Moving from Residential to Industrial Real Estate Investing
Apr 23, 2024
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Jonathan Hayek, a former teacher turned industrial real estate investor, shares tips on transitioning to commercial real estate. Topics include the challenges of moving from residential to industrial properties, financing considerations, underwriting processes, maintenance strategies for industrial buildings, and negotiating rent increases in commercial leases.
Transitioning from residential to industrial real estate for lifestyle freedom and decreased management challenges.
Thorough due diligence, calculated risk-taking, and expert guidance are crucial for successful industrial real estate investments.
Deep dives
Transition from Residential to Commercial Real Estate
Starting as a special ed teacher, Jonathan transitioned into real estate investing for lifestyle freedom. Residential properties helped him build capital, but the management challenges pushed him towards commercial real estate. His journey from an office building to single tenant industrial properties showcases a shift towards less management-intensive options.
Learning about Industrial Real Estate
Jonathan learned about industrial real estate through mentors and a local broker. Lack of resources for non-residential real estate led him to create his own podcast. Surrounding himself with experienced individuals and being part of a commercial real estate mastermind helped him gain confidence and insights into the industrial sector.
Dealing with Environmental Concerns in Real Estate Investments
Jonathan's experience with a property containing potential environmental risks highlights the importance of thorough due diligence. Despite facing a 'dirty' phase one environmental report and the need for a phase two, calculated risk-taking and expert advice led to a successful investment outcome. Addressing contamination risks and seeking professional guidance helped mitigate uncertainties.
Lease Negotiations and Investment Strategies
Jonathan's approach to lease negotiations involved balancing rent increases to market rates with tenant retention. Front-loading free rent periods or tenant improvement allowances can help maintain NOI levels while achieving desired rent escalations. Considerations around lease extensions, capital budgeting for property upkeep, and investor collaboration were pivotal in managing successful commercial real estate investments.
In this interview I was joined by Jonathan Hayek from Endurance Properties. Jonathan shared his story on how he transitioned from residential to industrial real estate investing and also provided some tips on how others can do the same.
About Jonathan:
Worked in the teaching and non-for-profit world for ~10 years. While still teaching, started flipping houses and investing in small multifamily to pursue financial and time freedom. Now an owner/operator of multi family, commercial, and industrial real estate as well as the host of The Source of Commercial Real Estate Podcast, the leading interview-based podcast dedicated to non-residential commercial real estate.
Connect with Jonathan:
LinkedIn:
/ jonathan-hayek-cre
Podcast: https://podcasts.apple.com/us/podcast...
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📢 Join the Industrial Insiders Community: https://industrialize.com/membership
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