. On Loopnet, you may be able to find listings from brokers that have been in commercial real estate for a long time. On Crexi, you may find more properties for sale from more technologically savvy brokers.People You KnowDepending on how experienced you are, you will be able to get deals from people that you know. As your network grows their deal sizes, they will be selling their smaller properties so they can get into bigger properties. Sometimes they will offer these properties to you and you can negotiate. I know many people that have bought properties from people that they knew because the seller knew that their friends would close the deal, they did not involve any brokers and the buyer got a discount.Brokers Mailing ListsPut yourself on mailing lists for your targeted asset class, from brokers that specialize in your asset class. How do you get access to these mailing lists? For example, you can search for Car Wash brokers, and you will see a few of them that only specialize in car washes, sign up for their mailing list. Type whatever asset class you want, and start putting yourself on their mailing lists on their websites. I get so many emails every single day from brokers that I signed up with a while ago who sell properties in the asset classes that I’m interested in.Cold CallingI have interviewed people before that have purchased deals by cold calling property owners, they build a relationship with these people over time. Sometimes it takes one to two years of cold calling the same people every six months or so, you do have to take good notes on what each owner tells you, for example, if they have a family, or if they tell you to call back in six months, follow up in six months. By the time you reach out to them,Work as a Commercial BrokerYou will get first-hand access to deals, you can even put your commission in the deal and the seller will not have to pay the other half of the commission for the entire five or 6%. They will just pay your side of it, and you can even negotiate it and say that you won’t charge them any commission if they will give you a deal.Follow Up on Deals That Did Not CloseI have a document that is titled “Revisit in Q3”, it has a list of properties that I think are potentially decent deals if they stay in the market for a long time. They’re good properties but, in my opinion, overpriced, so I don’t think they will sell, and I want to see if they will still be available in three quarters, or two, so I can make an offer then.Build AI ModelsArtificial intelligence models can analyze properties that are a good fit for you. I met somebody that built a model for one of these companies that flip homes. What the flipping company did is, they gave all of their data on all of the best deals that they ever had so that the AI model now knows what property is available for sale today that will be a very good fit with the previous properties that sold successfully. And now, the software is...

What are the top 3 ideas on how to make the transition from residential to commercial real estate investing? Amy Johnson, commercial real estate investor and principal at Y Street Capital shares her knowledge after being in residential for six years and moving to a successful career in the commercial space.You can read this entire interview here: https://bit.ly/3rFwFPsHow did you make the move from residential real estate investing and what made you think of moving to commercial real estate?We started in residential and went through that journey of house hacking our way through. What made that transition was really a lack of time. We got comfortable in the real estate world and we realized that doing these single units was too difficult to really scale and make it bigger. We felt like we needed to open our world up into commercial opportunities and that's when we made that switch from residential to commercial.What would be your top three lessons learned that you wish you knew before making the transition?1. Shadowing a professional. Go in, don't expect to be the professional on your first deal. Partner, or work with, or shadow somebody that has already done it. They've already gone through that, they already found the life lesson of XYZ and I'm never going to do that again. Go off of their learning curve for that. The easiest way to do that is you can usually be part of a syndication or something like that, or I've had people come and say, Hey, can I shadow you, and we can I work with you there. I'm careful with my time, but if you bring the right amount of value, maybe you bring the deal to them. We've done that with other people, they've brought us a deal, they said, I have this piece of dirt or I have this opportunity, I don't know what to do with it, but can I be part of your deal and learn from you, if I bring this to you, that's always been a win win. That will probably be my top one, shadow a professional to start.2. Selecting individuals that have other strengths than you. We all have different strengths and different superpowers. You need to surround yourself with other people that have different skills than you. For example, I'm terrible at Excel, it sucks the life out of me, but I love having conversations, I love networking, I can do that part. So I try to align myself with other people that are really good at the other parts. And we make a really powerful team.3. Try not to be a generalist, it's okay to have more than one type of asset that you're in. But if you're just chasing deals because you feel like it's a deal, and you're not mastering any of them. Maybe you're in flex industrial, then you go to storage, and then you go to retail and supermarkets or Dollar Generals, or you go to assisted living, or development. Those are all different things. They all have a very large learning curve in each of them. If somebody comes to me for retail, I'm sorry, I'm not a retail person. I don't do that. We try to stick to a bread and butter and keep to those specific things so that I'm not a generalist. We know those problems, so we know what to expect. It allows us to turn things over faster, and with less errors.What are some horror stories that you went through and how did you overcame them?The biggest one was not having the right amount of reserves. The second one was, everything takes longer than you expect it to happen. And that goes back to longer reserves. The third one is to not always rely on people's opinions of things, do your own research. The other one is that I'm never going to rely on $12-$14 an hour employees. That's probably the biggest horror story.Amy Johnsonwww.ystreetcapital.com<a...

What steps should you take to be able to quit your job and become a full time real estate investor? Bronson Hill, a syndicator and investor at Bronson Equity, who not only raised $15 million for his deals, but also just quit his job shares his path with us.You can read this entire interview here: https://bit.ly/3olStO6I had zero properties when I quit, but you did the right thing and you had real estate income before quitting. Can you share how your journey went?I admire you as well because like a lot of people say, I’m doing it, this is my new direction, burn the boats and just quit the job and I’m just going to go 100% into it. They do mentorship or other things, and then other people are a few months short of retirement and they’ve everything set up and all of a sudden they leave but I think I was somewhere in between. But there is a range of what people feel comfortable with.I had this relationship with my cousin and it has become a very transformational relationship. What he said to me was, everybody that he talked to wishes they had started in multifamily sooner. That principle really is the ability to scale or the ability to use other people's money, no matter how much money you have, no matter how much money you make. I had a couple of physicians that I worked with who made over $3 million a year, but they worked 80 hours a week. They weren't really financially free, they were kind of chained to have to go do that job. If something happened to them, they were disabled, they wanted to leave, they would just lose all of that income.Ask yourself, if adding another house, a duplex, a small multifamily, or whatever it is, is just completely overwhelming. If it feels like just way more work, then it's not really passive. That's a good passive or active test. There's really no such thing as a passive investment, but the idea of some things that are more passive.Were you able to cover your expenses by the time you left? You don't have to share exact numbers.I live pretty modestly, especially for LA, I just rent a place here, we have $150 million in real estate assets in Florida, Alabama, Arkansas, Texas, and Georgia. For me, I was able to at 40 to 50k, now it's more than that, but I was able to say, I can cover my living expenses based on this. And then each time I do a deal, I get an acquisition fee. Now in reality, I've reinvested most of the acquisition fees back in the deals that I'm doing. But then over time, when you do deals, you'll have things start to cash out. So there's some money coming from this deal. Or everybody is rolling from this deal to another. We had a deal recently that we bought in Jacksonville in March for $27 million it was a 288 unit multifamily complex. And we just sold it in December for $37.5 million. It was a huge profit, that was a 75%-100% return. But for me, we're 1030 wanting that in the next deal. And then there are some fees when we go to the next deal. There's some opportunity there.When deals sell, there are opportunities there. In some ways it's kind of feast or famine, but I feel like I'm investing in the business. I'm growing, I'm learning, and I'm covering my expenses. And I'm continuing to see my net worth grow. In multifamily in particular, you're doing these long term deals, you know that the money's there, you know it's coming, but you don't always see it right away. You're taking less up front, but still with these acquisition fees, they add up enough to at least cover the business expense and cover my living expenses, and they continue to grow my net worth.<a href="https://www.linkedin.com/in/bronson-hill-b4843910/" rel="noopener noreferrer"...

I'm going to be covering a topic request from one of our listeners "What happened when I landed in this country at 18 and how did I get to where I am today, 21 years later?"&nbsp;As you may know, I am originally from Brazil, and was very blessed to come here at 18. I landed in Silicon Valley and I still remember the first outing with my mom, she was explaining to me what the sign "Now Hiring" meant in Portuguese. I remember being so excited, because I saw "Now Hiring" everywhere that I went. In Brazil, we don't get these many opportunities. I got my first job at Mervyn's, and also worked at Blockbuster and Wells Fargo while going to college. After buying a music player with my first paycheck, I was pretty frugal and decided to start saving up. At Blockbuster, they absolutely loved me, I got promoted within one month of being there going from $7.25 an hour to $7.50 an hour. I got promoted to assistant store manager. And the reason that they loved me was that I was just working.Sign up for our newsletter at www.montecarlorei.com&nbsp;--- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

Join our 2022 goals calls here! Email us at [email protected] / Venmo @steffbold / or www.paypal.me/regoalsWhat are some things you need to keep in mind when leasing your property? Why should you put your prospective tenant's hat on? What are vacancy rates looking like today? Raphael Collazo, a retail real estate agent, shares his insights.You can read this entire interview here:&nbsp;https://bit.ly/3fhLRv1Investors and commercial leasing brokers have to put a hat on of our potential tenants, why don't we go into each step of your book and dive into some areas of it?First we talk about why you need commercial space in the first place. I've had a lot of conversations with people who like the fact of having a commercial space, it's a validation of them having made it, but in reality, they may not even need a commercial space. If you're a web designer, why do you need a commercial space, it's more of just fluff for you. On top of that, it may not be in your budget, your business may not be able to support you having a commercial space yet. Having that conversation early on is important so that you understand that maybe it's not the right time. And that's okay, it's actually better to know that now versus you getting into a commercial lease for three to five years, and then having that financial commitment for another three to five years.&nbsp;Then we review what you need to prepare before you get a commercial space, a lot of it is providing financials, if you're a newer business, or you haven't been around as much as some of these more established businesses, put the investor hat on, why would the landlord want to lease space to a potential business that doesn't have a track record of success, that's very risky for an investor. If there's a 2,000 square foot space, going for $2,000 a month, and you have $40,000 in reserves, your business is producing this, we can support this type of payment, it's getting ammo in the cartridge, so that as you go out and look for commercial space, you become a more attractive tenant to investors.Then we go through the process of narrowing down your list of criteria: how do you negotiate commercial leases, some of the provisions you need to keep in mind as you're looking at commercial spaces. And then at the end, we talk a little bit about once you get to the point of getting the lease signed, what are some of the build outs involved if you need a build out, and then we share some marketing strategies, and at the end, we have a call to action saying Now take the action, do it.And when they go ahead and do it, what are some of the things that they should be aware of with regards to negotiating that lease?As a landlord you want to pass along some of the main responsibilities over to the tenant, because you don't want to have to deal with getting calls for toilets and whatever else. That's part of the reason why you're investing in commercial real estate versus multifamily real estate. They want to be able to be a little bit more passive. Along with that, as a business owner, they don't consider the big ticket items, the landlord could pass along the responsibility for the furnace, the AC, if there's an elevator involved, maybe they're also passing along that responsibility. And you don't know that unless you read the lease.If you're in a multi tenant center, a lot of times you have to consider what's the competition in that center, because you don't want to be a liquor store, move into a multi tenant center, and then all of a sudden, next door, they allow another liquor store to move in. Have some form of exclusivity, and a sublease clause just in case.Raphael Collazo<a href="https://www.raphaelcollazo.com/" rel="noopener noreferrer"...

Join our 2022 goals calls here! Email us at [email protected] / Venmo @steffbold / or www.paypal.me/regoalsWhat questions should you ask a General Contractor (GC) when looking to hire one to build a property for you, renovate or expand it? How to even find general contractors for your projects? How should you pay them? Jeff Walston from Premise Construction will share his experience with us.You can read this entire interview here: https://bit.ly/3pZoZXvWhat are some of the major things that people should be aware of before hiring a general contractor?You need to know the right questions to ask. If you're in search for a general contractor, you can go to either your Better Business Bureau or your city commerce centers, they will know a great contractor because they've dealt with them in the past and know that they have a good track record, first and foremost. As far as questions to ask prior to starting the commercial projects:1. Making sure that they're fully licensed, fully insured, which is general liability, and workman's comp. Regardless if they are even going to be on the job site, you have to have that to protect everyone involved, it's very important.2. Their experience. If, for instance, you're hiring a contractor, and you want to do a restaurant build out, if they don't have any experience in the restaurant sector of commercial construction, maybe they have just been doing office buildings, you might have a few hiccups going through that whole process, because it's going to be a learning process for them. You need someone to know what they're doing in that specific sector.3. Once you figure out if they've done those projects, ask to see them, see if he can get references, ask around about their particular companies and do your research on them. It doesn't hurt to Google their company and Google their employees as well, I'd highly recommend that.What are some questions that people should be asking them to make a decision on which one to pick?If it's not down to price, if they're close in pricing, and you're just trying to figure out, who am I comfortable with, it's different for every circumstance, it's how you feel about the person that's representing the company. Some questions to consider are:- What expectations do you want them to have?- Can they meet your communication expectations?- Do you want daily updates? Do you want weekly updates? Do you want monthly updates?- Do you have project managers that are going to be managing our project daily?- Do you guys still perform work? Or do you subcontract everything out? And if so, how do you manage those subcontractors?- If they do have subcontractors that they're utilizing, you can ask them, How strong are your subcontractors? Do they show up on time? Are they managed well within their company? Get a feel of what they say about their subcontractors.- Is every subcontractor fully licensed and insured on your property?- You also want to see, from a liability standpoint, if they have any safety protocols, and if they do, what are those safety protocols, and maybe even see if you can get their safety protocol to see if everyone's following it. With any commercial property, the public safety for anyone involved in the project is vital for the people working there and the people utilizing the building later.- When problems arise, how do you handle it? Can you give me an example of the most...

Is location, location, location important in the metaverse? How can we develop properties in that world? What makes real estate valuable in the metaverse? How can you monetize it?You can read this entire interview here: https://bit.ly/33IcF5aLet's say Facebook decides to create their own universe, how are these pieces of land going to merge together? Or not? How will that work? What if one planet becomes more popular than another planet?That is the trillion dollar question. Are these going to be interoperable with each other? Is one going to dominate? That remains to be seen. We're still so early with this new world that nobody knows. Personally, I've bought virtual real estate in the Sandbox, Decentraland and Netvrk. And I'm looking to invest in virtual estate in up and coming metaverse projects as well. There's a saying, Spray and pray, I've kind of adopted that strategy, but not quite. I'm doing a lot of research into these projects, and I'm exploring them, but I am looking to get a lot of exposure to it. Some people compare it to being able to go back in time and buy a city block in Manhattan 100 years ago, what would that cost today? What would the return on that be worth today? It would be absolutely astronomical and, and incomprehensible. I think it's very possible that we're looking at a similar opportunity now, where in a decade or two decades, we look back, and we could have acquired a land plot in the Sandbox or in Decentraland for only $15k-20k. And now it's, millions of dollars. You can also purchase in game assets in the Sandbox and Decentraland. You can also create them, I believe. Roblox allows you to do something similar. I haven’t played it myself, but it might be something that some of your listeners are more familiar with, especially if they have young children that play Roblox. They provide you with tools to create your own anything in game assets, it could be a sword, a speedboat, a palm tree, a desk, a bed, pretty much anything that we have in the real world you could create it in the metaverse and you can sell it.Why is location important when you can literally click a button and be transported to the other side of the planet over there? Are people “walking” in these universes and is that why they will be able to see Snoop Dogg’s neighbor?Yes. There are various ways to move through these Metaverse projects, there are portals in some of them where you can teleport your avatar from one location to another. However, those are in specific locations only. So there are going to be large stretches of land between portals, where you’re going to have to find alternate means of moving around. The obvious and most common one would be walking or running. There are also roads, you can buy cars. I’m guessing you could move around the metaverse faster by purchasing a virtual car.Is there anything else that we haven’t covered that you think is important for our audience to know right now?I would just encourage everyone to start looking into this, do your research. It’s very easy to set up an account on the Sandbox and in Decentraland, create your own avatar, start exploring and start walking around. Look at their marketplaces. See what’s for sale, how much it costs, download a digital wallet, get a MetaMask, or Coinbase wallet, or a number of other wallets. But MetaMask is the most popular one. Start getting familiar with it, because this is the future. The opportunities are massive. We’re still super early in the space. And I think virtual real estate will be in very high demand over time. I personally think that it’ll be worth more than real world real estate at some point in the future.Paul’s Signal Group: <a href="https://bit.ly/3q0DRUh" rel="noopener noreferrer"...

What is the metaverse? Should you buy real estate in the metaverse? What does that even mean? What are some ways to monetize your property? Our metaverse expert will be enlightening us on what this is all about, and why it is important to at least start learning about it, and why it could be the next big thing in real estate.You can read this entire episode here: https://bit.ly/3E1p4xJWhat does that mean to own land that doesn’t exist, in a magical world?The ownership is via what’s called an NFT, which stands for non fungible token. It’s basically something that is digital, has scarcity, and is verifiably authentic on the blockchain. In addition to that, it’s also a way to verify ownership of a digital asset. Virtual land plots or parcels exist as entities on the blockchain, so your ownership is verifiable. That’s how it’s represented to the world. And the blockchain is a transparent public ledger. So everyone has visibility into it.But I’m still not understanding why I should buy a piece of land that doesn’t exist.There’s the appreciation component, because it exists as an NFT, you can also easily flip it on the blockchain. You can list it for sale on different entity marketplaces, the most popular and the largest being Opensea, kind of like the eBay of NFT’s.In addition to the appreciation, the fact that it’s easily transferable, or sellable, other reasons to purchase an own virtual real estate are that you can do much more with it in the metaverse than you can in the real world. For instance, you can advertise on it. You can advertise your own company, unlike the physical world, anyone in the world that has an internet connection is able to put eyes on those advertisements as they explore the metaverse and they happen upon your property and your billboards. The exposure opportunity is much higher. You can also rent out your property to, let’s say, people that want to host events on it. You can design and build any space, any environment that you can imagine. Unlike the real world where there are constraints.There are highly influential figures, celebrities, musicians that have bought up a lot of land in some of these Metaverse projects. Snoop Dogg is one example. He owns a massive section of land in the Sandbox. He has created what’s called the Snoop Verse. It’s basically a metaverse within the metaverse specific to Snoop Dogg, where he hosts live concerts where you can watch them as your avatar with other avatars and get access to other exclusive opportunities like NFT drops, play in the Snoop Dogg casino, check out his 200 car virtual car collection, get higher staking rewards on your tokens. Parcels adjacent to Snoop’s property, I think there is a string of three adjacent land parcels, if you take the minimum price $13,000 times three, you’d get $39,000. But those sold for $450,000, more than 10x the minimum price for land parcel in the Sandbox because of the proximity to this highly influential celebrity.Why is it worth 10x the price of minimum real estate values? Because Snoop is going to attract so much traffic to his land area, you are therefore going to get a lot more traffic to your plot of land, and so you’re going to get more eyes on it. Therefore, the advertising potential is higher, or the number of interactions you can expect on your property are much higher. You can also create games, you can rent it out, you can advertise on it. There’s no overhead costs, no insurance, no decay, no management. You don't need to clean the sheets. You don't need to vacuum it.Paul’s Signal Group: https://bit.ly/3q0DRUhYoutube: <a...

What are some asset classes that I think could potentially be very successful in the next decade with regards to real estate investing?You can read this entire episode here: https://bit.ly/3Ibdpj2I have recently been pondering about all of the missed opportunities that came right in front of my face a decade ago. Things like investing in Google and Facebook, I actually met the founder of Coinbase nine years ago, who told me that he thought that there was a huge opportunity in Bitcoin. Bitcoin was worth $13.30 then, if I had put $10,000 into it, it would have been worth $45 million today. I told my friends to buy Amazon stock when it was $250 a share. I test drove the very first Tesla Roadster 11 years ago, and never thought of investing in Tesla.As a fully grown responsible adult that has some money to invest today, I was pondering recently, what is right now right before my eyes today, that could be huge tomorrow, just like all of these companies that I just mentioned. These things can be controversial, and you might not like it, and you may think is the stupidest thing ever, or you may simply disagree with it. But it's just what it is. And you can either learn about it, or you can try to fight it.CannabisThe first thing that I think could be a great investment is in the cannabis space. Whether you rent an industrial building to a cannabis manufacturer or deliverer or whatever their business may be, today, cannabis is only legally allowed in a handful of states. Trends, whether you like them or not, start on the coasts. Cannabis has been legalized in a few states on the coasts, eventually it will be legalized on a federal level. And those who are ahead of the curve will benefit from it, and that is happening sooner than you think. Cannabis tenants tend to pay significantly more for renting the property because of many factors that are related to it not being federally legal. Once it becomes federally legalized, and you end up having a cap rate of, say, 7% when these industrial buildings with these cannabis tenants that are paying you top dollars, you automatically add value to your property.MetaverseIn the metaverse you are basically buying a "piece of real estate" in this fake world. I am looking at interviewing people that are experts in this topic, so we can all be enlightened and really learn what it means to invest in the metaverse with regards to real estate. What I learned so far is that there are companies already buying land in this 3D world that they will be able to build whatever they want. It can be a hotel, a golf course, an art gallery, a comedy show place, a sports stadium, a music stadium, and it can also be a game. It can basically be anything that the person that bought it would like to create in that world. They can charge people for admission, or a membership fee for example. And that's one of the ways to monetize it.EnvironmentalThe last example in this series is coming back to the physical world, the more realistic world. As we all know by now, the government creates tax incentives in order to incentivize a certain behavior that they want you to act upon. Like we have mentioned before they have tax incentives for real estate investors because the government does not want to build and maintain buildings. That is why real estate investors have these tax incentives. Today's incentives are in the environmental space. They are in wind farming, carbon capturing, clean energy, and a few other things that you might want to learn about.What do you think could be the next huge opportunity in real estate investing? Let me know below:<a href="https://www.linkedin.com/in/steffbold/" rel="noopener noreferrer"...

Today we will review a real property example from a real potential buyer who wants to get into commercial real estate investing and prefers a NNN leased property. Are these investments worth it at a 5% Cap rate? Let's find out.Tell us a little bit about you.I'm in the Dallas Fort Worth metroplex area in Texas, it's a very rapidly growing area in the suburbs and since there aren't many opportunities within the metroplex, they're rare to come by. I'm a nurse practitioner, I work full time, and am looking to get into commercial real estate investing, specifically NNN leases, since it's a little bit more passive opportunity and I don't have to worry about, as they say, termites, toilets and taxes. So that helps me out in that sense. I've been doing a little bit of research and came across a potentially good opportunity in the Metroplex area, and has a very well regarded corporate tenant.Unfortunately, the cap rate is between 4.5 to 5% and this will be my very first investment. I'm looking to certainly grow my portfolio, and this is a true NNN, where everything is taken care of. I feel like it's great for me to learn from it, and not get too overwhelmed, just starting off. But my hesitancy with this is, since the return is a little bit lower, I'm concerned about what interest rate I would get from the banks, and if I'd be breaking even. I wanted to reach out to and see if you have any guidance, and what you would recommend for someone in my position who is a novice and strictly coming in with a foot in the door.I can totally understand how you are torn because, from what I understand, you're very busy with work and family, so there isn't a ton of time to manage properties and deal with leases and all of that. But at the same time, the cap rate is pretty low. I'm going to ask you a few questions, and if you don't know the answer we'll just go ask the broker at some point and take it from there. What is the downpayment looking like right now?It'll be at least 20%, the price is a little over $900k, and the lease doesn't expire for another 7-8 years. There are three, five year option renewals after that lease is up in about eight years.Are these five year options? Correct. Each option is five years.So you have potentially another 15 years on top of the eight years, correct? Are there yearly rent increases, or is the rent increasing every five years?The lease commencement was in August of 2009, in the years one through five there was no increase, but then after that, they've had a 6% increase. And then after that, it's going to be 8% increase every time there's a renewal.About 1.5% a year, increase, give and take. When does that 8% kick in?It doesn't kick in until after this 7-8 years is up.So you're going to have that 5% cap for the next seven years. And then at that point, they can either leave or renew at an 8% increase. And this is the one that is a true NNN lease, you're not taking care of anything. Correct. It's mailbox money, as they call it.If there is any money left.That's a good point. Exactly.One of the super critical things to take a look at in the lease is, I don't know about Texas, but in California the taxes can be very low if they have owned the property for X number of years. And then once you purchase it at this new price, the taxes will go up significantly. I don't know how it is in Texas, but I would definitely make sure that in the lease, if it's the case for Texas, they are okay with any new tax increase, regardless. A lot of times these major tenants will negotiate a maximum tax increase of X percent. So that's something that is your number one priority to check...

After working in the industry for 30 years, and managing 5M square feet of assets worth $1.5B, what are the best pieces of advice out there? Chris Rising, co-founder of Rising Realty Partners, will share his extensive list of lessons learned.You can read this entire interview here: https://bit.ly/3qs9CY8What are some of the scariest things besides COVID that you have dealt with? And how did you get out of them?I do have a couple of stories but one that sticks out, it still makes me want to throw up. We were buying an asset in Pasadena, it was in office, it was after the GFC, and I got introduced to a tech celebrity who was a wonderful person, I like him a lot. He made a ton of money twice but had never been in real estate. He had hired someone to do his real estate because he wanted to diversify. We found his project that we were buying, it was a bit distressed, we were bringing in at the time a competitor to We Work, so we were going to have some leasing and the whole deal made a lot of sense. I talked to him on the phone and I said, Look, we've been underwriting this, our money goes non refundable on Friday, but if you're not there, we're not going to go non refundable. And he said, Yeah, we're going to, I think, yes. It was mumbling "yes" and I said, okay, good. I remember calling the broker and saying, let's let the money go non refundable. It was a million dollar deposit. Literally about an hour after I called the broker and the escrow, I get a call from one of this guy's representative saying, We're not 100% sold, we're going to want to look at this deal longer. I said, no, no, no, that's not how real estate works, I just relied on a commitment from your boss, and I just put a million dollars at risk. He said, Oh, what are you talking about? You can't do that on that. I had a good 24 hours before the principal called me and said, Chris, I apologize, I didn't realize that, of course I'll honor what I'm going to do.What are the top three biggest lessons learned in your career?1. The smartest person in the world is asking the most questions. And those questions sometimes come across as dumb questions. When I was young, I thought asking questions was annoying, and I shouldn't have a place for that, I should just be there and take my notes. What I realized is that people that aren't asking questions are not engaged, and probably not someone I want to do business with.2. You don't have to be a jerk in business. However, you also have to understand that business isn't personal. That took me a long time. We're a family company, I want everything to be great. But as long as you treat people with respect, and you're ethical, and honest, that can happen in business and it's not personal, deals can blow up. I'm always amazed how people don't realize that a Pro Forma is just a guess. We don't have crystal balls. We try to make it as educated as possible, but recognizing that it's not personal allows you to sleep at night a little bit better3. No matter how important all your business seems, and all that stuff, it's all very fleeting. If you're not enjoying your family, your life, it's a hard road to get to your 50s and realize that you don't have a great family, and you don't have a great thing. My father is 80 years old now, he pretty much moved on from the business. And I think of things that were so important 15 years ago, and they're just not now. The people that were important aren't in the business anymore.Chris RisingThe Real Market With Chris Rising<a href="https://twitter.com/chrisrising" rel="noopener noreferrer"...

How to manage a huge economic hit on your main asset class? How to buy and add value to properties today? Christopher Rising, co-founder of Rising Realty Partners, shares his expertise with us.You can read this entire interview here: https://bit.ly/3GMTaaFHow did you deal with 1.5 yrs of lockdown (so far) when your main asset class is office in the Los Angeles area?What did we do from day one was, we did try to work with our tenants. When someone came to us or someone chose not to pay the rent, the first thing we would say was, give us your financials, let’s be a partner here, and let us see. You kind of smoke some people out when you do that, because I can’t tell you how many law firms felt like a lease was a one sided obligation, and they didn’t have to pay if they didn’t want to. But that’s not true. We’d start with the, Hey, show us the books. Then we went to have you applied for a PPP loan, because those were specifically designed to pay salaries and to pay rent. And then if they didn’t do that, we said, have you gone to business insurance, but we knew that they weren’t fronting any of this. But if someone worked and tried to solve a problem, we worked with them. And in fact, I would say that every one of our retail tenants, our office building, I think to a tee, we are working out deals with them now, because most of them haven’t paid rent in two years, so that we can keep them, but they also need to do things like extend their term or something. We’re not trying to be punitive, and say, you owe us late rent. We’re just trying to almost close our eyes and pretend the last two years didn’t happen. We got through it. We paid our mortgages and all that. But in return, you have to give us a little more term on your leases. But it still hasn’t been figured out.&nbsp;I think that on the multifamily side, there are a lot of problems that are hidden right now. Because you can’t evict people, all you can do is served with a notice to pay. And I think when all of this gets lifted, you’re going to see a lot of residential tenants whose credit gets really destroyed.I would love to hear about your last acquisition, how did you analyze it find value add, and why did you end up purchasing it?I’ll talk about the last one, which was in Las Vegas, we’ve taken our industrial strategy and really focused on something called multi-tenant light industrial. I think when people talk about industrial today, they sometimes forget, there’s different forms of industrial real estate, the one that is trading at unbelievably low cap rates are the big box, logistics based industrial buildings. You think of a big Amazon center or distribution center, or just anybody who’s moving product, those are trading at very low cap rates are very hard to buy, because you have to buy them in scale. You’re not really selling one offs, it’s usually portfolios. But people are really buying the cash flow stream and the quality of that credit. So that is not an area we have participated in, even though my father when he was in development, that’s what they did. We’ve taken a different approach and focused on this multi-tenant light industrial product that really isn’t getting built much anymore, especially in major CBDs. It’s not getting built, because it’s hard to get entitled, if you’re going to build something in industrial, you’d prefer to build the big box industrial, it costs less, you get more for your money.The Real Market With Chris Risingtwitter.com/chrisrising<a...

How should you raise capital for your first real estate deal? What is the lifetime value of your investors? Should you get investment commitments or a deal first? Dave Dubeau has been investing in real estate since 2003 and shares his insights.You can read this entire episode here: https://bit.ly/3jKirbMLet's say we're ready to do a first raise. I have a list I have relationships, people know what I have been doing. What is the first thing that I should do?The first step is, in my opinion, to create a target group of prospective investors that you're going to really focus in on. If you don't have a track record with raising capital yet, who is going to invest with you? A big mistake I see a lot of people making is they go out to the general public, anybody with a pulse and a checkbook, they think could be a good prospective investor. For somebody to start investing with you, they need to know you, like you, trust you with their money. If you're going out to strangers, they don't know you, don't like you, they certainly do not trust you with their money. That's a very difficult hurdle to overcome off the get go.Should people ask how much they would be interested in investing before or after getting a property under contract?The chicken in the egg question. My personal opinion is, let's get some soft commitments from prospective investors first. Let's get our investor ducks in a row and then let's go looking for properties. Because when you have a deal on the go, yes, that's a good motivator, but the challenge is, you're desperate. You need the cash for this deal, and that desperation, whether you want it or not is going to ooze out of every pore in your body. I far prefer to have these capital conversations first, and get people to even sign off on an expression of interest. That's very powerful. It's not a legally binding document, it just says something like, I am willing and able to invest the sum up to $100,000 with Steff, in one of her upcoming real estate deals anytime within the next six months. Sign off on that, put the date on it, it's still not a guarantee, but that person is much more likely to invest with you when you've a deal than if they just said, Yes, I'm interested.You talk about the lifetime value of an investor, can you elaborate on that? A lot of people don't think about that, and it's very important to know.Let's pretend we're looking at one of your self storage facilities. The purchase price is $1.5M, you need to raise $500,000 and let's say you raise it in five $100,000 chunks. If I come into that deal with $150,000, and that gets me a quarter of the investor pool, then the question would be, how much is that asset going to be worth to Steff over the length of time that you're going to hold? Let's use a 10 year time frame just to have a book end. Over 10 years, what do you think the total gross profit on that property is going to be, the increased value in the property, the cash flow over that time, the mortgage pay down, all of these things? Let's say $2 million and let's say they get half and you get half. That means that deal is worth $1 million to Steff over that 10 year timeframe.You divide that by the number of investors, five, so that's $200,000. That's what that investor is worth to you for that deal. Now, are they only going to invest in one deal with you? Let's say they invest in four deals, if the average profit that they're worth to you is $200,000 and now they invest in four deals. That's $800,000. Now, let's say they're happy with the investments they're doing with you, they will refer other investors to you, and that person would be worth something similar. That's the math that everybody should be thinking about.---...

What should you look for in an industrial property that you are looking at buying? What are some of the strategies to make deals a win win for the buyer as well as the seller? Darren Smith, Principal of Solid Growth Properties LLC will share his industrial investing insights.You can read this entire episode here: https://bit.ly/30jr5HbWhat do you look for in a property that you decide to buy?I'm looking for a property that is in an area that I know that if it goes vacant, I can get it rented without a ton of trouble. And that be like what are my rates on the property? I need to know, how much is the lease on this property? Let's say I'm buying one that already has a tenant in there, and rent is $8/sf plus NNN. If the market rate in that area is $7/sf plus NNN, I'm a little bit nervous, because if that tenant doesn't renew in a couple years, if I paid full price for it, I'm paying above market rates because the market doesn't bear that. But if I'm getting $8/sf plus NNN, but market in that area can bare $10, I'm really comfortable with that.What strategies that you use to make some of these deals a win win?There are so many creative ways of putting deals together, you have to go into the conversation with an open mind with letting the seller know you're there to figure out the best solution for them. I'll tell you a funny thing that happened in the last couple of weeks. My assistant mailed out several months worth of marketing for me on the same day, and I have had more seller conversations in the past couple of weeks than the rest of the year combined. What that has given me is this, it has helped me with my skills of talking with sellers. I've been doing it for years, but you can always improve. Two, I find the things that I keep saying over and over to different sellers. One of the things I keep saying is, Hey, you know what, I may not be the best fit to buy your property, to be honest, I buy a lot of properties, but I definitely don't buy everyone. If you can just let me ask you a couple of questions about the property, to understand that situation and then about your situation, what you're trying to accomplish, what are you hoping to get out of the sale?What has been your best and worst industrial investment so far and why?I'll start with my worst one on a flip that I tried, I'm actually still involved with this, we're at a liquidation stage right now, I'm not sure how much I'm going to lose on this but it's probably going to be a six figure number. I didn't do any homework on this one. It was a flip that I bought sight unseen. It's across the country, I've never been to that town, I was doing as a favor for a friend because he got involved with it. I sent my one of my employees over and he said, Oh yes, we can do this, we can make it happen.As far as my best deal, the seller of this property had been trying to sell this property for a couple of years, he was getting close to the the end of the lease with the Army Corps of Engineers. It was a government tenant that was in the building, it was in an area that's a bit more remote. He'd been trying to sell this property and couldn't do it, it was listed with a broker. I sat down and talked to him. I said, what exactly is it that you need? What are you trying to accomplish? And he said, this is the number I absolutely have to have, and I have to have that because of these things. I said, Okay, great, we can do that. How much of that do you need in cash at closing, he told me the number, it was less than 70% of what the sale price was. We were able to work out a deal where I got a 70% bank loan on that property, it took about 15 different banks, but he held

What is the state of industrial investing today? What are some techniques you can use to buy industrial properties? Darren Smith, Principal of Solid Growth Properties shares his tips.You can read this entire episode here: https://bit.ly/3FrseNdWhy did you decide to focus on industrial? What is the state of that asset class today?Like most investors out there, I started in the single family and dabbled in multifamily and mobile home parks. I actually got hurt really badly in mobile home parks during the last crash. I definitely took some lumps, made some money, so I was able to kind of recover but I’ve tried a lot of different things. The usual transition from people who are doing single family houses, flipping, wholesaling, rentals is to go into multifamily, maybe they get a duplex or a fourplex. And then they scale up from there into larger and larger number of units. I have several good friends who own hundreds and in some cases 1000’s of units in multifamily and are doing it very successfully. What I learned from watching them, though, that it is ultra competitive, my friends are really sharp people that are working really hard. They got really creative and they put these deals together with syndications on cap rates that I would not be comfortable doing. And I didn’t know if I could compete in that market. They’re just better than me.You have a different and maybe unique approach to find industrial properties, please tell us a little bit about that.All I did was I took the things that other people taught me on the single family side, and I just applied them to industrial real estate. I take those things, and I step them up to a higher level of quality. If you’re marketing to houses, maybe you’ll have someone from South America doing your cold calling, maybe you’ll mail them a postcard or more generic type things. Whenever I’m dealing with the commercial side, having that level of sophistication as high as you possibly can when you’re interacting with these people is important, to show your credibility.Are you finding properties only through mailers today?That is the vast majority of properties that I come across and that I’m talking with, direct marketing. That said, I do love working with brokers, two of my favorite properties came from brokers.A lot of times brokers are very protective of speaking to the sellers directly, how do you go about that?I don't go around it, I really want to work with these brokers. Just as if I'm talking with a seller, I always want to try and find out what are they trying to accomplish? What is in the seller's best interest? How do I help them? I have that same conversation with the broker, Hey, Mr. broker, Mrs. broker, I bought a lot of properties, this is kind of how I work, this is what I like to do and what I like to accomplish, what I found has been really successful in the past so that I can get you your full commission as soon as possible is if we could all just sit down and see if there's something that we could work out. I don't know if I've ever had a situation where I talked to a broker and I said, Can you go ask the seller if they're open to terms? That's a DOA conversation. The deal is dead because the first thing people say is no, I want all cash, top dollar. Well, sometimes that property may sit on the market for six months, they may want all cash top dollar, but what if maybe I could come to them and say, What if I paid you top dollar, but you held a 20% second against the property after the bank. So you're going to get 70% from the bank, you're going to get 10% of my cash, and you're going to hold 20% as a second. That...

What are the tax benefits of investing in real estate? Ted Lanzaro, CPA and real estate investor shares his knowledge around tax planning while investing in real estate.You can read this entire interview here: https://bit.ly/2Wg8nyyWhat are some of the benefits of investing in real estate from a tax perspective?The biggest tax benefit of investing in real estate is that you can make net income from your investment, you get your rental income, you pay your insurance, mortgage interest, real estate tax, your other expenses, and you have money leftover. You can then apply what's called depreciation against the property. Depreciation is the rational allocation of the purchase price of the property that you can then deduct on an annual basis. Typically, residential apartment buildings depreciate over 27.5 years. For example, you pay $2,750,000 for an apartment building, you'll get $100,000 of depreciation expensive a year, which means that I could have $100,000 of net cash flow from that building offset the depreciation and have zero taxable income. But I still have $100,000 in my bank account that I get to keep that I don't have to pay taxes on.The other benefit is that you can leverage your investment with debt. If I buy stocks, for example, in the stock market, and I want to buy $20,000 worth of stocks, for $20,000 I buy $20,000 worth of stocks. If I have $20,000 to buy real estate I can buy a $100,000 property, you get a mortgage for the other $80,000. That gives me the ability to get a return on investment that is typically higher than what I could earn in the market, combine that with the fact that I'm not paying any taxes on it, and it's an even higher return on investment.When real estate professionals are able to deduct everything and pay no tax, there are some drawbacks. Can you elaborate on what some of those drawbacks can be?The primary one is recapture when they sell the property. That guy for example, when he goes to sell that property, he has $400,000 of recapture tax. It's a deferral, it's not an avoidance. With cost segregation you make money on the time value of money, because you're going to pay that money back when you sell the property eventually, unless you do a 1031 exchange. In this scenario, I've already warned him that somewhere down the road, when you sell the property, there's going to be a big capital gain, because your cost basis is a lot lower.And that's something that I'm talking with people all the time about, because everybody has been using bonus depreciation and taking huge offsets against their earned income, the ones that qualify as real estate professionals, and I keep telling them, when you sell that property, you will have to pay those taxes. Also, that bonus depreciation is actually set to phase out. Starting in 2023, it goes down from 100% bonus depreciation to 80%, then 60% in 2024, 40% in 2025, 20% in 2026 and in 2027 it's gone. The strategy now if you sell properties is I'll just go buy another, if I can't do a 1031 exchange, I'll go buy another property and just get new cost segregation and wipe out the gain on the property. That strategy has two more years of useful life, and then it's going to become a lot less valuable, and then it's going to be gone.What about the fact that they might not be able to get a personal loan?That's a really good point. I was just telling someone this exact same scenario, which is good tax strategy and good asset protection don't always correspond with good finance. Sometimes you can take so many tax deductions that you can't get a loan. Typically, banks will add back depreciation, it's not a cash flow issue, it's an allocation of the purchase price.Ted Lanzaro(203)...

Are short term rentals a good asset class to invest in? Tim Hubbard will share all the knowledge he has acquired over the last 10 years investing in real estate, and managing thousands of bookings online since then.You can read this entire interview here: https://bit.ly/3kcZ8bCWhat are some of the benefits of investing in short term rentals?There are quite a lot and there are some that I just realized recently, like eviction moratoriums, for example. That was never a thing with short term rentals because if someone is staying in our properties less than 30 days, normally they don't have any tenant rights. So we had quite a lot of flexibility there. Along these inflation lines, all the money that we printed to help the economy with everything that's been going on, we've had a lot of inflation, and that's one of the reasons that rents are going up. With short term rentals, we can change our rents every day. We don't get locked into a year lease and under-rent our properties, we can use tools, and there are tools to do all this. We can set up a tool that'll change our price everyday.The biggest reason or advantage that I've got into short term rentals is literally the fact that some of my properties making like five, eight times the amount of rent I was making with a traditional long term rental, like a single family home. Back in the day, if I was thinking that I want X amount of dollars a month to become financially free through properties, I could literally divide that number by five times. And that's the amount of short term rentals I need to accomplish the same amount of money. That was the main reason, the biggest advantage, coming down in income.How do you choose a market within this asset class?I choose the market as I have always chosen markets, based on the fundamentals, a place where people are moving to and not moving away from, where the employment is diverse, there's not just one industry, and it's landlord friendly. And that's a big thing, because aside from all the traditional fundamentals we look for, for a good real estate market, we have to take it a little further if we're looking at finding properties to do short term rentals. And the big one is regulations. But before that, I'm looking for places that has good fundamentals, where people are moving to, and there's population growth. The Sunbelt areas in the US have been growing a lot. So I think those are good areas. But then the landlord friendly one is a big one. And I found that there's a pretty good correlation between landlord friendly cities or states and short term rental regulations. If the city's very landlord friendly, then it's probably a little more likely that they're going to be more friendly towards short term rentals as well.What are some of the scariest things about short term rentals?The scariest thing that someone's going to trash my house and have a party. And that's possible, that could happen. But there are lots of ways to prevent that. There are lots of tools now like noise sensors, that can notify you automatically if the noise goes above a certain level.Another thing that might be scary is, when you first start, if you're taking a long term rental, for example, and you're going to turn into a short term one, you wonder, How good is this actually going to do? How do I forecast occupancy and things like that? What if I put all this furniture in there, and it's vacant all year? It can be a big investment to put all the furniture in there.Tim Hubbardwww.restmethods.com<a...

Sometimes you come across a property that has good potential, that you can add a lot of value, but it’s not a couple of hours away, it’s couple of flights away. I believe that today, with technology, we all can manage and operate properties remotely and I’ll be sharing with you what I have done to make things easier.You can read this entire episode here: https://bit.ly/3n6mOQLInstall Nest cameras on all properties, both outside and inside the building, I can see what is happening at the properties at anytime, I can even talk to people (I’ve never done that before LOL) through the cameras. It notifies me if there’s any movement and you can change the settings to notify you as little or as much as you’d like.Install an alarm that notifies me when each employee arms and disarms any property. I get a notification on my phone and email. This helps my virtual assistant to match employee timesheets if we ever think there’s a discrepancy. I can also arm and disarm all of the properties from my phone.For the car washes I also installed a coin counter, prior to purchasing it we had no idea how much money was coming in, now I can see exactly how many quarters are coming in each day. That way when our employee collects the money, we can check against that week’s report and the bank deposits.Get a Grasshopper account, grasshopper.com is phone over the internet, you can download their app on your phone, your employees can download it on their phones and desktops as well and take the calls. It helps keep all communication in one place, from texts to call forwarding, all while showing only your business number to them.Phone Apps / Final Tips1. Everything that can be on autopay is on autopay, all the electricity, gas, internet. I know that some people don’t like that because some vendors may increase prices without notifying you, but when we do our accounting and bookkeeping we check all of that, so autopay makes it very worth it because it saves us a lot of time.Make sure to have all of these documents on your phone as well, if they’re on Google Drive, download the Google Drive App on your phone, if they’re on Dropbox, make sure to have that app too. It will make your life a lot easier,2. Always keep track of your money, even if you delegate all of that out, I have heard many horror stories from multi millionaires that started delegating that part out and let go of triple checking their numbers, and their people started to take advantage and they had money stolen by actual employees.3. Keep your employees accountable, have them send you a list of things that got done that day, have daily or weekly meetings with them, find out what’s working, what’s not working, where’s the bottleneck, what do they need help with.4. Download your business credit card apps on your phone, that way you will get notified every time something is charged to your business account, not that you’ll be checking every single transaction, but you will be asking your employee “What is this charge about” once in a while so that they know that you are checking.5. Download Venmo and Cash App so you can easily pay vendors and issue refunds if needed, instead of mailing checks.6. My favorite places to find talent are upwork.com, fiverr.com and thumbtack.com. Thumbtack is mostly for vendors like lawn mowers, cleaners, etc, and just like the first two, you can find the...

What are NNN leases, what are the benefits, and what's the best way to find national tenants? Adam Carswell answers all of those questions, he has been working on NNN leases for over five years and shares his insights.You can read this entire interview here: https://bit.ly/2XGgCV5What are Net leases?Net lease or NNN lease to put it simply, there's no toilets, no taxes, and no termites. I find it really interesting how this particular asset class gets overlooked in the commercial real estate investment space. I think it's for a few reasons, one, there really isn't just a lot of information out there on it. And then a lot of these assets are probably a little bit lower on the cap rate side of things, if you're looking for major value add projects, where you come in and make a ton on renovating the asset, then it might not be your cup of tea, but from a cash flow and stability perspective, I don't know if there are many other commercial real estate assets that exist that are as dependable as NNN leases. Some examples are Walgreens, CVS, McDonald's, Starbucks, Advanced Autoparts, Chick-fil-A, and most national brands, typically called national tenants. So you have the amazing credit backing with a lot of these tenants and wondering whether or not someone's going to pay you on a monthly basis normally is not a concern. This is another reason why, especially if you're looking for stability and cash flow, you want to check in the mail every month from Wendy's, that's it.How do people typically approach a national tenant, especially if they're just starting out and they don't have experience with national tenants?The biggest hack in meeting the tenants and the reps that you want to work with is the networking piece. So how do you go about networking? From my observation in working with Michael, who's been in the space for close to 35 years now, the relationships are very key. If there's any sector in the world of business that tends to move slow as far as adopting technology and new ways of thinking, real estate is a slow moving beast. With that being said, you might not like it, but if you want to become sophisticated in this space very quickly, you have to start cultivating relationships with the old guys. You want the people who understand retail and have 30 plus years of experience. And a lot of them didn't have Rich Dad Poor Dad to introduce them to the real estate space, and they know all the people.One place that Michael brought me to was Vegas a few years ago to ICSC, the International Council of Shopping Centers annual conference, if you are thinking about getting into the retail sector, I highly recommend getting into that network, that's where all the cool kids hang out in the retail space. Going to that conference in Vegas really opened my eyes because it aggregated the entire US and international retail space into one massive networking event. You can meet reps from BP, McDonald's, all the fast food places, Walmart, and brokers from everywhere, you always want to have relationships with brokers even though people can say brokers are annoying, you still want to be friends with them.One company that I worked for once upon a time was Sherwin Williams. Those properties are also NNN lease deals and I've relationships with the Sherwin reps now because of that. It comes down to relationships. But if you can zone in on the actual brand reps and become friends with them, I think that could probably benefit you a little bit more than just becoming friends with brokers.Adam Carswellwww.carswell.ioNothing But Net Podcast: <a...

It is 100% possible to purchase commercial real estate with no money down, Cody Davis, a 21-Year-Old shares how he already purchased 30 units with no money of his own, with seller financing, following up, and asking for it.Read the entire interview here: https://bit.ly/3iEbGIrHow much money did you use to buy your properties?I had no money of my own in the deals and I had to come up with money. The zero down isn't quite true, because it takes money but doesn't have to be your money. So I had to come up with $125,000 for each twelveplex, that's 250k. And $90,000 for the sixplex, they were all seller financed. So they were lower down payments, but it was no money on my own.How did you convince the seller to carry the first loan?As far as convincing the seller, this is the first time I’ve ever worked with him and ever spoken to him, so I had to learn about his story. I met up with him and I asked him how he got started. He started out with a sixplex, it was his very first property. He bought it for $90,000 around 2004. But he bought it with 10% down, that was $9,000, he traded nine grand for a sixplex, he lived in one of the units, the owner financed for him. He wanted to buy the land next to it, but he didn’t have the $2,000 to buy it. This was all of his money. And today, he has a handful of properties. He is doing brand new developments, single family communities, apartment buildings.I just went through and asked him how he did it, what he started with, what his thoughts were on how to get started. He said, you need to find someone who will seller finance you a property. I said, Okay, will you seller finance me this property? He said, Sure.How did you find the $125,000 second loan?I asked the owner of the firm, I got this opportunity, can you help me out? We looked at the numbers and he said, Yes, it makes sense, let’s do it. He helped fund it. It’s about asking for help, it doesn’t have to be a one person show. You don’t have to be self made because you’re going to grow based off of your interactions with others.What were some of the things that people said no to? And how were you able to overcome that?I had a lot of help starting out. But the objections that I got, and it’s good to know the objections, such as you haven’t done this before, you’re young, you’ve never seen this much money in your life. Those are some of the objections. I am a Grant Cardone guy, I love to study from him. That’s just a complaint. They’re complaining that they didn’t start this young, in my mind. And so I had to flip it, I said, that’s the reason we should do this, because if you were in this position, you would want the same opportunity. Now, this is how I’m going to protect your money. Once the property stabilized, it’s worth $1M. To back that up, I got an offer and I’m going to be selling this twelveplex. As long as things move forward, we’re going to close. The financials are all good with the bank and I helped them sell a couple properties, so they’re 1031 exchanging it, but I got the value up to where I projected it would be. If they had to foreclose on me, I just presented as The property has $560,000 in debt with the seller, if you foreclose on me, you’re getting a million dollar property with a $560k debt for $125,000 in one year, that’s a good ROI, so let’s do this, just like the sixplex I purchased.Sign up for our newsletter here: www.montecarlorei.comCody DavisInstagram: <a href="https://www.instagram.com/codyd2020/"...

What are some good numbers to syndicate? Do you need experience? How would you go about it? We are answering questions from one of our podcast listeners about syndications and Billy Keels, a long distance real estate syndicator and investor, who syndicates US properties from Barcelona, Spain answers her questions.You can read this entire interview here: https://bit.ly/3ynC4voWhen it comes to the number of partners in a limited partnership, how many is too many?There are two questions that you want to ask yourself. Number one, who is it that you want to serve through the syndication? And number two, what type of systems do you currently have in place, because that's going to have a direct impact on the number of partners that you have. You want to be able to have the right people that you're serving. Sometimes you may want to serve people that are only accredited investors. And that is going to make sure that you're serving someone with a specific type of syndication tool. If you want to be able to serve other people that are more sophisticated investors, then you will want to use a different type of tool, you have specific names. And I know you've talked a lot about 506(c) for accredited investors or a 506(b) for sophisticated and accredited investors.I am in my mid 20's, and experienced only on the brokerage side of commercial real estate. However, I am taking a commercial real estate financial modeling course to thoroughly understand the numbers, what kinds of qualities, experiences, achievements would make you feel confident enough to invest your money with someone like me, and is direct investment experience an absolute must?It sounds like you already have lots of experience, even in your mid 20's! I think this is such an individual question. You want to ask yourself what is the right experience for the individual for the person? At the end of the day, each one of us are very different. And we need to make sure that you as a syndicator and your team, you need to be able to understand exactly what each potential investor is looking for. As far as having direct investment experience, I'm more interested in her and her team. I want to understand if the team that she is representing has the experience on that asset class. It's not just about the individual, it's more about the team and their overall experience, to make sure that if I'm investing time, energy, capital, that the team will give me as the investor the highest probability of getting the return on whatever it is that I'm looking for. And that could be an ROI, it could be tax benefits, or whatever the case may be.When you consider your most successful deals, what was different?As a syndicator, it was being able to spend the appropriate time with each of the investors getting a very clear understanding of what each of the motivators were for the individuals that were part of the syndication. And being able to help them get a very clear picture of not just what the project was, meaning buying a certain asset. But what were the benefits and the impact, that that particular investment of their time, energy and capital was going to return not only to them, but also to the communities in which they were investing. And the impact that it was going to make on the syndication's team.And some basic things like making sure that there's a return on their trust and energy, which means that the transfer, the ACH, or the checks were arriving to them on time, so that they advocate to others about the positive experience, and invest again.Join our Goals accountability calls here:...

What should you include in your pro-forma when doing a real estate development? Renat Yusufov, Managing Partner at&nbsp;Bullpen&nbsp;shares his detailed pro-forma, how should you think about it, and why. He also shares his top asset classes and markets to be in.Watch this deep dive here: https://bit.ly/3y9SHukWatch Part 1 here: https://bit.ly/3xWrZ8pRead this entire interview here: https://bit.ly/3wRbFViWe have a non pro-forma here for stabilization. This is where it's dealer's choice, being an office product, being multi tenanted, chances are you're going to go through Argus software, you plug in your assumptions, you plug in your rent roll or your expected rent roll, and it basically does the pro-forma for you. Some people have an aversion to it, because it doesn't allow for more flexibility, however, it does allow for more detail, it's the double edged sword. My personal opinion, the more complex your office product is, meaning the more tenants you have, the more nuance you have about leasing, and staggering timelines, the more likely you prefer to go with Argus. It's a little more painful in terms of editing on the fly. But the flip side of it is that it's definitely more accurate than anything you would probably be able to build an Excel. This is a summary of where you expect to land. And a lot of this is actually pulling from Argus, Argus lets you pull in Excel tabs basically as outputs so you can integrate it back into your Excel on both the assumptions, the leasing summary, and the base rent.And you can change all of these numbers based on various specific locations of each property?Exactly. And that goes back to your building, and the south side of a certain city and state, you'll talk to the brokers who have experience there, and they'll tell you what the rents will be, they'll tell you how long it'll be on the market before you'll find a tenant, what the terms are, and the big terms being free rent, TILC, so that's tenant improvement leasing commissions, and the time it'll take to find a tenant, as well as the credit. This is really a summary. You'll have different audiences for this model, it's better to have it here than for them to have to run around the tab looking for the specific month, when you stabilize, and what the rent looks like then. I show it as a total dollars per net square foot, and dollars per gross square foot, because this is a construction project. You're building grows, regardless. But you want to show how that rent looks both net and gross.The goal here is, if I want to exit as an investor or as a lender, what is my risk of waiting until before stabilization? At what point during lease up do I hit the yield that I need to be? Or at what point am I operationally profitable? And the last part, the exit, the biggest toggle here is obviously cap rate, you're stabilizing a property and you're selling it for a certain yield. I put at least 6%. In a post Covid environment that we're living in, office is an interesting subject. A lot of opportunity, and a lot of hurt in some cases is happening in the office space. We're seeing a cultural revolution, frankly, on terms of office.The project I picked here is an open layout, high ceiling, shared amenities. I think this is where office is going, and we are just showing what kind of concept you'd probably be wanting to build today. I was reading the news today and I think 19% of New York City offices are on the market. It's a double edged sword.<a href="https://www.linkedin.com/in/renatyusufov/" rel="noopener

What should you include in your pro-forma when calculating all of the details of a real estate deal? We deep dive into a pro forma for an office development. Renat Yusufov, Managing Partner at Bullpen reviews every item, how should you think about it, and why.Watch the youtube deep dive here: https://bit.ly/3k6Wp3YWatch Part 2 here: https://bit.ly/3y9SHukRead this interview here:&nbsp;www.bit.ly/2VCl8TBWhy don't we dive into an example of what you guys are doing for this particular side of the business.I created a template so to speak for an office development of what it would look like in today's day and age, I come from the philosophy that no two deals are ever going to be the same. Naturally, you will have certain changes. But the core of the model should more or less look alike, it's not just a financial model, it's really a weapon for when you go into battle for a project. It should be flexible, it should be something that you can present relatively simply to either your lender or any kind of investors or limited partners, etc. It should be able to adapt to whoever your audience is, the structure of a model, in my opinion, regardless of what asset class, regardless of what the business plan is, I like to always start with the dashboard. The dashboard is where most of the toggles will be, anything that's an input. And the reason for this is as you're going through the project, regardless of where the onset underwriting starts, along the way as you're talking to GC's, as you're talking to other contractors, architects, lenders, investors, business plans will be adjusted, they will be tweaked, they might be entirely revised, so it's easier for any kind of user, whether it's the partner, the principal, all the way down to the analyst, and company, or even if it's a third party looking at this, to be able to see it all in one place, the Summary tab.Does it typically end up being more expensive and a longer timeframe, or the opposite, when you say that none of them end up being the exact same numbers?In this environment, it's a mixed bag. I've been on the advisory side where people would send me a model of what they want to get done. And I'd go to the market for both a loan and the equity to figure it out with them. I've been on the private equity side, on the buy side, where somebody sends me a model, or I build it initially, and then I say, This is what we want to get delivered, this is the returns we're looking for. I would say, generally speaking, and this isn't true of everyone, people's underwriting tend to be on the aggressive side. Whether you're on the buy or the sell side, whatever model you receive, you're probably reining it in, in the sense of you think the rents may be too aggressive, or the rent growth is too aggressive, or the expenses need to be buffered up a little bit.One place where a lot of things might be hidden or misinterpreted, is any kind of capital expenses. People underestimate what it costs to repair or repaint the hallway, or common space in an office building, if they're buying it already built. The best way to go about this, whether you're just in the beginning of building your model, or you're trying to flesh out your business plan and get it to market, I would say is contact as many professional as possible. This is obviously a networking business, talk to the brokers about the rents what they can reasonably achieve, as you're going through your process of selecting a broker, talk to several GC's about your costs, what they can reasonably get you as far as a budget, and where you could land in terms of construction...

What did I learn at the Real Estate Guys Summit on Sand event this year? A whole lot, and I'm sharing all of it with you today.You should read this entire episode here: https://bit.ly/3qEBczvReal estate strategies:Donate land to the city to build stadium, and you will still own all the land around the stadium.Buy two properties that are next to each other so you can combine operations and expenses and increase NOI, therefore you increase the value of your properties right off the gate.One thing they always say is for you to purchase 5-10% of your net worth in gold, just in case something really bad happens. If you are like me thinking that that gold isn’t producing any money, so I’ll just purchase stocks or real estate instead, the good news is that there are firms that will loan against gold and silver (at Prime + 2 points). What you need to keep in mind is that if gold or silver goes down in value, the firm will ask you to come up with the difference. When that happens, another strategy around that is that you can just buy more gold at that time because gold will go up later either way.Turn your liabilities into assets!All the fun expenses have to make money, your thought process should always be “what am I going to get in order to pay for X”.For example, Ken McElroy wanted to buy a Ferrari, he has something like $1B worth of multi-family investments, he has all the money he needs, but he still said, what can I purchase that will pay for the Ferrari. He ended up purchasing a piece of land that had a billboard in it, the piece of land cost $300,000, the billboard was making $40,000/year. He created an easement on the billboard section, which is the right to use that piece of land for however long you decide (since you're the land owner) and sold the land for $300,000! He now has $40,000 income free and clear yearly that is taking care of his Ferrari.Kim Kiyosaki wanted to buy an airplane. She ended up buying her airplane, the entire purchase can be deducted, plus all of the expenses of the airplane. Not only that, they are chartering the airplane when they’re not using it! So the plane is either going to be free, or they will make money off it. You can do the same thing with a boat!Have no money for a down payment? There are plenty of options:You can get money from most major credit cards, with zero fees for 10 months.Ask your bank lines of credits, ask to increase the lines of credits every 6 months.Pre-sell a product to create income (in the real estate example, for the down payment).Don’t ask “When should I get started” ask “How can I get started”.Even very successful people still get nervous when buying properties, Ken McElroy said himself that he still gets nervous when closing on a deal!Important things to do next:Create a Trust before end of year - make sure you get your CPA and an attorney together to put your Trust in place.Read the minutes of the Fed, they put it out 3 weeks after each meeting.DISC profile, have every employee take the test: https://www.123test.com/disc-personality-test/Sign up for Simon...

Gen Z is anyone born between 1997 and 2015, they are now getting into the workforce and were the generation that was born with a phone in their hands. How are they shopping? How are they interacting? We have a discussion with four Gen Z'ers that live in different parts of the country to find out.You can read this entire interview here: https://bit.ly/3qktjiyWhere are you guys shopping today?D: I use Amazon quite often, whether it’s anything electronics, shirts, clothing, whatever that may be. I don’t shop in too many other places because it’s convenient.J: We grew up with the ease of online. So if we need something, it can be at our doorstep on the same day, one day shipping. Personally for me physical shopping and malls and retail stores, etc. has turned into a day trip, or I go and hang out with my friends. And we still shop and buy. And if we need things, maybe we’ll go out. But a lot of the time if I’m by myself and I just need a cheap pair of flip flops I’ll go on Amazon and get them the next day.C: I usually go to Target if I’m going to buy anything. The biggest thing for me is I that have a very unconventional sleep cycle. I’m up really late, and usually up really early as well. I’m working through the day, pretty long hours, and I need to be able to go somewhere physical, that is open later. And I’ve noticed a lot of smaller shops are restricted hours, they close at seven or eight. That doesn’t work for me because I’m working past seven or eight. And Target is open until 10, 11, or 12pm depending on the area and that’s convenient for me, I don’t like to order online.A: When I was younger, it was just a way to pass time, you went and you walked around Walmart and you would play with the toys and all kinds of stuff. So when it comes to actually shopping now, I just see brick and mortar stores as just ways to pass the time. If I really decided that I need something, or that I want something, I’ll go online or it because I know if I go and look and touch it feel at the store I’ll be, Oh, I don’t need it today. I’ll put it back and go and find it either online when I have a coupon, or when they’re running a sale or something like that. I can wait and I don’t need it today.If you owned a piece of retail today, what would you put in there?C: I would section off a corner of it for virtual office. As far as other retail, I would put something just for me because I have a weird living scheduling as far as when I’m up, and out and about and shopping. I would try and resonate with that because I know there are other entrepreneurs and folks like that, that live a less conventional daily schedule. I would put something in there that’s open 24/7.J: on popular online marketers like Lululemon or Gymshark.D: Warehouse for Amazon items where I'd be a seller.A: People think of these certain brands like Gucci and Prada as making it. I would want to come up with a way to get as much of these different brands more accessible to these people because I’ve also learned through different ways, it’s very niche to be able to go in there.Cody Davis: instagram.com/codyd2020Jake Pinkerton: instagram.com/jakerton.22Daniel...

What is happening with the car wash and self storage investments? This is an update on the portfolio of properties that we purchased about seven months ago.You can read this entire episode here: https://bit.ly/34J3LlmThe first 2 months:Within nine days of closing, one of the roofs caved in one of the car washes because of snow. Thank God for insurance, Nationwide in this case, was phenomenal, it’s during those hard times that you don't want to be dealing with an insurance company that does not want to pay out. They released the funds within two or three weeks of the incident. About 20 days later, my main employee quit without any notice. And at that time, I thought this was potentially a blessing in disguise because we thought we found someone much better within a day of the main person quitting. And it turned out that this new person was actually not a great solution for that particular job. This person was just not doing the job. So within a couple of months, I was able to fire that person. A lesson reminder is that you should hire slow and fire fast.3 months – now (total of 7 months)I want to give it one full year before deciding if this asset class is an interesting asset class to invest in or not. It has a lot of moving parts. We are in the process of automating as much as possible, delegating as much as possible, and creating processes as much as possible, and want to see what the results will look like once all of that is in place. And then we’ll make a decision on, is carwash a good asset class to invest in, or not. In terms of time, I today spend at the very least one to two hours a day working on the car washes alone, the tasks vary greatly, it can be anything from ordering a test of the mud, all the way through what chemicals do we need to purchase, all the way to issuing refunds to customers. The way to be very successful is for you to have a system in place so that anyone can come in and do the job. The goal is not only if something happens with me, but also if something happens with any of the employees because everyone has to be “replaceable”. The business has to run without us in case something happens to anybody.The returnsWe are at the moment averaging about 36 to 48 percent cash on cash return. This is counting our mortgage expense that also is building equity for us, which is how we’re supposed to calculate cash on cash. We expect this to only grow with time because of all of these implementations that we’re going to be doing. These properties do not have any outside investors, we don’t need to do any distributions.Should we continue or not?Our time is so limited in this world that is this an asset class that you want to be working on? Do you want to be dealing with employees that might not be as professional as someone you might work with in the corporate world? Do you want to be dealing with zillions of moving parts, we literally have, seven months in, about 40 different SKU’s for things that we need to buy for the carwash. And that’s not counting anything that is not carwash specific. When we compare this with the self storage, that is probably one to two hours a week worth of work.There were several other things that I dealt with during these last seven months:1. The roof still has not been fixed because the construction company took many months to get the things approved by the city2. We had theft3. We went through the freeze where some pipes froze4. We had employees putting more hours than they were working5. We had one very bad vendor...

What are some of the best practices for raising funds? How to go about finding a partner? AdaPia d’Errico, principal and VP of strategy at Alpha Investing, shares her experience with us.You can read this entire interview here: https://bit.ly/3fiThiBWhat are some of your best practices for raising funds?The best practice is going to be to be a genuine person, I often use the word authentic. Even though that can be a bit of a strange word, what I really mean by authenticity is being genuine, being a real person. And a lot of that comes with humility. And for me personally, that means being myself, there's always this expectation that somebody should have all the answers and be an expert and be able to make guarantees, which of course we know, in any kind of investing is just not something you want to do. You can't make guarantees.And I think a real best practice is to take the time to get to know somebody and to be a real person when you're knowing them, not like an old 1980s style of sales. Simply, this is who I am. This is this is my background. This is what we do in a really specific scenario. For example, this was our worst deal. This is what went wrong. This is what we learned from it. Because we get things wrong. I'm not going to sit here and tell you that every project that we've invested in has knocked it out of the park, including senior living, we've had a couple that aren't performing to pro forma. Why did that happen? Those are important things for investors to understand and to know. Especially having conversations with people, there's a lot to be said for automating the process, for letting people almost be without needing to talk to you. And you can do a lot of that, but there is something to be said about taking some time to have phone calls with people.We always require an initial phone call to understand who would like to work with us, because we are referral based. We're very highly selective even with our investors. And that's important to us, because having the right kind of investors allows us to bring better investments. Building those relationships with those investors helps because they need to know that they can ask me a question. Because if they can't ask me a question, then it means that I can't help them earn trust, if they can't ask a question, they might not invest, and they might miss out on an opportunity. So those are really important things, just running people all the time through a chat bot, or Zendesk, while it is potentially more efficient, it's not as effective as just picking up the phone or spending some time giving bespoke answers, especially in real estate, especially on the equity side, right? It's there's complicated things to talk about. And there's, there's a lot of moving parts to be able to explain to somebody.What's important is really being holistic in your approach to an investor, being a real, genuine person and being willing to speak about the things that went wrong and not trying to put on a facade of expert, or perfection, or we're the best, nobody's going to believe you.How did you find a partner?When my whole life broke down, I had to get super clear on who am I, and what do I want. I wanted great business partners and I manifested them. I have been in the most amazing partnership with them for the past three years.AdaPia d’Erricowww.alphai.com<a href="https://www.linkedin.com/in/adapia/" rel="noopener noreferrer"...

Why is senior assisted living an interesting asset class? What makes for a good operator? What are the challenges in this space? AdaPia d'Errico, principal and VP of strategy at Alpha Investing, shares her insights.You can read this entire interview here:&nbsp;https://bit.ly/3vZkDjqAs the firm that is fundraising and looking for an operator and a really good property. What do you look for in the operator to partner up with?What we're looking for in an operator is a lot of experience. The operator that we are currently working with is a national company, they have the reach, they have the operational capabilities they have in house management. Vertically integrated is really important. Not just a sponsor that wants to purchase the building, because they think it's great cash flow, or they're going to flip it at a profit later, the management of the operations is really important. So we like sponsors that are also operating, because that vertical integration is really important to fully realize the value that's in the transaction. Because it's not just the real estate, and yes, there's cash flows, but you can really add value, and you can maximize those cash flows through a reduction of expenses, through making sure that occupancy is stable and steady, which is one of the biggest challenges in this space, occupancy, in addition to labor.There has to be an understanding of how to operate it, of the local area as well, because although you might think that you can just apply one big giant national brand, to something like senior living, the truth is that you actually can't and that's just proven out, it's very localized. There needs to be an understanding of that local market, how it operates, who's there. A lot of research needs to go into that. What are some of the biggest challenges in the space?Some of them have really been highlighted because of COVID. Some of the challenges arise from maintaining the expenses within range. And COVID really exacerbated expenses in multiple ways. Just PP alone, was a much bigger expense, like all the extra safety and medical equipment that was required. Labor is a big thing. There are some some facilities that really were unable to keep it all together because they couldn't keep staff for various reasons. And although COVID was a very acute thing to happen to the industry, it did highlight some weakness there and the importance of labor, the importance of the staff and their safety. You have your nurses and your people walking away because they don't feel safe. Your residents are not getting care. This is a people business at the end of the day. We're investors and everything like that. But you need to place a primary focus on the quality of life of the residents. And that's something that we know our operator does. And it's really important to us when we invest with somebody, because that piece is what's forgotten, is the people that are there. And that's not okay.It sounds like an asset class with a ton of moving parts. And also at the same time, it sounds like a great time to get into it, from what I'm gathering.Historically, Senior Living has some of the strongest performance relative to other asset classes. Senior living has actually outperformed every other asset class over the past 10 years, except for industrial. Industrial has actually generated higher returns in a one, three, and five year period. But senior living has outperformed everything over the past 10 years.<a...

With so many people interested in buying or building self storage facilities, how do you find one, and add value to a facility? How do you differentiate from the competition? Clair Hoover, an experienced operator with over 20 years managing self storage facilities shares some golden tips.You can read this entire interview here: https://bit.ly/3vv9eYqThe cap rates are very compressed for self storage, how do you go about purchasing them nowadays?You do what everybody has had to do in tight times and in every part of real estate, you end up looking at more properties and bidding on less. A year ago, for every 20 properties we looked at, we would put an offer on one. I’m guessing right now it’s closer to 100 properties that we look at before we find one that we think to even barely buy. It’s a challenging time. I think patience is part of it. But also we want to keep growing. So we keep sorting through every haystack we can find, trying to find some bargain buys.What are some value add methods for self storage facilities, since you have so much experience there.When we buy a property we like to see what we call the triple play. We like to see upside on rate management, we like to see upside on occupancy, and we like to see upside on expansion opportunities. We will settle for two out of three, but we rarely would buy something that doesn’t have those opportunities available.The biggest mistake we see today would be under-managing rate management, there are so many opportunities there, you will actually find people in self storage who brag about 100% occupancy. They’ll brag about the fact that they have the lowest price option in their market. Think through the math on what I just said and what they’re laying on the table. I love meeting people like that I love making an offer on their property, a lot of upside on rate management.Another one is, a lot of people are missing admin fees, it’s become customary, in our markets at least, to be charging admin fees. It covers some of your costs to put a client in and it’s accepted by the market. So again, you’re just letting money on the table. And you mentioned cap rates, when you started talking about $2,000 a year or even 10,000 in admin fees, you take out a five or even a four percent cap in some markets, that’s serious cash being left on the table by not maximizing that.The other two other upsides I mentioned already were occupancy. If you’re low occupancy, I would invest in marketing, you’ve to fill that facility up, that’s dead dollars on the table. The last one, a lot of people say is not available to them, but it often is, and that’s expansion capability. If you’re on a five acre parcel, and it’s maxed out, you’re not thinking outside the box, there has to be some land within a mile or two of you somewhere that you could add more storage to and you probably don’t need to increase your labor costs. You can probably run both facilities out of one office if needed.Another one is tenant insurance. If you’re not selling tenant insurance, there’s a good chance your tenants aren’t covered. And it’s not a matter of if, it’s a matter of when you’re going to have an issue whether it be a fire, or a flood, or wind damage, something’s going to hurt your tenants belongings.How do you differentiate yourself from other facilities in order to increase your occupancy?It can be different in different markets. I would say automation today is probably the best way to differentiate yourself. You’ve to be one of the strongest digital marketers in your market. If you're not, you're probably alienating anyone under the age of 40. And quite a few of us over 40 are going to write you...

How to add value to industrial investing, an asset class full of competition? What were some of the major lessons learned getting into the industrial asset class? Monick Halm, founder of Real Estate Investor Goddesses will be sharing her insights.You can read this entire interview here: https://bit.ly/32GC1N0What are some value add strategies in industrial?There's a niche in industrial that we do called a sale leaseback, and sale leaseback is this, there's a company that has a facility that they are using and they want to sell, mostly because they want to get the equity out of it. But they still want to use it. So they sell it and then they lease it right back. This is very, very niche, very few people do this. And because it's so unusual and so few people do it, that really is the value add. We'll buy it and then the seller becomes a tenant, usually with a 20 year lease, built in rent increases, NNN. They're paying rent, property taxes, insurance, and maintenance. If there's an issue with the toilet, they fix the toilet, if there's an issue with the roof, they'll fix the roof.We will typically sell it in four to six years to an institutional buyer, a pension fund or insurance company. They love these deals with an industrial tenant already in place with several years of steady rent, payment history with 15 to 17 years left on the lease. They'll buy those all day, everyday but they do not do the sale leaseback, so that is where the value is added. We also buy these slightly below market so we have built in equity. We rent it slightly below market as well to the seller/tenant which also gives us room, that's how we're adding value.And the one risk is in that tenant. So we do a lot of due diligence on the company to make sure that they're a super good bet, a good risk. They're well capitalized, they're very strong companies. The youngest company we've done one of these deals with is 17 years old. I think we've had one of those as old as 80 something years. They're very strong companies that are not going anywhere.Besides digging deep into these tenants, are there any other lessons that you can share that you learned in this asset class so far?With our 109 spots in Houston, we have our various industrial park, those parks are flex warehouse space. Some of it is a little bit like retail. We have all different types of tenants. We have three churches, bakers, garages, all different types of tenants.Those tenants had mixed success during the pandemic, and the economic fallout of all of that. Churches couldn't meet, so it was hard for our churches to pay rent, the retail type spaces weren't able to do business and the other ones were fine. What's nice about that is we had 109 tenants, we have a mix of different things. Some are good, some are not bad, some didn't do as well. The lesson we learned, is having that variety of different tenants and really working with them and staying in communication with them, helping them to access some of the federal money that was available for businesses, that helped allay the risks. In our sale leasebacks, we actually had no problem with those companies. They were all essential businesses. A lot of them, like our food ones, were doing more business in it than ever. They were great.And when you had a certain percentage of your tenants not paying, did you have to raise more funds? How did you deal with that?We were fine. We had to get creative, stay in communication with them. We had to help our tenants be able to access cash so they could stay in business. We did have a couple that closed their doors and weren't able to last, there were enough that survived. On that particular deal, we paused distributions but we definitely did not need to get extra cash.Monick Halmwww.reigoddesses.comPodcast: https://apple.co/2Parmai--- Support this podcast: <a...

What does it take from having a negative net worth to retiring within 4 years through real estate investing? Michael Manthei shares his journey, along with some of the top advices he would give us today, and some of the biggest challenges that he encountered throughout that journey.You can read this entire interview here: https://bit.ly/2Qr3waJWhat are a couple of advices that you would want people to know, let’s say for back then, what was going through your head and what would you want someone that was in your situation to know in order for them to get their career started?The action taking is a huge one for me. The other one is to get around positive people, generosity minded people that want to help, that was huge for me, I started going to local free meetups and just meeting people. And there were a couple of people in those groups that would walk properties with me, give me advice, that was a huge deal. I was always one that wanted to do everything on my own. And I’m realizing more and more throughout life, that that’s fine, and you can be successful that way. But working with other people is also an amazing way to add strength to your picture. If you have a certain skill set, and you work with someone that has a complementary skill set, that can be a beautiful partnership. With partnerships, you have to be very deliberate with, you don’t want to enter them flippantly. But if you really get to know the other person, and being open to working together can be a shortcut to success as well.What were some of the biggest challenges that you faced during this journey?Staying encouraged, and maintaining belief is challenging. If you have something in your heart that is greater than what you see around you, and what your peer circle is. That's probably why you're listening to something like this, it takes courage to break through the average of the people you're closest to, and enter a new realm of wealth and success. Just managing that, and staying encouraged is a huge part of the battle. That's more on the mindset side.On something more practical, we started with such little capital, that it took every penny we had just to get into the next building. And I thought that we would just fund any renovations that were needed out of cash flow, which is fine. But you can't fund a renovation and live off of the same cash flow. You can't spend it in more than one place. If you're running a pro forma, and that's something that you need to be good at in this business, you typically put, in some of the older properties in our local city, 10-15% for maintenance and repairs. There were some years that even on a very large portfolio, I was spending 30 and 40% of the gross income on repairs, because I was buying buildings that had a deficit in deferred maintenance. It has worked out, we've made the repairs and dug out from that. We quality buildings now. But that made things tight for a while. And it's a great practice to make sure you have all the money upfront to correct any deferred maintenance. That's something we do today, if a building needs something, we raise additional capital and make sure the deal can support that and get that done at the beginning. I didn't really have that luxury when we got started. But we definitely had to work hard to still make it through.What made you start thinking about real estate investing? Like a lot of people, I read a little purple book. That was the first entry point that completely rocked my world. And I'm referring to Rich Dad, Poor Dad. It just blew my mind that people thought that way. I didn't grow up in a family that talked about money, or had any wealth.Michael...

What is going on in the single tenant retail space? What are the top things you should negotiate in retail leases? We cover a lot of ground in the retail space with Randy Blankstein, President of the Net Lease Advisory firm The Boulder Group.You can read this interview here: https://bit.ly/3lPrrw5What is the difference between N, NN and NNN leases?In single net properties, which we typically don't see in our sector, but certainly exists in the marketplace, usually the tenant pays rent and the property taxes and that's it. It's not the majority in the sector, but for single net it's rent and property taxes. That's it. For double net, which is the majority of the sector, double and triple net are equal, the tenant pays taxes, insurance, and some type of maintenance. For example, we have some freestanding property, let's use Walgreens as an example, who used to be a double net, but now it's a triple net lease, they converted a while back. When they were double net properties, the tenant was paying the taxes, the insurance and some maintenance. Walgreens carved out roof structure and parking lot as landlord responsibilities, which is pretty common for double net leases. And sometimes there's maintenance obligation of the tenant, and then replacement is the landlord's obligation. And sometimes the landlord has all those responsibilities, but on double net leases there's some type of shared responsibility, or landlord responsibility for those issues. For true triple net leases, the tenant is paying for everything. They pay for maintenance, repairs, taxes, insurance, everything is paid by the tenant, so there's very little to do, and you just pretty much own a property that just gives you a return without having to do any kind of management of the property. It's completely passive.What are some super important things that you think landlords should definitely negotiate in these kind of leases?There's 10's of things you can talk to on lease negotiations. But really, you need to focus on two things, because ultimately, a lease is only as good as the credit and financials behind the tenant, and/or the individual's success at this location. Even if it's a large public company, you still need to know that this location is ok, so that you have a strong renewal probability, that's what you're trying to figure out. So what you really need is store sales reporting for this individual location, you really want to know that the rental sales is in line with the tenant average with the market average, and that this is a strong performing location that has a high renewal probability, because that's the biggest risk of that leased property is, will they renew at the end of the lease term. So knowing store sales takes a lot of risk out of it. A lot of lenders want them and a lot of buyers want them. So it's really important to get to store sales. Also for private tenants, franchisees, other people that aren't public, you really need the tenants corporate financials, because even though this location may be doing well, or average, it's still backed by whatever parent is ultimately the guarantee on the lease. So you need to understand the strength of that guarantor, a 25 unit franchisee, some have a great balance sheet, some not so good. So you really need to know where the corporate stands. If I had a choice between the two, I would want my individual store sales first, because even if it's a bad franchisee, if this is their best location, they'll close the other locations first, and yours will still be standing, even if the corporation isn't doing well.Randy Blanksteinwww.bouldergroup.com<a href="https://www.linkedin.com/in/randyblankstein/" rel="noopener noreferrer"

What are companies looking for right now? Benjamin Osgood will share insights coming directly from office tenants. He has brokered over $250M in real estate transactions and is the founder of Recreate Commercial.You can read this entire interview here: https://bit.ly/30DLrrvWhat will office look like in the near future?We've learned from COVID that we all don't necessarily need an office for work, because as the pandemic has shown us, we can work anywhere if we need to, give us a laptop and a wifi connection, and we're good from the work side of things. I think that's going to be a trend that we'll continue to see. But we've also learned on the other side of that that we still need a physical place to come in, meet with our team, foster our company culture, mentees need a place to be mentored. Conversely, supervisors want to see their people working, they want to make sure that, even though the Slack channel is green, the light is on, that they're actually working.But then also, we're rethinking what is the workspace used for? Is it for work that is heads down? No, totally not. We need a place to come in, collaborate, innovate, throw ideas on a whiteboard, get over caffeinated, hang out with our team. We're tribal people, we want that human connection, I want that human connection. Most people want that human connection. I think most companies are going to need a physical space. And we can't forget that the office is very much a commodity in both hiring and employee retention. We know that companies want that really cool place to come work, there's a reason why those employees stay there and why culture is so integral to a company success, and zoom meetings have their limitations.We're also thinking that maybe we don't need to spend so much of our lives commuting. And maybe we don't need to go into the office five days a week. We're definitely seeing an office space that's configured differently. For one, is it going to be dense, linear benching? Probably not. Even pre COVID, we knew that that was not the greatest way to work, it was simply a way to hedge against very expensive rent. Pack as many people into as dense of a space as you can. It's going to be more collaborative, more soft seating, more whiteboards on casters, maybe more of a residential feel with plants and furniture that reflects a more chill and welcoming environment rather than just heads down linear benching. One thing our clients are saying is, We realize we're taxed on working from home 100% of the time, it has lost its charm, but also, not commuting five days a week is pretty cool, too. So we are anticipating and predicting a hybrid.How do you think that will affect how much office space companies will look for? Do you think it'll be the same, or smaller?I think it's zero sum. On one hand, we are decreasing our densities. So by way of example, pre pandemic, especially in major cities, like New York, Chicago and San Francisco, we were planning for 150 square feet per employee. And now that's almost upended. it's at about 325 sf per employee, which is more than double the square footage. The space is being configured much differently. Now we're taking that same square footage, but rather than line it out with just rows of linear benching, it's more soft seating. It's like, Grab that corner over there with your team, grab your tablet, or laptops or whatnot, grab a coffee, let's talk, let's collaborate, let's innovate. You just need more space for that type of use.<a href="https://www.linkedin.com/in/benjaminosgood/" rel="noopener noreferrer"...

What's happening in the medical office space and why is it a good asset class to invest in? We are getting insights from Catherine House, National Healthcare Chair for the firm SVN. She is responsible for coordinating healthcare related commercial real estate activities in medical and dental office buildings.You can read this entire interview here: https://bit.ly/3c47VauWhy is the medical office space popular right now?1. For those people who are looking for safety, and I think there's an element of a flight to safety for people who are interested in this sector, if you're looking for distressed asset opportunities, this is probably not going to be the right sector for you to be focusing on. There's a number of reasons for that. And if you actually look at the Medical Office fundamentals, there's some really interesting trends. If you look at rent growth, for example, I'm specifically looking at hospital affiliated medical office, the average rent continued to gradually increase throughout 2020. And they're predicted to continue increasing in 2021. So the national medical office rent is currently approximately $26 per square foot. And we've positive rent growth, currently at less than 2% nationally.2. The other fundamentals to look at is occupancy. Occupancy for on campus is currently 93.3%, and 92.6% for hospital affiliated off campus medical office buildings. Occupancy trends have been very steady. And they're actually forecast to remain steady throughout 2021. If you compare that with our predictions that we were just talking about for regular office, we're talking about very stable metrics with vacancy below 10%, and predicted to remain below 10%.3. The other thing that we're seeing is absorption rates are outpacing completions. If you look at cap rates, another great fundamentals to take a look at, we actually saw them decline in 2020. And declining cap rates, and steady rents actually mean an increase in the underlying value of the assets. So, based on RCA's data, the quarterly average MOB cap rate actually remains between 6.3 and 7%, since the beginning of 2015. So it's steady, it's safe. For investors interested in a safe steady investment, this particular sector was getting a lot of interest.What is driving all of that demand?1. One of the key reasons is that medical office is an essential sector that really remained open for business throughout the pandemic.2, It's also an area where it is extremely difficult to do it remotely. For the most part, if you need to see your physician, you need to physically go into the office. Whilst there has been an uptick in trends, such as telemedicine, which is a very fascinating area to get into that I'm not sure we have time for today, in general, there is still that demand for in person visits.3. And many physicians did have their income impacted in 2020, one of the reasons for that is a lot of the elective surgeries and procedures that are actually the most lucrative, many people actually put those off. So the revenue for the year and 2020 was down.4. But in the long run, that businesses survived and actually are predicting to be extremely busy in 2021 and beyond.5. And that's not even getting into some of the demographic trends that we're seeing with the aging baby boomers. There's a correlation as one gets older for an increased need for medical services. So we're actually expecting the demand for medical office to continue to grow significantly over the next 10 years plus.<a...

What is happening in the office space in large cities like San Francisco? What has happened in the last year? What is happening right now? Will we ever see any deals? Reuben Torenberg, vice president at CBRE, will share his insights.You can read this interview here: https://bit.ly/2MgPK8TI've been dying to speak with someone in the office space that is focused in large cities like San Francisco, to see what has happened with office over the last year, do you mind sharing with us what is going on in your world?It has definitely been a change from anything we've experienced in our career. The market has been placed completely on pause since March of last year due to the pandemic. As soon as it happened, as in many other large Metro cities, there was a mandate from the city that stated no one can occupy office space. Since then, all the technology companies locally have at first tried to defer their rent or get free rent with landlords. And unfortunately, they were not very successful because these landlords also have bills to pay, they have mortgages to pay, they have to keep up the operation of their building.Since then, just over 8.5 million square feet of sublease space has been placed on the market. As the months went by, rates dropped from the mid to high 80s to mid to high 70s. Then a couple more months passed and rates dropped to the low 70s, then a few more months passed and rates have dropped into the 60s. Now, for subleases, we are seeing rates at 30% lower than what they were back in March 2020.I assume that there aren't too many defaults yet, is that correct?That is correct. There hasn't been too many defaults, what some companies have tried to do is cut their losses and seek a termination. Although landlords had been very hesitant to do so because of all the uncertainty going forward, if you were to terminate, and landlords had other tenants waiting in the wings, that's one thing. And you can agree to a termination with a penalty of a couple months rent and feel confident that you'll get the space leased again. But without any end in sight, it's certainly much harder to have those conversations. At least 80% of these technology companies still have their space in the sublease market, or are hoping to come to an agreement with a growing technology company who can use the space once shelter in place is lifted, and rid themselves of remaining obligation without suffering too much pain.Is it safe to assume that landlords are not hurting right now? And nobody's trying to sell their office building?Yes, I would say they aren't hurting as much as they likely will be if this continues in another year, just because the market has been so hot over the last five years that they've been able to get deals at the rates that they want for long term to lock in security for the building. And those who are going to sell their buildings right now are looking at a pretty difficult selling market. So what we're really seeing mostly is landlords trying to hold on, and get past the uncertainty of the virus and see how efficacious the vaccine is before going back into into the market to sell their buildings.And what is the sentiment regarding office in general in your world?I certainly think that they will eventually bounce back. But the trend right now is leaning towards satellite offices in secondary metros like Austin, Salt Lake City, Denver, and even Miami. These companies want to retain their talent and give them a place to work besides their homes.Reuben...

What are the major issues that can arise on a title commitment? We talk with Mindi McLain, attorney and co-owner of Wright Law.You can read this entire interview here: https://bit.ly/3rPVNjTTell us some of the biggest issues that you have found in a title report before.I have had some big messes, I don't even know how to describe how messed up a property can be. Deals that are too good to be true are typically not true. I've had a few deals where, especially if you're buying something from a family that has been in a family for a long time, and then somebody down the road decides they want to sell it, most of the problems that you see are with people that have died in the chain of title ad nothing's been done. There hasn't been a probate of their state, there hasn't been an affidavit of heirship. You're trying to build a family tree, and it has 80 branches, and they had 12 kids. I've had a lot of them, especially small deals, but we had to just go and find all these heirs that were lost. I look for the lost heirs and say, Hey, did you know that you have a 1/64th interest in this property? And would you mind signing this deed? So those can be wrecks, but it can usually be worked out.Another issue is a family, and several people have died. And we find that one of the heirs is a minor, meaning they're under the age of 18. But they've come into title on a property. In Texas, you can get around that, but you have to get a court order allowing a parent to sell that property on behalf of the minor. And then the proceeds from the sale have to go into the court registry, and then it sits there until they turn 18. And then they can go and cash out their inheritance. That happens if someone dies and their heir just happens to be seven or eight years old, or 14 years old. They still are an owner of that property, but legally, they don't have capacity to own property or to sell property. And so you have to involve a parent or a guardian.Some of the worst things I’ve seen are people buying property and not fully reviewing everything that’s in Schedule B and then finding out that there’s a restriction on their property that they didn’t know about. The title company is not going to necessarily tell you hey, you can’t use this property that looks like a retail store, you can’t use it for retail. They’re just going to note in their commitment that there’s no restriction, or a deed, or subject to whatever it was in this document. If you go back and read it, and you bought a property and you wanted to use it for a funeral home, and then you later found out that there’s actually a restriction on that property that says it can’t be a funeral home, or whatever you wanted it to be, then you have a problem because the purpose that you wanted that property for you cannot do it legally because there’s a restriction. And that wouldn’t be a covered claim, if that restriction was an exception to your policy.Also leases, some people will see that there’s a memorandum of a lease recorded, and they won’t really dig into what the lease actually says and ask the seller, Can I see that lease ahead of time? And maybe the tenant either had an option to purchase a property or a right of first refusal or something like that. And they come back later and say, actually, you didn’t have a right to buy this, I had a right to buy it. So they try to undo the sale.People are getting savvy to all the ways that you can generate income from rural properties. And so that includes not just oil and gas leases, and mineral production, but also solar farms, wind farms, all types of alternative energies.Mindi...

What is a title commitment? What is a survey? What should you watch out for in a title commitment? We talk with Mindi McLain, attorney and co-owner of Wright Law.You can read this entire interview here:&nbsp;https://bit.ly/3jdLsLzWhat is a title report? What is a survey? And what does it do for you when you're purchasing a property?Title work means you're looking back in the records, so that when you buy a piece of property, you know that you have good title to, that you'll become the owner and you know exactly what is going to affect that property. There are lots of different things you can order from a title insurance company. Some people will call it a title report, some people will call it a title run. Most often what you want from them is what's called a title commitment. A title report is usually just a short one or two page document, it says title is vested in this person or entity. Here's the legal description and there might be a lien against it.&nbsp;A title commitment is the most comprehensive title instrument that you might want if you're going to look at buying a property and most contracts are going to reference a title commitment. The title insurance company that you choose will take your contract, open title on it, and they'll look at who the owner is, what sort of easements, encumbrances, liens, problems are out there, and what needs to be done or fixed before closing, so that if you're the buyer, when you close, you have good title to the property. And when that commitment then closes, it becomes what's known as title insurance.Surveys go hand in hand with the title commitment, but that's actually sending a licensed surveyor out to their property to look at what's on the ground. The title commitment doesn't do that, the title examiner does not visit your property and actually take a look at it. They're just looking at records, whatever is publicly available, but the surveyor is actually going to go out and visit your property, he's going to measure whatever you ask him to, the boundaries, or the improvements that are there.What are some of the things that people should really watch out for in the title report and the survey?I spend most of my time reviewing Schedule B, those are the exceptions to the policy, followed by Schedule C, the requirements. The first mistake that people make is getting the commitment, and not even really reviewing it or never getting past Schedule A. The second thing that they do is they review Schedule B, but they don't really dig into what it says. So it's going to say, these are things that are excluded from your policy, it's not going to give you the whole summary and analysis of what those things are. If you don't ask, what is that document recorded you'll never know what that document said. There could be an easement recorded, a lease recorded, or a deed recorded. But you'll want to ask the title company for copies of those documents.This is where the survey can come in handy. If you get a title commitment, and it has 18 easements listed, or it has a right of way deed or something like that, your surveyor can take that Schedule B and those documents and he can locate those easements or those roadways on the ground, and then show you where they are on your survey.&nbsp;The same with the survey, if you get it back and you have questions, you want to make sure your title commitment and your survey go hand in hand and that your surveyor has actually reviewed your title commitment and that he or she has included those documents that need to be included on the survey. That way you know where it's at, and your survey can actually be part of your title insurance.Mindi McLain<a href="//...

Closing on a property the same day that the president declares a national emergency? Our friend Loe Hornbuckle checked that off on his real estate investing career last year. How did him and his team solve the problem that was about to arise?You can read this entire interview here: https://bit.ly/2Mx2xUwYou closed on a property when COVID hit. This can be something that can happen at any point in time in different types of versions. It can be the economy or anything else. How did you guys overcome this problem?I don’t think I’ll ever forget this, because how many people can claim that they closed a major real estate transaction on the day the President of the United States put the United States in a state of national emergency? Literally, the day we are closing on the deal, the President’s on TV saying we’re entering a state of national emergency and, like a lot of people, you’re in California, you have earthquakes, you have fires, there are all kinds of city and state emergencies, but I’ve never seen a national emergency before. So I didn’t know what that meant, or what was going on. All I know, is that I closed a very large real estate transaction, by some standard, $18 million is pretty large, on the day that the president is on TV, basically saying the sky is falling.&nbsp;because our construction was being done in phasing, we went ahead and figured out what our three targets were, what we needed at a minimum to close the deal in terms of investor equity. Then the second question was, what do we need to do phases one and two? And the next question was, what do we need to do all three phases? So we broke the project up into a few different metrics When you're doing a raise, people always focus on the ceiling, how much money you're going to raise. The question that we asked ourselves was, what's the minimum amount of money that we can raise in order to not have the project be delayed? And so we came up with those three numbers.Are there any other tips that you can give our listeners on how to deal with unplanned situations like this one?If you were to think about all the things that it takes to write a business plan, I think the first thing you have to be is you have to be realistic. When you're realistic, and you're writing a business plan, one of the questions you should ask yourself is, how could this go wrong? What are the problems this deal could have, and then try to be creative and pre plan. So much about people that write business plans, it's all optimism. For example, if we just assumed, that we were going to raise this money, no problem, we hadn't set the floor, then we potentially could have had to rewrite the operating agreement, and that could have caused other investors to be spooked. Instead, we just said, Hey, this is the minimum amount we're going to raise, this is the maximum amount we're going to raise.Always go through your business plan and just think through things that that could happen, maybe you won't raise all the money, maybe you'll have some price increases. You're going to need to have a healthy contingency, and things like that. A lot of what made us successful on this project, or come to a successful conclusion, really dealt with going in being realistic. And then also asking, Where can we have problems? And if we do have these problems, what's our plan in case we face them? Because having that in your back pocket, and when something does happen, you've already kind of planned for it. It helps a lot in the moment because you don't feel like you're being blindsided by something you couldn't see coming.Loe [email protected]<a href="//www.goodhorncapital.com" rel="noopener noreferrer"...