All Forum Posts by: Joel Owens

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. 

Lived in GA my whole life almost 50 years now. Woodstock one of the safest cities in all of GA. Nothing here is cheap. Hard to find anything below 350k here now. All those other areas you mentioned are expensive as well. You are mentioning highly sought after parts of GA.

I do commercial real estate over 20 years now specializing in NNN properties.

Don't expect monster cash flow here for residential. It will likely be more rent growth and property appreciation over time.

When I sold my starter house here in Canton next to Woodstock it sold for all cash in 3 days. New York buyer moving here with a family. To them 500k is cheap. Growing up my mom and dad built a new house in the 1970's for about 39,000.   

If national investment credit tenant even if sales not disclosed in lease often in their corporate website stock disclosures you can find data average store sales overall and then sometimes per store.

If no credit you need sales disclosures as tenant strength is weaker. Without sales I can't measure how they are performing with rent to sales ratio.

I won't rent to no credit tenants that will not disclose sales. You will have to ask for it anyways if they have trouble and ask for reduction in rent etc. If they disclose quarterly you get tailwind in advance there is trouble and try to get them back on track or know way in advance they won't make it so can start early to line up another tenant. 

If they are truly broke it's a waste of time. If they are not responding they might not know how to dig out of a perceived hole with the landlord.

If their business is no longer viable then maybe trying to get a payment for settlement in full.

When tenants mom and pop try to go out in retail centers the goal is to try to collect enough to cover attorney fees for an (offer in compromise).

If it was flex space they likely had little money. Most of these small business owners live hand to mouth and are not worth chasing. You could do a letter or something not much time and cost to see if they bite. If they have to be pursued constantly sucking away time and money then usually best to let them go.

To me time is money about 3,000 an hour. I rarely have any tenant defaults these days on commercial side as credit is super strong and I am picky on deals I buy. I like looking at the lake in my backyard too much to want to eat time chasing default business owners who owe money.

Is this tenant first location concept? Is it franchised or mom and pop.

Your lease is meaningless if they go dark quickly. You will then be out attorneys fees, TI, and leasing commissions. You also do not have to accept whatever language they have for assigning. You could still keep them guaranteeing the lease even if they sell the business.

You do not want them selling to joe blow that runs it in the ground and goes dark. You want them on the hook with double guarantee until new owner demonstrates strength as an owner operator tenant. This is especially true when whoever they are selling the business to is weaker or the same strength of guarantee.

If it's someone much stronger then obviously do not need both. Check if their liquidity and net worth is a cash position or mostly retiree funds you can't touch. If they go dark do not plan on getting paid fully for the lease if smaller tenant. Usually best to settle or they file BK and landlord gets very little to nothing.

Have in lease they have do disclose sales quarterly. There are 100 plus other things that go into it. Good luck   

So as a general example 2 funds aren't doing well and you go open a 3rd fund? Sounds like the government the current programs aren't working so lets open up new programs under new names and forget about those other ones.

Ok I have been in commercial real estate for 20 years. I have been at this site from very early on and watched it change over the decades.

I would not say a BP convention has no value. It just has different values to different people based on the point in their investing careers.

People that already have high wealth for many it's not the best use of their time. It's more for the starters making the first million or two. Back in the old days on here we learned on the forums and put into practice there were no conventions. The cost of a convention folks to put one on is very high. To sell tickets often conventions pack as many speakers as possible to prove value.

I used to go speak at conventions ( not BP ). They were investors doing side BP conventions before it was an official thing and when you have 30 to 45 minutes to speak it's just not a very long time. I like to vacation with family. I don't like to mix business but that is just me and my values. To others it's a 2 for 1 kind of thing. I would not go to Mexico for free with all that crime and gangs.

I found I can be interviewed on 10 different podcasts shows from the comfort of my house and they do all the editing and promoting the episode to their followers. I have maybe 14 hours into the 10 shows of time.

I do think these conventions ARE GOOD for newer people wanting total immersion on a bunch of different topics to see what peaks their interest and to make connections with others. Some people need a bunch of connection for motivation and others are self-starters needing very little to get going. Both are fine just different in approaches. Just like investments there are tons of ways to exist and do business.

Time can change people. As you age money becomes less of a number one spot motivation to experiences and memories. Working long hours tends to lose it's luster.

Being in the NNN space for commercial for passive wealth I have talked with thousands of millionaires over the decades on the phone and built lasting relationships. You get to talk to all age groups and walks of life. You hear their life stories and learn so much more about life than another dollar.

I get the hunger to escape the rate race wanting more. That was me 20 years ago with not 2 pennies to rub together. That was also similar to Josh starting this site trying to get ahead. Everyone wants a better life for themselves and their families. It's human nature. 

The first million is the hardest. The next couple million tend to get easier. The reason is you have knowledge and experience and tend to mess up less and make more informed decisions. You tend to have breathing room to cover living expenses and more time to think on next investments to scale and grow the portfolio.

That's very hard to do when trying to scratch and claw to get a start wondering where money is coming from to eat and pay the bills to survive another day. Money means nothing without your health, time, and family to enjoy. I have seen wealth at all different levels. At the core when you strip the money away people are the same. They did research with poor to middle class people and the wealthy.

About 85% said the same thing they valued memories and happy experiences with friends and family. They wanted people to think well of them being a good person. That is what fulfilled them regardless of net worth levels. People want a purpose and to be happy day to day. Becoming wealthy doesn't change their core it can just help them live their ideal life on a daily basis. I am living proof of that.

So if you see value in the convention then go for it. Have a great time and make connections.

I might eventually do a convention solely on NNN I put on but it will be in GA.

Bigger Pockets is more global now. It's not worse or better just different how it has evolved over the decades. 

Typically higher exit splits are given to investors who throw in lots of their capital with class A shares.

We usually have 70/30. 70 to LP and 30 to GP. If someone is investing many millions to tens of millions and up then can have a different conversation.

Some syndicators starting out might give away the farm to just get going but if they start showing success their cost of capital usually goes way down.

So their are some LP's worth 50 or 100 million that know how to evaluate deals and might take a cheap flyer like 50k or 100k into these newer GP's if they feel deal on its own strong and the new GP just got lucky to find great property at great price. They get high equity upside split that way. To them the LP it's often fun money. They might double the 50k or better or lose it all but can just get tax write off and then make it back in one month or less. They might put a few million each year into higher risk investments just to gamble.

It's all about the level of the LP and their sophistication with portfolio and investment strategy.