All Forum Posts by: Joel Owens

Little to no activity equals PRICE, CONDITION, or BOTH. Blaming the agent is just a scapegoat response. Even if the agent sucked and the price was good you would still likely have offers.

Being it's in your in-laws would not touch the situation with a ten foot pole. Sometimes financial gain is not worth what is attached to achieving it. 

I don't want to say this but BP in a lot of ways has turned into a spam fest now. I liked the old days decades ago for the site. Most of us no longer post as we are so busy with our businesses, semi-retired, or retired.

I am still active but only work about 25 to 30hrs a week. Turned 50 this past December. Time catches us all regardless of the net worth or liquidity number. The young bucks trying to make the first 100k to 1 million are after that initial investment high of success. They tend to work any hours 60,70,80 a week to try and achieve it. Later on in life when you have a family yourself, aging parents, etc. how you live is different. TIME becomes a primary focus and making sure you live life daily that makes you happy and not necessarily the most money. You can become a slave to the machine of trying to create more money at any cost ( health, family, friends, etc. ) all to try and hit a certain number and say you did it. That hedonistic high wears off pretty fast and is short lived. Altruistic giving back when you have more money than you need tends to have more longer joy and happiness attached to it.

On coaches most of them are (system packagers) where they regurgitate information put together in pretty bow to wow people that this time they will be successful if they just buy this stuff. Why do they do it? Most do it for recurring revenue while they source deals. They also take the students as use them as ( ants marching ) to source deals hoping they dig up a diamond as sourcing is the often the most time consuming part ( finding the deal ).

I do not mentor people by choice with the coach stuff. LP's that invest with me on my syndicate NNN deals learn as they invest with me as I answer some questions along the way. Same with clients where I am the principal broker and buyers want to own 100% themselves instead of the syndicate or they want to do both. I help with that but I don't sell programs or pack people in a room to sell them a system.

Someone highly successful just does not have time for that on a consistent basis. Even if they create the program they have the grunt workers pushing the daily training. 

If I make 200k per transaction own direct or up to 1 million in total value for each NNN property I syndicate I have no interest in selling a 10k or 20k program because I know the amount of work that person will expect from me is a ton. Doing that would COST me a bunch of money in the TIME suck. People that might be worth 100k, or 300k the 20k is a ton to them.

It's not like they are someone making seven figures per year already.

If you want a mentor really deciding the asset class you want to specialize in and finding someone more local to your area can be KEY. Often the cost is striking up a friendship, doing small tasks for them to lighten their load, paying for a lunch or dinner to gain knowledge, etc. If they see that fire in you ( which is typically 1 in 1,000 ) they might see you as someone worth pouring into for the next generations of investing. Highly successful people don't want to keep the knowledge to themselves. They want to share it but make sure the right and motivated people who will cherish it and use it are found before expending time and energy on them.

All these package programs tend to be more national in scale because they want to appeal to the broadest audience to BUY IN. Biggest net = more fish to feed on.

Local tends to have more specialized knowledge how that market works on a detailed level. I am talking in generalities and NOT about the poster starting this post with her company association. I know nothing of that company.

A mentor program is not a quick fix for wealth. In fact personally I believe in a lot of ways taking the time to read and put in the work yourself shows you are ready for the journey of success not only in real estate but in life. It's okay to have a guide but they won't do the work for you. Once your wealth gets substantial I find many people want the simple life. It's not about the highest return. It's about the perceived safest return on investment and the one that is the most headache free. 

Lookup up your regeneration of capital monthly and yearly. If your net worth is 100k and took you 10 years to build up and now someone wants 25k of that for a program that might not work out the cost is too high. You could use that 25k to buy your first property ( hopefully correctly ). If you buy the wrong one it could derail you for a decade. Sometimes the smartest move is no move at all until better opportunities come along. 

If you are sitting on millions and want to take a flyer on a 25k program then if doesn't work out it becomes a potential tax write off and income from business or other investments typically makes it up in very fast time if you have millions out already invested.

Investing school of hard knocks 21 years so far.

Good Luck

Been in commercial real estate 21 plus years and a specialist in NNN.

Investors getting started look at dollar stores as they are often only investment grade tenants in those tiny price points. 1 million dollar NNN like 100k house. Nothing much good in that range and when there is it goes for cash fast.

Most dollar stores sheet metal sides and back in junk areas. You are collecting a cash flow stream from an investment grade tenant but the property itself for land and building is almost worthless when it goes dark if they do not renew the option periods.

If the DG is NN lease the tenant will limp along repairs and then go with new developer for new building rather than exercising option and having to pay all that capex coming due. The sheet metal building will not be appealing to 90% of tenants that would want to go on the site if any did at all. Often in those small towns if DG vacates no national brands want the site just jo-bob small business owner who wants to pay 50 to 70% less rent than DG did.

The better DG's are buildings in strong suburban markets with upgraded construction or they moved into a vacated pharmacy store on a hard corner. Those are more 2 million and up in price.

These days if someone contacts me to work with them buying NNN I do not touch anything usually under 2.5 million in price. The location just isn't good in the smaller ranges. I believe in the quality of the dirt for location first, then tenant, then lease terms, etc.

You might could say the new lease rate was the BASE AMOUNT increase verbally and then add a percentage rent clause above a certain annual sales threshold. That way if tenant does exceptionally well you both win. If they have a down year the rent is reasonable for them to keep operating. No legal advice given. 

Talk to developers if they like more pro-business states or more red tape. They can build 3 to 4 commercial properties in Texas versus the same time doing 1 in CA.

By factor of belief systems they can generate almost 4 times the return in the same span. It's easier to sell properties in pro-business states as investor buyer pool is larger.

I have talked to thousands of millionaires over the decades and not that many like CA or want to invest there. Heck even clients I get that live there sell everything off but their house so if it gets too bad they can easily leave.

Lots of people there are mild to middle socialists but not extreme socialists so when a state starts trending that way it becomes too much for many of them. Of course there are some nice parts of CA. We visited there speaking at a conference many years ago about NNN properties.

The weather is nice and food is good but cost of living very high along with the taxes. Also get the strong winds and the fires which can be a major concern.

Right now at this very moment if I worked 70hrs a week I could make 20 million a year income but once you have so much money and get a certain age the TIME becomes more important and how you want to MAKE YOUR MONEY. It's not just about the most returns it's the life of the investor behind those returns and how active or passive they want to be to make that money.

In my world people are making millions to tens of millions a year income and they want no headache returns. You could present a hard 10% annual return or an easy 6% and they would take the 6%.

20% return on 100k dump house and area is 20,000 a year. Not living well on that. 2 million invested at 6% a year is 120,000 a year. In most places can live well on that. So as people's net worth grows they no longer want to deal with headaches and want to go passive. They want to enjoy the fruits of their labor.

If an investor hasn't been in real estate for many decades they are often just making investment decisions with spreadsheets and data. Later on when they get extensive knowledge it's more about their vision for daily life that gives them the most joy and building an investment plan around that.  

Its not about how much money you make. It's about the life you want and the vision for it going through the journey creating lifelong memories that gives people lasting happiness. Money returns are hedonistic in nature. Sure I make money on syndications as a GP for NNN properties but I also love helping people and feel great where we all make money together.

It's when syndicators set a certain money number of net worth benchmark by a certain time and they do anything to try and get there is where they can lose their soul as a human being.

At that point money becomes their God and everything else be damned. Those are the type in general you should definitely stay away from.

We live in a false world where lots of people are selling quackery and smoke and mirrors in the name of making a dollar.

Should syndicators know interest rates where going to double n just a few years? Looking at history that was not very likely it would rise that much and that fast. When investing in syndications if someone is using debt on a project you the LP investor better understand every nuance of that debt with the loan abstract and the covenants. The debt can derail the deal later on when debt service rises or a call in the market forces a sale at a non-optimal time. If people get debt it's better to often have 10 year fixed debt you just have to watch out for yield maintenance or defeasance for insurance companies or CMBS type debt. The cost to break those loans early is huge.

Instead if people feel rates might go down some in the future then loans with short pre-pay penalties or no pre-pay penalties might make better sense. I am not a fan of interest only or shorter term loans unless the income is expected to double for NOI then even with high interest rate rise upon stabilization you can still refi or typically sell with some profit.

On minimums our minimum right now is 300k per investor per property.

As a syndicator and being in NNN 21 years I value more the long term accredited syndicator investor. I want more the ongoing relationship to scale together versus the spreadsheet investor that only looks at our company as a diversification tactic.

Himali typically unless this is a TIC model ( usually where each individual investor or entity gets a voting right ) then NO you likely cannot force a sale.

You would have to get an attorney to review all your docs for thousands in costs to give a legal opinion and reality of trying to get some money back. Usually there is language in the investment that you understand all potential loss of capital is possible. You are an accredited investor correct? If they did offering to non-accredited investors then there are more rules and processes to follow because those investors are not normally classified as sophisticated when it comes to  investments and have additional protections sometimes.

In the future when people invest PLEASE look at the property and what debt the syndicator is using and if their numbers seem realistic or not. If the heavens and the stars have to align perfectly for the stated outcome to happen then you have minimal upside and huge downside risk. No reason to do those deals there are lots of syndications that do not use those models.

A potential 1 percent more return on paper annually means nothing if it doesn't happen and some or all capital is lost.

You need to first look at your investment amount (50k,100k) versus your net worth and what you make per year. If you make 300k,500k, 1 million a year it's not worth pursuing the 50k in time and cost. Getting say 25k back minus 5k legal in 12 months time could use 500k worth of your earning time and cause lots of daily stress.

A syndicator in this situation might just want to give high equity on better deals they are syndicating now to those that have had losses on their other deals to try and make up for it.

Since the syndicator is likely under water are they giving away their pref or return of the fees they made in exchange for a capital call for a potential sinking ship?

It seems that if the LP investors are asked to do more to save a project then the syndicator should give up their benefits and use it as a learning experience.

People need to remember short term floating debt or fixed for low years is not good in most cases. If debt has to be ran and re-ran multiple times and tweaked with number projections to work going in that is a time bomb and recipe for disaster in the future. 

My accredited investors like higher yields of course BUT ONLY when downside protection is factored in.

I have found the newly accredited investors not always but many times to be unreasonable. The ones that make 200k or under a year and want that 300k invested to do miracles or magic. When they do not find that with me or other realistic syndicators they get sucked into they must have landed the one company that has the magic pill (returns) they are looking for. Often what they get is marketing that looks like a diamond but performs like a lump of coal.

I like the accredited investors that make many millions a year from their job or business. Investing larger amounts is fine with them and they put more emphasis on experience of the syndicator over a higher return for cash flow because they already make tons of cash annually. What they are interested in is lower risk investments with safer yields that that hopefully outpace inflation and if get lucky also have some equity growth.