The Commercial Real Estate Investor Podcast

Key Takeaways:Be wary of overly optimistic financial projections that are not supported by strong fundamentals in the current business modelBalance visionary leadership with experienced operations Rigorously stress test tenant demand and credit risks when assessing viabilityDiversify your tenant base across different industries and company sizesTrust your calculated underwriting thresholds and don't get caught up in hype when negotiating deals

Key Takeaways:- Tyler is focusing more on YouTube content and livestreaming to educate people about commercial real estate. He's seeing good growth and engagement on certain videos.- His salt ranch development project is nearing completion of permitting but has faced delays from the city.- He's working on an exciting lease deal at the Peerless Mill property in Chattanooga.- CCC Nashville, a major commercial real estate networking event, is being launched in April that Tyler thinks will be very beneficial for people in the industry.

Key Takeaways:- Crexi is a leading commercial real estate marketplace that aims to make the commercial real estate process more efficient and accessible through their open platform and tools- They are leveraging technologies like AI to enhance listings, target users, and generate reports to help brokers and investors- Their auction platform is facilitating large commercial real estate transactions and generating interest through live bidding- Brokers should focus on transparency, communication, and collaboration when building their sales teams to best serve their clients and partners

Key Takeaways:Commercial properties can be bought with no money down through creative deal structures like seller financing, partnering with existing owners, or raising private capital from investors. Getting a real estate license allows you to represent buyers and roll commissions into equity in deals, effectively buying in with no money out of pocket.Building skills in areas like leasing, property management, or renovation can allow you to partner with existing owners and earn equity without cash by adding value.Finding "killer deals" is a valuable skill partners will value in exchange for cash in a deal.

Key Takeaways:- Commercial real estate may have hit a cyclical bottom based on signals from large firms like Blackstone that prices have dropped 15-25% from peaks- It's a good time to buy real estate if you can get a good basis and hold for the long term of 7-10 years- Investors need to focus on deals with strong historical cash flows and low-risk assumptions- Leverage will be lower around 55-60% so investors need patient capital willing to hold for the long term- Debt strategies are becoming more popular for large funds as an alternative to equity

Key Takeaways:The importance of taking action and gaining hands-on experience through initial real estate property purchases.Starting small and affordable with one's first investments to minimize risk while learning.Aiming for at least an 8% cash-on-cash return from investments.Improving real estate investing skills over time through additional purchases and focusing on areas like deal analysis, financing, and property management.Treating real estate investments like a business by implementing systems, building a team, and focusing on cash flow, appreciation, and cost basis.Specializing in a niche market by conducting research on opportunities and becoming an expert in a targeted area.

Key Takeaways:Tyler discussed looking at commercial properties under $250k, such as a 2500 sqft warehouse near Houston for under $250k that could provide a 10% cap rate. This shows opportunities exist for lower budget investors.He emphasized the importance of networking to find deals and partners, such as through events like CCC.When asked about first-time commercial investments, Tyler recommended flex space, self storage, or other trending property types that may be easier to find investors for.He provided advice on funding options even with poor personal credit, such as partnering with heavier investors or syndicating deals.Tyler discussed opportunities in converting non-traditional properties like car washes into alternative uses like restaurants or micro-units.

Key Takeaways:Cultivating relationships with banks, lenders, special servicers is important for finding distressed property opportunitiesNetworking groups like ULI, SIOR, and CREDO are good ways for brokers to meet developers and other professionalsSpecializing in a specific asset class or market allows brokers to become experts and better compete against generalistsThere are pros and cons to both small independent teams and larger brokerage teams, and brokers need to choose what aligns with their goals and personalityProspecting for off-market sellers requires manually calling owners and being discreet to maintain privacy for existing businesses

Key Takeaways:The top 10 real estate markets for 2024 based on the Urban Land Institute's emerging trends report, with a focus on investment opportunities in each market.Seattle, Raleigh-Durham, San Antonio, Boston, Austin, Atlanta, Dallas-Fort Worth, Phoenix, and Nashville are highlighted as top markets.The best investment opportunities highlighted include industrial facilities, multifamily housing, creative office spaces, life sciences lab spaces, and mixed-use developments.

Key Takeaways:Provided updates on several real estate projects including a hotel development and challenges with permitting.Discussed plans to launch a commercial real estate mastermind program and is seeking input on how to make it successful.Also mentioned writing a second and third book and is building a book launch team.In answering questions, provided advice on strategies for finding off-market deals, making offers, and networking through organizations.

Key Takeaways:Tyler and Logan started a new podcast segment to discuss their brokerage businesses each month for accountability and to provide insight into running commercial real estate businesses.Tyler's brokerage did $1.35 million in sales in January, lower than their quarterly goal but they have $56.6 million in active pipeline deals. They track metrics like leads, active deals, pipeline value and sales in Hubspot to monitor performance.Logan's brokerage aims to do $55 million in sales this year and has $23 million in active pipeline deals to work towards hitting their goals.

Key Takeaways:Real estate investing in 2024 will require more work but also offer more potential rewards compared to recent yearsTop markets for investment opportunities include Nashville, Raleigh, Durham, Austin, Phoenix, Dallas, Fort Worth, Atlanta due to job and population growthIndustrial, multifamily, and retail sectors maintain positive outlooks while office faces challenges from remote workTarget economically vibrant cities and future-proof buildings that can accommodate different tenantsMaintain rigorous underwriting and stress tests for dealsLook for off-market and distressed opportunities for lower pricesBe patient and selective with deals as the market goes through a repricing period

Key Takeaways:Leasing commercial properties can be challenging for beginners but there are strategies like hiring a professional leasing team or directly marketing to potential tenants.It's important to have a clear buyer profile with specifics like location, size, age of building, etc. when working with commercial brokers to find off-market deals.Getting initial estimates from contractors can help evaluate the viability of flex space/mixed-use development projects before committing to full construction plans.Events like mastermind groups are valuable for networking and learning best practices from other experienced commercial real estate investors.

Key Takeaways:Alec is developing a 10,000 square foot flex industrial building near an airport in Spotsylvania, VirginiaIt's important to do market research and comps to understand achievable rental rates in the areaConstruction costs can vary significantly depending on location, but Alec has estimated a cost of around $112 per square foot for this projectDue diligence like geotechnical surveys and understanding local permitting/fees is critical for development projects Creative financing strategies like seller financing and walking debt can help fund development costs

Key Takeaways:- Hard money lending can be a good alternative investment for earning higher returns than traditional banks, especially as banks become more restrictive. Private lenders like Urban Gate Capital can close loans faster.- Urban Gate Capital has funded over 300 loans totaling over $33 million by structuring an evergreen debt fund to efficiently raise and deploy capital.- They emphasize conservative underwriting by ensuring loans are secured and they can recover principal if needed. Foreclosures have been rare.- Hard money can help bridge gaps for commercial deals like Peerless Mill when traditional financing falls through. Terms like interest-only can make cash flow work better.- Finding quality operators is important, as most issues have come from operator performance, not property issues.

Key Takeaways:Tyler recommends taking 30 days off work each year from December 15 to January 15 as it is typically the slowest time for commercial real estate.He provides advice on getting started in commercial real estate in Nashville in 2024, recommending learning as much as possible, networking, and potentially partnering on a first deal.Tyler discusses some of the challenges he faced with a hard money loan for a house flip where the borrower filed for bankruptcy.He recommends bringing 25-30% of the purchase price as a down payment for a commercial property acquisition and discusses strategies for raising funds from investors.Tyler outlines some of his goals for 2022 which include producing educational content, releasing new courses, and bringing a commercial real estate networking group to Nashville.

Key Takeaways:- 2023 was a challenging year for commercial real estate with rising interest rates and economic uncertainty- Investors are focusing more on stable asset classes like multifamily and industrial properties- Creative deals and alternative asset classes may provide more opportunities going forward- Accessing private/hard money lending could be attractive given current rates- Insulating portfolios from downturns and having a long-term approach will be important strategies for 2024https://www.tylercauble.com/podcast/episode185

Key Takeaways:- It's important to hire an experienced real estate attorney who understands commercial leases and transactions. Referrals from others in your network can help find the right fit.- When reviewing a lease, pay close attention to ensuring the tenant is creditworthy, the lease terms actually make it a true triple net lease, and that there are no early termination rights for the tenant. - Getting an estoppel certificate directly from the tenant is important to verify the status of the lease and rent payments from their perspective.- Assignment and sublease provisions should ensure the landlord retains control over any future tenants in the space.https://www.tylercauble.com/podcast/episode184

Key Takeaways:- Having a systematic approach to building and maintaining relationships with brokers, property owners, and other industry professionals to generate deal flow- Developing clear investment criteria focused on factors like location, demographics, property condition, to efficiently filter through deals - Using technology like Google Maps, PlaceIQ, and virtual assistants to help analyze deals at scale, but still validating data through on-the-ground research- Focusing on consistency by pursuing smaller, lower-risk deals rather than only swinging for "elephants" which are high risk and infrequenthttps://www.tylercauble.com/podcast/episode183

Key Takeaways:- Hiring a third party asset manager can allow an owner to take a step back from day-to-day operations and focus on other goals or investments- An asset manager acts as the CEO to oversee finances and hold the property manager accountable - It makes sense to consider an asset manager once a portfolio grows to around 100-200 units- When onboarding a new asset, an asset manager will evaluate financials, goals, timelines, team members, and identify any issues or opportunities- Turning around an underperforming property requires fixing maintenance issues, improving marketing, addressing tenant complaints, and ensuring the property manager is actually completing taskshttps://www.tylercauble.com/podcast/episode182

Key Takeaways:- Hiring a third party asset manager can allow an owner to take a step back from day-to-day operations and focus on other goals or investments- An asset manager acts as the CEO to oversee finances and hold the property manager accountable - It makes sense to consider an asset manager once a portfolio grows to around 100-200 units- When onboarding a new asset, an asset manager will evaluate financials, goals, timelines, team members, and identify any issues or opportunities- Turning around an underperforming property requires fixing maintenance issues, improving marketing, addressing tenant complaints, and ensuring the property manager is actually completing taskshttps://www.tylercauble.com/podcast/episode181

Key Takeaways:- The commercial real estate market is slowing down significantly compared to last year, with brokerage volumes down 50% or more for many brokers.- Investment sales have dried up considerably, while leasing remains more active as companies still need space. However, cap rates have risen significantly.- The office market faces uncertainty, especially for Class B properties, but Class A properties and well-located spaces are holding up better. Co-working faces challenges after WeWork's issues.- Industrial, especially Class B, remains in high demand due to limited supply. However, there is a large amount of new Class A inventory that could face vacancies if the market pulls back further.- Retail fundamentals remain uncertain but some brokers see opportunities in Class B strip centers. However, new retail development is limited after the "retail apocalypse."- The brokers plan to focus on over-communicating with clients, thinking creatively for new opportunities, growing their teams, and ramping up prospecting and business development activities in the challenging 2024 market.https://www.tylercauble.com/podcast/episode180

- The real estate market is facing challenges like higher costs, difficulty obtaining financing, and uncertainty about the future. However, this also creates opportunities for investors who can find good deals.- Local politics and policies have a major impact on real estate markets, more so than who is in the White House. Investors need to pay attention to their local areas.- Expectations for investment returns will likely need to be adjusted downward, with a focus on cash flow over high IRRs. - Rising costs like insurance are major issues in addition to interest rates, making deals harder to make work financially.- 2024 may see opportunities emerge as developments from the past few years deliver properties into a difficult market environment. Having cash available will be important.https://www.tylercauble.com/podcast/episode179

Key Takeaways:- Tyler is taking a sabbatical from mid-December to mid-January to recharge and plan for the new year.- He is working on a book about commercial real estate investing and companion materials to help visualize deals.- For 2024, Tyler is interested in smaller neighborhood commercial properties, industrial/outdoor storage, flex space, and some residential construction.- He thinks now is not the best time to invest in multifamily due to high prices and low yields. Cap rates need to increase more before it makes sense.- Covered land plays that cash flow are appealing investment opportunities.- Networking, mailing lists, and leveraging one's platform are effective ways for investors to find deals without using expensive services like CoStar.https://www.tylercauble.com/podcast/episode178

Key Takeaways:- Self-serve car washes can provide high cash-on-cash returns, often 30-90%, through improvements like adding credit card readers and changing wash timers.- Locations with high traffic and growth are ideal, as are sites that have been undermanaged and offer opportunities for operational improvements. - Common value-add improvements include updating signage, credit card capabilities, and in-bay automatic equipment.- Self-serve car washes provide diversified revenue streams from multiple bays and amenities compared to single-tenant tunnel washes.- Ongoing management involves daily cleaning, equipment maintenance, and cash handling but can become relatively passive once optimized.https://www.tylercauble.com/podcast/episode177

Key Takeaways:- Tyler is excited about the potential of industrial outdoor storage/vehicle storage properties as covered land plays that can provide good cash flow. He discusses underwriting assumptions and marketing strategies for these types of properties.- Tyler discusses his brokerage business and some recent listings they have picked up. He also mentions a drone he recently purchased to help with property marketing photos/videos.- Tyler fields various questions from listeners about commercial real estate topics like cap rates, specific markets, leasing to certain business types like wine bars, and more.- Tyler seems optimistic about investment opportunities in 2023 and 2024, expecting some distressed selling opportunities as interest rates impact property owners.https://www.tylercauble.com/podcast/episode176

Key Takeaways:- It's important to find your niche and become a thought leader in your area of commercial real estate- Having the right systems and infrastructure like a CRM and calendar are crucial for staying organized- Leveraging technology like podcasts and blogs can help generate leads and position you as an expert- Building a team is important for scaling, but you need to clearly define roles and expectations- It's valuable to get experience on both the landlord and tenant representation sides of commercial real estatehttps://www.tylercauble.com/podcast/episode175

Key Takeaways:- Tyler believes that while office space may decline, it will not disappear completely and flexibility will be important going forward- Flex space is a high-demand asset class with low supply due to redevelopment of existing flex properties- Commercial real estate values have already declined by around 25% and more declines may come as sellers are forced to lower prices- It's still a good time to buy commercial real estate if the numbers work, as properties will appreciate over the long run - The market is becoming more of a buyers market, which provides opportunities but will require more work to find good deals- Interest rates increasing have already slowed the commercial real estate transaction volumehttps://www.tylercauble.com/podcast/episode174

Key Takeaways:Commercial real estate has been slow to adopt new technologies compared to residential real estateProp tech (property technology) is evolving rapidly, with new tools for things like 3D scans, floor plans, analytics, and moreThe future of commercial brokerage is uncertain but brokers will likely still provide value as advisors on complex dealsEmerging technologies like AI, AR/VR, and flexible/short-term leasing models could continue to impact the industryData quality and accessibility remain issues, with opportunities for new platforms to improve on incumbents like CoStarhttps://www.tylercauble.com/podcast/episode173

Key Takeaways:Industrial outdoor storage properties can provide a good covered land play through cash flow from truck parking and potential for appreciation through different exit strategies like selling to investors, developers, or tenants.It's important to find properties in good locations near major highways and without crime or security issues when evaluating potential sites.Self-management is possible but requires flexibility and a system to efficiently handle tenant issues as they come up. Outsourcing management tasks can help scale the business.Utilities, taxes, insurance and management are the main ongoing expenses, while truck space rentals around $175/month each can provide good gross income if the property is mostly leased.https://www.tylercauble.com/podcast/episode172

Key Takeaways:- Marketing is crucial for commercial real estate investors to raise capital and find deals- It's important to determine your target audience and understand their perspective- Building trust and credibility is important, especially without a track record of success- Consistency and quality are important in marketing, not just quantity across many channels- Telling your story through various mediums like photos, videos, newsletters is effective- Offering memorandums should clearly convey opportunity, team, risks, projections to investorshttps://www.tylercauble.com/podcast/episode171

- Nashville was named #1 city for emerging trends for the third year in a row, which is unprecedented- The city is investing billions of dollars in major projects like the Titans stadium, airport expansion, and East Bank redevelopment- Mobility/transit is one of Nashville's biggest challenges as it continues to grow rapidly- Office real estate is facing an existential crisis as work habits change, and will need to evolve significantly - Nashville has a shortage of affordable/attainable housing that will take continued investment to addresshttps://www.tylercauble.com/podcast/episode170

One of the most important skills you can have in commercial real estate is your ability to negotiate leases. Whether you're a broker, business owner, or a landlord, your negotiation skills can be the difference between a successful deal and one that can come back to haunt you later. Today, we're diving into how to negotiate commercial leases, as well as some tips and tricks we've picked up along the way.https://www.tylercauble.com/podcast/episode169

Key Takeaways:- Tyler's commercial brokerage is aiming to increase sales volume by 500% next year through goal setting and action plans with brokers.- Tyler takes an annual month-long sabbatical in December/January to rest and work on other projects.- The commercial real estate market outlook seems gloomy according to Tyler and other investors on the roundtable, with defaults expected to double in the coming months.- Office loan defaults are around 87-89% already, which will likely cause issues for banks.- Tyler recommends prospecting for off-market deals by handwriting letters to 600 property owners and following up quarterly for potential leads.- Tyler's underwriting process is very conservative, targeting a 12% cap rate and stress testing for downside scenarios. He is currently only looking at deals that cash flow from day one.https://www.tylercauble.com/podcast/episode168

When you're first getting started in commercial real estate, it's important that you focus on a specific type of commercial property - office, retail, industrial, hospitality, etc. Doing so will allow you to go an inch wide and a mile deep so that you can better understand how that one property type works and branch out from there. But which type of commercial property should you focus on? Today, we're diving into the asset types that we like to buy and why we decided to focus on those properties.https://www.tylercauble.com/podcast/episode167

Key Takeaways:Tyler visited a large office building in Dallas that was converted into corporate co-working space and thought it showed the future of office space. He thinks gas stations, especially in rural areas, can still be a good investment even with the rise of electric vehicles since many vehicles and equipment won't be electric anytime soon.He recommends always doing a Phase I environmental report for commercial real estate deals to understand any contamination risks.He thinks value-add deals that require renovations can be a good way for first-time commercial real estate investors to build wealth faster than with passive triple net lease investments.https://www.tylercauble.com/podcast/episode166

Commercial real estate is a capital intensive asset class, meaning it takes a lot of money to pull these deals together. But you, personally, don't have to have that cash on hand in order to pull these deals off. We're diving into utilizing commercial real estate brokerage as an income stream and how to start buying commercial real estate investments even if you're broke.https://www.tylercauble.com/podcast/episode165

Key Takeaways:Tyler is getting his general contractor's license because he has found many general contractors to be incompetent. He is flipping his first house after the original contractor went bankrupt.He thinks Birmingham and Huntsville, Alabama are good markets to invest in.When starting in development, he recommends finding an experienced developer to mentor or partner with.For marketing commercial space, he recommends strong SEO, videos, floor plans, social media, and working with the local economic development department.https://www.tylercauble.com/podcast/episode164

Commercial real estate brokerage is one of the best paths to take in the commercial real estate world if you're just getting started. Not only will you learn how these deals get done from the ground up, but you'll be able to get paid doing it and make many good connections along the way if you decide to transition into the investment or development side of things. Today, the brokers talk about how they got started as commercial real estate brokers and offer their advice for anyone looking to break into cre.https://www.tylercauble.com/podcast/episode163

Key Takeaways:Tyler is most bullish on flex industrial properties going forward due to high demand and lack of new construction.Tyler thinks interest rates could drop before the 2024 election but is planning for rates to stay higher for 12-18 months. Finding good deals is one of the most important skills for commercial real estate investors.Building relationships with sellers, lenders, brokers, and contractors is important through regular communication.A downturn in commercial real estate is anticipated in the next 6 months as consumer debt levels rise.https://www.tylercauble.com/podcast/episode162

Imagine the reverse 1031 exchange like trading cards. You have some cool trading cards and you want to swap one card for another, but you don't want to pay any money or taxes for it. Well, that's kind of like what a reverse 1031 exchange is in real estate.https://www.tylercauble.com/podcast/episode161

Key Takeaways:- It can be advantageous to pay cash for land/property and then take out a construction loan against it rather than bundling acquisition and construction into one loan. This makes the financing process easier for banks.- Industrial outdoor storage is a good "covered land" investment that provides cash flow while waiting for future higher/better use development.- When evaluating value-add deals, Tyler looks for 18-22% IRR and 20% annualized cash-on-cash returns over 3-5 years.- Tyler sees opportunities in high-end residential house flipping over the next 2-3 years given the strong housing market, with margins of $50k-$150k per flip.- If Tyler had unlimited funds, he would not syndicate deals and prefer to execute them solely with partner(s) who handle the capital/financing aspects.https://www.tylercauble.com/podcast/episode160

In an era driven by technological innovation, AI has emerged as a game-changer, transforming industries across the board. Let’s dive into the intriguing realm of commercial real estate and AI, uncovering how this powerful combination is reshaping the way we analyze, manage, and invest in properties.https://www.tylercauble.com/podcast/episode159

Key Takeaways:Triple net leases are a good investment option for beginners due to lower risk.It's important for leasing agents to understand commercial real estate valuation and underwriting to negotiate better deals.Flex industrial spaces are a relatively lower risk investment opportunity currently.Building a personal brand and commercial brokerage are good business models for earning income without large capital.Micro-unit developments can lease up faster at lower risk than larger units.https://www.tylercauble.com/podcast/episode158

Commercial real estate investing is an excellent way to earn passive income and build your wealth, but it's certainly not without its challenges, especially if you’re a first-time investor. Here are 5 of the biggest mistakes I’ve seen that first-time commercial real estate investors often make.https://www.tylercauble.com/podcast/episode157

Key Takeaways:Industrial and retail properties are recommended asset classes to invest in currently, while multifamily, office and hospitality face challenges.Flex industrial properties can still make sense to develop since demand is high and projects are pre-leasing.Deal structures can be creative, like carrying back financing from sellers, to make deals work in the current environment.Networking to find investors is important, and skills like deal sourcing and underwriting are valuable to bring to partnerships.Highest and best use analysis through a yield study can help identify future redevelopment potential on a property.Environmental reports are a cost of doing business when purchasing land, and negotiations may be needed over who pays.Building on leased land long-term is generally not recommended due to not owning the underlying asset.https://www.tylercauble.com/podcast/episode156

Raising capital is never an easy feat, but it can help you scale your real estate investments and buy bigger properties than you could on your own. The investors round table discusses how they find investors, pitch these individuals / family offices / funds on placing capital in their projects, and best practices for beginners that are looking to bring private investors to the table on their deals.https://www.tylercauble.com/podcast/episode155

Flex industrial is a wonderful side of commercial real estate to invest in - especially for beginners since the asset is typically easier to manage with low-maintenance tenants. Today, we're diving into everything you need to know about flex space for beginners with Hamza Ali, who is a seasoned commercial and residential real estate investor with an investment portfolio of over $270M in flex space developments in Texas. https://www.tylercauble.com/podcast/episode154

Raising capital can be tough, but it doesn't have to be. Dr. Adam Gower has helped syndicators raise hundreds of millions of investor capital through his crowdfunding platform, Gower Crowd. Today, we're diving into the ins and outs of crowdfunding for commercial real estate, how crowdfunding can help you close on you 1st or your next deal, and any challenges or pitfalls that new commercial real estate investors should be aware of when using this deal structure.https://www.tylercauble.com/podcast/episode153

Collectively, this group has syndicated hundreds of millions of dollars of commercial real estate projects across the country. So today, we're diving into how we got started in syndication, the pros and cons of utilizing this real estate investment strategy, and how to get started if you're interested in syndicating your own deals.https://www.tylercauble.com/podcast/episode152