All Forum Posts by: Joel Owens

I am talking in generalities. Lots of MF syndicators are getting hammered by massaged debt and rosy pro-forma's to be able to exit or refi in the future from planned improvements and rent growth.

Instead pay all cash and you can decide when time to refi or sell and not your lender telling you what to do. It's what we do on our NNN syndications stabilized and value add. We raise all cash deal to deal.

WHY do people use debt then for syndications? It allows them to pursue bigger deals for less of a raise and stack lots of properties hoping some will be winners and not losers.

Hopefully you did not pay too much for the dirt. 1 acre is optimal these days because of desired double to triple drive thru for QSR.

It can become a problem because if they make the building smaller you get less rent but they do more sales.

Example a QSR used to be 3,000 to 4,000 sq ft but now instead wants double drive thru's as not many go inside for fast food like pre-covid.

If you get 1,000 a foot less at 30 a foot you just lost 30k NOI and now at 5 cap example paying all cash NNN once developed you have lost 600k value.

It can fine as long as you do not overpay for the land. If you paid like 750k or 1 million that could put you in a bad spot if tenant wants to own the dirt rather than lease.   

Hi Christian,

Sorry just seeing this post. NNN 20+ years

People work with me exclusive with written agreement to buy NNN.

If people want to just talk, explore NNN rate is currently 1,500 for 30 minutes or 3,000 for 1 hour on the phone.

If they sign agreement and buy something and we close where I make my fees then I give credit for consult fee.

My time is very valuable.

Good luck  

NNN 20 years + investor and broker.

Usable dirt it sits on size ( 1/2 acre ok, 3/4 acre good, 1acre plus best ) and parcel shape (most of it road frontage for land or is it narrow and deep? regular rectangle or square size or irregular?)

Tenants are looking for parcels that fit in their ideal box size layout for building and parking spaces requirements with any drive thru's wanted. The tenant is not as much focused on rent when they are strong regional to national in nature but the best spot they believe drives the most sales and profit annually.

It's the lesser quality smaller tenants that are more sensitive to rents because their model is not often proven with scale or over time as much.

So you have to know what you are buying and what to do with it.

I buy same stuff for cash but I am the GP on the syndications and my LP's put in minimum 200k per deal as accredited investors.

To convert the bank to medical would be very expensive. If the bank is a certain age of construction most tenants want it torn down and build new. This all comes with time and experience. After you buy many dozens of these nationally you learn which ones are hero's and zero's.

If you take 750k of your money to buy cash but you have little experience your risk profile is very high. If you invest with someone doing it for decades at 200k or more your risk can often be way reduced due to the knowledge of the sponsor. You can learn from the sponsor on the deals and then go out on your own if you desire or later decide you are happy to keep investing and not put in the work yourself. It is WORK to turn these properties around. Often not as much as retail centers with lots of property management but still takes work, knowledge, and skill.

I have a whole process I have developed to assess risk.

Hope it helps 

Steve Mashura,

NAR partners with businesses to peddle whatever wares to newly licensed agents as a benefit that sucks them dry of any start up money.

NAR has some lobbying efforts that help with legislation from time to time but other than that pretty worthless.

I was REALTOR first year in business over 20 years ago and saw no value. Have been principal broker in commercial real estate for decades.

Moderators are volunteer. We have no say in matters like these. That would be for Scott Trench the CEO to comment on.

Josh the owner of the company Bigger Pockets is retired for the most part. 

Bigger Pockets can't stop sponsors from going on other sites (podcasts). It's up to the individual accredited investor to perform research and make an informed decision.   

Here are 4 levels lowest to highest.

1. Property management - major time suck and investors constantly want the world for service and low money

2. Leasing residential or commercial - pays decent but often in commercial longer timelines to make money as tenants can take awhile to decide on a location. Residential you can get capped on how many rentals with time you can do.

3. Brokering sales commercial or residential. Top residential brokers without teams on sales typically do about 300k to 500k ( New York and CA would be different as more money made but also lot more money spent on listings not sold so can lose your butt or do well). Commercial individual can make millions per year as a broker with experience.

4. Syndicating deals as GP with LP investors ( Make money fees buying and selling along with management, some of the cash flow and upside as well.

My brokerage it's just me because I did not want to babysit lots of agents it's not my thing. I know some brokers that take support calls for their agents and make 200k to 300k a year and play golf and vacation rest of the time.

Do you have enough years in to take the broker test or have you already passed that and are an associate broker at a firm?

Principal broker 20+ years in commercial real estate. 

Ethan likely best for you is to keep working capital to grow your book of business. Then eventually move up where you hold your license for better splits or go out on your own.

Once you have solid foundation then start investing more.

You did good saving up some money but if you buy the wrong investment could sink you for awhile.

Example if I put 1 million dollars into a property that gives me 6% I make 60k a year. How much can I make putting 1 million into my business? I have not put that much in before but likely make 20x on that in 1 year. So you have to analyze active versus passive investments and how you want to allocate your time for your overall short and long term investing and career plans.

Good luck

Just to give an idea one of my residential agent friends listed a house here recently for 2,400 sq ft for 650,000. Not a new house either but sitting on larger lot in Canton about 10 minutes from Woodstock.

I have lived in GA all my life and have never seen anything like it for the growth. I only drive on the interstate when I can use my peach pass or you will sit in traffic for hours barely moving.

Lots of CA and NY buyers moving away from political views and government changes they do not believe in. It's causing an up wave of price increases here. The first time homebuyers get priced out of the market because the all cash buyers moving in from out of state gobble the properties up. So that will have more first time buyers looking for years and have to keep renting because they can't afford the higher priced homes they want with current interest rates. Some home builders are eating profits buying down the rates with the lenders to get into the 4's or 5's fixed but it comes at a steep cost many tens of thousands in fees upfront to the lender. The cost of labor and materials now is insane.

The type of work on my custom house is about 400 a foot. Cheap box builder grade trash they are building now is about 250 to 275 a foot. The builders basically throw veener stone and brick upfront to make look nice and put laminate and crap like that inside. It's all junk that will fail fast.

Pre-corona homes tend to be built way better and you get a bigger lot.

If you are holding these for decades then rent growth and appreciation over time should be there but nothing is guaranteed.

GA in some areas has low crime, good schools, and weather. There are plenty of crap hole areas though. The upper ring MSA suburban areas above Atlanta tend be better. Still some good ones on the lower ring but not as many.