Commercial Real Estate Investing From A-Z

This is our December 2020 Mastermind call. Our guests were Todd Sulzinger (mobile home parks), Victor Menasce (development, various asset classes) and Adriana Finnie (single family investing).You can read this entire interview here: https://bit.ly/3mFeOCsSteffany Boldrini (Self Storage, Car Washes)I have been dealing with a new asset class that I invested in, and that is carwash. I was put through the wringer right away, within nine days of closing, one of the roofs caved due to snow, money has been already been stolen, and within 20 days of closing, and my maintenance guy quit without giving any notice. Thankfully, I was able to hire someone within a day. I'll be doing a couple of episodes on why car washes, what did we do to them within this last month, and how we are managing it from far away. What I can tell right now, is that it's a very hands on asset class with a lot of moving parts.Todd Sulzinger (Mobile Home Parks)One of the biggest things that is still impacting us is our inability to process evictions. I have properties in Georgia and Tennessee that are landlord friendly states, and in Georgia in particular, we had the courts closed in March, they opened back up at the end of July. And we had to start the eviction process on several people. We had several people that after a couple months process before we got a court date, they moved out just before their eviction was filed. Other people were still going through the process, we've got a couple of tenants now that have been in the park for almost a year that haven't paid rent. And we really have our hands tied.Victor Menasce (Development, Various)We've been busy with a number of new projects. And as you probably know, we also get a fair number of requests to consult on new development. For example we're doing a 150 unit apartment building up in Spokane, Washington for our client, we're doing a 60 unit townhouse subdivision just outside of Boise, Idaho, we are doing a boat and RV storage facility up in Austin, Texas. So we decided to formalize the consulting division and officially make it a core part of the business. And that's going to allow us to train the future leadership in the company. We're not going to accept every client by any means, but only those that we would say are intentionally congruent with that which we're already doing.Adriana Finnie (Single Family Homes)We're in single family homes in California, Ohio, Michigan, and Alabama. We started in California, but in the last three years, we decided that the rules are getting a little too dumb and that it's time to get out. So we've done it in a very leisurely way. We keep waiting for somebody to move, and then we put the house on the market. It has worked nicely until this year when nobody wanted to move for any particular reason. The biggest challenge is evictions.Join our facebook group here: www.facebook.com/groups/montecarloreiTodd Sulzinger: www.blueelminvestments.comVictor Menasce: www.victorjm.comAdriana Finnie: www.linkedin.com/in/adriana-finnie-4578ab12/--- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

In this part I will cover getting the loan for the portfolio of properties, the LLC formation, hiring, as well as dealing with challenges.You can read this entire episode here: https://bit.ly/341nXipLoanThe first lender that gave us a loan approval initially gave us a loan approval with an extremely unreasonable request, which was to basically tie up cash until we pay out the loan, this gave us no reason to get a loan. What I did when I got that news was that I asked to set up a call right away with the loan agent. We got on a call, I explained everything, not only from the property side, but also from my experience side and how, we have a ton of mentors, how I have access to hundreds of people, and all of that. You really need to show them that you are resourceful, that you are a professional and also a lot of times that you were successful in your previous career. It was a quick call, it was I think, a 15 minute call. After that, the loan officer scheduled a call with the president of the bank, and I told him the exact same thing. I asked them if they had any questions, etc. Shortly after that, we got the approval, that was probably the next day or two.LLCFirst I decided to break it down into two LLC's, one for the car washes and one for the Self Storage. This is purely for liability reasons. And with this decision, we had to change our closing date by about seven to 10 days. Because the lender had to rewrite all of the loan documents, the title company had to rewrite everything and divide into two entities. So that took a little bit longer. Ideally, in the future, you need to make that decision in the beginning, because we also had to sign another offer, breaking it down into two entities, even though when I signed the offer, it was under our name and/or assignee, which means we can assign this to anybody.HiringWe had someone in mind, but that person didn't even return my call when I left him a message, and the real estate agent had to remind him to call me back. So that was the very first red flag for me. And then after that, he showed up late for our very first meeting on site. And that was my second and last red flag. Some of you may know this, but there is a saying that says "hire slow, fire fast". You should take your time in finding the right person for the job, and do a really good job with the interview. And there are great resources out there. One of the books that I love is called "Hired", highlight everything that you can in that book, it is super helpful for hiring. And then on the firing fast side, people do not change. And I have seen that over and over again. And because this guy wasn't returning my very first call after we had agreed on him managing the property, and he was also late for our very first meeting, those were huge red flags for me. I decided not to work with that person.ChallengesNine days after closing on the properties, the roof in one of the car washes caved because of snow. Honestly, I was not scared when he told me that. I said, Okay, this is part of the game. Nine days, whoo. I'm thrown in the wringer. I made a claim with the insurance company right away. And I cannot talk much yet about the insurance because the project has not being completed. But all I can say is that I am very pleased with Nationwide, they really are by your side. This company has been phenomenal with the claim that we made literally nine days after closing. About 20 days later, the main maintenance guy quit. I started searching for staffing agencies in the city, posted an ad on Craigslist, and hired someone the next day. It was a blessing in disguise.Subscribe to our newsletter here: www.montecarlorei.com--- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

I will be talking about a project that I have been working on for a year and that closed about a month ago.You can read this entire episode here: www.bit.ly/3g9laZdThis property came into my inbox because I have been getting alerts for self storage properties for sale. It was a portfolio of one Self Storage property and three self serve car washes. It took 84 back and forth email messages, plus some phone calls to get all the information that we needed to analyze the property, to agree on a price, and also one year from my first communication with them to the closing.Things to ask for:- Profit and loss statement- Tax returns for the last 2 yrs- Detailed explanations on expenses- What does it entail to manage and operate car washes- Price for rental units on self storage- Phase I report- A list of multiple questions regarding the property, age of roofs, type of floor (asphalt, concrete), type of building, age of buildings, etcDue Diligence period:- Ongoing list of questions and follow up questions- Recommendations for local lenders and credit unions- Recommendations for local real estate attorney to review title and surveys- How much would it cost to add credit card machines to the car washes- Information for all the service providers that they currently use- Finding a local property manager for both sets of propertiesExample of things that you always must follow up on, until it gets 100% completed:- I had to get quotes for putting internet in all of the car washes for not only the credit cards, but also for the cameras that I was going to be installing. And it turned out that for all of the car washes I had to get a different internet provider because not a single one of them could provide service in more than one car wash, they just did not have service in the other properties areas. That probably took three full days worth of work to find the best internet provider for every single location. - I searched for the best provider for the Self Storage Facility that was 1. affordable 2. could take online rentals 3. could take credit card/bank payments. The previous owner did not have a website, and they were sending out paper invoices to all of their renters. So I had to get someone to create a website for us, and also to be able to accept rent, accept credit cards and also have people be able to lease things online. I found this very young startup that fit every single need for the property. And because they were so young, I really had to beg for them to take me as a customer. And that took a lot of following up, I said, Guys, I'm with you, I know it's not going to be perfect, but I really think we can be a very good first few customers. So let's get this going. And we got them to agree to that. - I had to follow up with the guy that agreed to be a property manager and was not even responding to my phone calls.- I had to follow up with the insurance company, I wanted to continue working with the same insurance that was the provider for the previous owner, because it was a good price, plus that insurance provider already had all of the information for the car washes. After three weeks of not getting a quote and also following up with the agent, she tells me whoops, the underwriter thought this was a renewal and send it to the wrong person in the office. And this was one week before closing. So I started Googling for highly rated insurance providers in that whole area and got quotes from everybody that I could get my hands on, We also had to make sure that this provider was real and reliable (there are horror stories about insurance companies being outside of the country and never paying things out), make sure the insurance provider is rated A++.Subscribe to our newsletter at the top of the page here: www.montecarlorei.com--- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

How should you fundraise? What are the best practices? Ben Kogut, partner at HJH Investments will share his extensive experience with fundraising for syndications. You can read this entire interview here: https://montecarlorei.com/getting-started-with-real-estate-syndication/ Walk us through your first syndication raise. What did you do? How long did it take for you to raise the funds? What were the results? Lessons learned? It all starts with the deal, making sure that the deal itself is solid. And for me, a good deal looks like predictable cash flow. Generally speaking, that means that we have a high credit tenant with a long term lease, or multiple long term leases, something to that extent. And so making sure that all the numbers, the debt, that we structure our deals where we have a high net worth individual sign on the debt, and that the assets are in an area that we think are going to appreciate. On my first deal that started with my relationships. People that I've known throughout my involvement in real estate for the past 15 plus years, plus people that I know throughout my involvement in the community, I basically just started there by talking to people, Hey, here's the deal. Here's what I like about the deal. Here's what I don't like about the deal. And here's what you may expect by potentially investing in a deal like this. But the best advice I could say if anybody's thinking, Okay, I want to raise money or I'm thinking about one day raising money. Then now is the time to start telling people within your sphere of influence. The people that already know that you're a smart, capable individual, and that you're working on a deal, or you have a deal, Hey, would you be somebody that would be interested in investing with me once I get a deal, and I think a deal will look like this, whatever that is. If you're in triple net properties the way I am, or if you're in multifamily, or all the other different asset classes, which there are many. Now that you're raising all of your funds in less than a month, what are some of the best practices for fundraising for a syndication? 1. Putting together a clear and concise investment deck, to make sure that people understand what it is that that we're trying to accomplish. 2. This is a new addition to my practice, I've been putting together a short video where I just stand in front of the property, and I talk about it. What are we seeing here. Some people really care about what the property looks like. Some people could care less. They don't care where it is. They want to know what are the leases, who are the tenants, what are the terms? What kind of debt do we have? If I am going to put this much money in, how much am I going to get out and when. I'm trying to provide that type of data to a broad range of people. 3. Communicating with with your investors. Right now we have upwards of 180, or close to 200 existing investors amongst our portfolio, that's always the best place to start. 4. Another piece of advice I could give people, that I struggled with at the beginning, but is really good advice that someone gave to me is to be indifferent. To be indifferent to whether or not somebody invests in that deal or on you. Completely indifferent. I really do not care if you invest in this deal or not. It really set me free, it really takes the pressure off. I don't want anybody feel pressured to come into a deal. Ben Kogut www.linkedin.com/in/benkogut www.hjhinvestments.com Subscribe to our newsletter here: https://montecarlorei.com/ --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

What are the legal aspects of forming your LLC when investing in commercial real estate? We are talking with Garrett Sutton, a corporate attorney, asset protection expert and best selling author who has sold more than 900,000 books to guide entrepreneurs and investors. You can read this entire interview here: https://montecarlorei.com/llc-strategies-to-protect-your-real-estate-assets/ How should a real estate investor organize their LLC’s for best protection? We like having an LLC set up in the state where the property is located. If you buy a property in Oregon, we set up an Oregon LLC to be on title to the Oregon property. And in all 50 states if a tenant sues, or the law where the property is located is going to apply, if we have a number of LLC’s and we want to protect against the outside attack, that tenant suing is the inside attack, they have a claim directly against the LLC that holds the real estate, the outside attack is you get in a car wreck. It has nothing to do with the real estate but your insurance doesn’t cover the claim. And in that case, we like Wyoming and Nevada to own the Oregon LLC. If you have a property in Utah, we’d have an Utah LLC. Let’s dive into all of the documentation that you guys will be sending us after an LLC is formed. We submit the Articles of Organization to the state. It’s a very short form because this one document is a matter of public record. Anybody can look it up and see what’s on it. We don’t want to put too much information on that. Then behind that public document, you’re going to have the Operating Agreement, which is the roadmap for how you’re going to operate the LLC. Who are the members of the LLC? What percentages do they own? When are we going to have meetings? Can we have telephonic meetings? The Certificate of Formation comes back from the state saying, Yes, you’re formed, and the filing. The EIN stands for Employer Identification Number. That’s like a social security number for your business. We also have minutes of the first meeting. The membership certificate is like a stock certificate. How does an investor pays himself with an LLC? If you have real estate, and you’re just holding and receiving income from real estate, and we consider it passive, then the money would flow from the LLC to you as a distribution and you’re going to owe tax on that as well. You’d write a check from the LLC, to you personally and then you would cash that check and put it into your personal bank account. So we’d have money coming into the LLC from rents, let’s say you own a duplex, the rents come into the LLC, you pay all the expenses at the LLC level, and then you make a distribution from the LLC to yourself.  What else is important for our audience to know? 1. Every year you have to pay a fee to the state, like we mentioned, Wyoming is $50 a year. 2. You have to have a Registered Agent in the state where you’ve set up the LLC and a state where you’ve qualified to do business, like a Wyoming LLC qualified in California, you’d have to have a Registered Agent in Wyoming and California in that case. 3. You need to have the separate bank account, as we mentioned, you can’t co-mingle funds. 4. You need to do the minutes every year. 5. You need to make sure that on all documentation, you’re using XYZ LLC and you’re signing as manager, not as a personal owner of the property. Garrett Sutton (800) 600-1760 www.corporatedirect.com Join our newsletter here: www.montecarlorei.com --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

This is a transcript of our 4th Mastermind Call with a group of experienced investors to understand where each investor is and how they are dealing with the Covid-19 lockdown and its consequences. You can read this entire episode here: https://montecarlorei.com/mastermind-call-what-are-top-investors-doing-during-this-crisis-multiple-asset-classes/ Self Storage and Retail Going into month 7 of the quarantine in San Francisco, some places are being allowed to reopen at limited capacity such as nail salons and hair dressers, still there is no indoor dining allowed, although restaurants may be able to reopen at 25% capacity at the end of the month. A lot of restaurants and boutique gyms have permanently closed. There are a lot of vacant retail space for rent in all areas of the city. As far as housing, new, high end condos that are located near the large company offices are selling for 25% less than a year ago. Apartments for rent are between 15-30% cheaper than this time last year. Mobile Home Park Operator He is seeing that buyers are taking a little bit more time and there seems to be less frenzy about trying to acquire parks. A lot of people are looking, but they’re taking their time to buy. Part of it is that without that sense of a frenzy, people feel like they can take their time, it’s not as critical to get an offer out and to get a park under contract because they think it will still be there a month or two down the road. And that’s combined with some sentiment that people feel like they can wait for a little bit and hope that they might be able to find more motivated sellers over the next three to six months. Multi-Family Investor He is also taking it slow and being patient. He was starting to get a little bit more comfortable with everything around August and started to be a little more aggressive in the acquisition side, mainly looking in the Charlotte market. He thinks that the Charlotte market is really great long term, especially in light of everything going on. He thinks that the diversity of employment there is really good and sees that as a good long term market, but he stepped back a little bit when that CDC moratorium came down. Senior Living / Assisted Living They’ve been dealing with a lot of changes in the visitation front. As far as operationally, they are going to see a lot of interesting deal flow in the assisted living memory care, skilled nursing space. They’re at a demographic trough that’s going to exist for a little while. That’s where the baby boomers don’t need care yet. And their parents and people that are older than them are passing away faster than they’re being replaced. They’re at that point now for the next couple of years, where it’s going to be a little bit of a demographic challenge in this business, and then it will turn pretty sharply. Developer The past month has been definitely unexpected. They’ve a number of projects in Lake Charles, Louisiana, that got hammered by Hurricane Laura and they got to see how well the site would perform under heavy rain conditions and it performed well, including a tropical storm that came through recently. The last month has been dealing with that situation, and it has opened up more opportunities. So overall, it’s actually been good for them. They’re still seeing opportunity for new construction. They’ve three projects that they’re doing. It’s never a straight line, there are always surprises, like lenders doing the bait and switch thing pretty liberally, saying that they’ll give you amazing terms, and the loan committee comes back with this concern. So the interest rate is going up. Apart from that, it’s business as usual. They’re being very careful not to make major long term commitments unless they really see very strong market fundamentals. They’re still bullish in some markets.  --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

Nobody gets anywhere alone, everyone that is successful has gotten there with the help of many, many people. I'll also talk about how you can start your real estate career from zero and get your first deal done. You can read this entire episode here: https://montecarlorei.com/how-to-grow-your-real-estate-network-and-how-to-start-your-investing-career/ How to Grow Your Network: Join Meetups in your area, even if they’re only doing online events, start attending them and getting to know people in your area. Go to as many real estate events and conferences as you can. You want to meet as many people as possible, make a note on their business card of what they focus on, make a note on what you guys talked about, if they have kids or what are their hobbies. When you get home, transfer all your contacts to a spreadsheet, or a contact management app, and send them an email saying that it was great meeting them, and add them on Linkedin. Make a name for yourself, start to be active in any platform such as Linkedin, Biggerpockets, Facebook groups. You want to join real estate groups in any of these platforms. Spend a few minutes everyday commenting on posts, and sharing insights. Check in with your network every few months. This can be done via email, Linkedin, Facebook if you added them there, but the best of all is always a phone call. I’ve created a couple of partnerships simply by checking in on people on a regular basis and seeing how they are doing. How to Get Your Commercial Real Estate Investing Career Started: Become a commercial real estate agent. You can focus on selling or leasing properties. You can start working for a real estate investment firm. I met someone that literally started as a secretary and worked her way up to a partner. Start investing in syndications, this allows you to invest a small amount of money, and at the same time familiarize yourself with the paperwork, terminology, how companies evaluate deals, how they pitch deals, etc. If you know someone that is a successful commercial real estate investor, you can have them be your mentor. Just make sure that you add value to that person, like bringing them deals based on their requirements. Build relationships with commercial agents in the area. Start joining their mailing lists, start asking for OM’s (offering memorandum). This way they will familiarize themselves with your name and you’ll start to learn who may be a good broker to work with. Start playing the Cashflow game by Robert Kiyosaki, it’s a very good game for you to start understanding how real estate investing works and how you can grow your net worth. You can either buy the board game, and invite your fellow real estate friends to play with you, or you can play on their website for free. How to Make Your First Investment if You Have No money: After you find a good property, and have shown to your network that you are learning all you can, invite friends and family to invest with you. If no friends or family are interested in joining you, partner up with someone experienced. If you have a property under contract, you can always give a significant percentage of the deal to that person, just so you can have the deal under your name and you can show your future investors what you have done with that first property. Buy and/or Play the Cashflow game here: https://www.richdad.com/products/cashflow-the-board-game --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

How are retail investors dealing with everything that is happening? What kinds of things are they looking at repurposing retail spaces for? How are they projecting revenues? Chris Ressa, COO at DLC Management Corporation shares some insights. You can read this entire interview here: https://montecarlorei.com/how-is-retail-performing/ What's going on in the retail space? There are certain places that are on fire and doing really well, and there are certain places that are challenged. Right now the most challenged is the enclosed mall. And we like to say we're in the same industry, but a different business. Most of my tenants today don't have a lot of exposure. They don't operate in a in a mall, we own either grocery anchored or what we would call power centers. A Walmart anchored, a Target anchored center with a TJ Maxx, Home Goods, a McDonald's on a pad in the parking lot. If you think about who the tenants are in those centers, they're very different than in those open air, strip centers. They're very different than the tenants you see in the enclosed mall. The enclosed mall was a destinational, retail fashion oriented shopping venue. That has shifted, it used to be driven by the department stores. the enclosed model is going through a massive transformation, the open air is going through some transformation, but there's a lot of positive transformation. What kinds of things are retail property owners looking at repurposing retail space for? In the pre pandemic, what you were seeing was this buzzword experiential retailing, which was theater and entertainment venues, but they were really going to iconic destinational retail properties, where that's not the everyday retail property in America. The everyday retail property is where someone goes and gets their nails done and picks up their groceries and grabs a slice of pizza and whatnot. And I don't know that there's going to be a huge transformation. I think that there's obviously going to be repurposing, you see a lot of the enclosed mall operators talking about maybe making deals with Amazon distribution, etc. There's going to be some of that mixed use stuff. I don't know that that's at scale. How are you projecting revenues? Are you projecting with additional vacancy in mind? The way we're looking at it is we're trying to assign a probability to the durability of the cash flow stream. When you're investing in retail properties, that's probably a key piece. If you think about any retailer, whomever it is, whether it's Walmart or TJ Maxx, or Starbucks, how successful is this location? How does that location fit into their grander plans? What do you expect will happen when they come up for renewal? Will they stay? Will they leave the market? Will they want to move down the road? How are you managing things through Covid? We had a three pillar approach through the pandemic. We called it the ate's: communicate, accommodate, and mitigate.ommunicate, accommodate, and mitigate. We need to do whatever we could to mitigate the virus, sanitize, clean our properties, and make them safe environments to shop. We needed to accommodate and work with our tenants where we could, and try to cut deals. And then we needed to communicate and continue open lines of communication. If there's anything that's positive that has happened through the pandemic is that we've had opened up the lines of communication with our tenants, our lenders, and everybody from a work from home environment more than they've ever been. Chris Ressa #ressa on Linkedin Retail Retold Podcast Join our facebook group here: https://facebook.com/groups/montecarlorei --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

How do you start your career in commercial real estate, what kind of properties should you look for, and how to manage your properties during Covid-19? Eric Wang, a commercial real estate investor shares how he started his commercial real estate investing career and how he is successfully investing as a solopreneur. You can read this entire interview here: https://bit.ly/3lDR4j1 A lot of our listeners can relate to where you are, running your own business. I would love to hear how do you determine a good project to take on, especially in the Bay Area? Obviously today with the Coronavirus and people moving out of the Bay Area, it’s really difficult right now, but I just don’t want to be too forgetful of the history of the Bay Area. In the past 10 years, it was undoubtedly one of the strongest markets in the world. But as far as up until today, which have been my recent projects in the past few years, my approach has very much been influenced by the value investing, the Warren Buffett approach where, I don’t need to swing at every deal, I can just take my time. I don’t have 10, 50, $100 million in equity that I need to get out of the door. I can be patient and wait. Looking back, I ended up allowing a lot of good deals pass by, but the ones that I did pursue, I felt good about. Let’s take one or two examples from beginning to end. How did you analyze a particular commercial project? Why did you decide to take it on, what did you do with it? What were the scary parts? And how did you exit, if you have exited them? One good example is the live work loft project I invested in. It was multiple lofts, essentially multifamily, but it’s non traditional in the sense that these weren’t little apartment boxes. They were artist lofts. And at that time in 2015, Lake Merritt in Oakland was a really booming market. More attention was coming around the lake, it was starting to already get expensive. Just east of that in this quiet neighborhood, there wasn’t yet much attention there. The reason why I was able to get it early on was because there wasn’t as much attention in that neighborhood. And now in recent years, or today, there’s been focus and investment all over the Bay Area and further deep East Oakland. But at that time, it wasn’t that clear. So it’s this path of growth mentality, the location was in the path of growth, outside of Lake Merritt. I acquired that and the goal was to transition these very large units, these lofts from very cheap space used for artists, or for construction people, people who had all different sorts of crafts and hobbies in these spaces, and small businesses as well, to transition that into more lifestyle. We provided some of the basic things, like bike parking, put on a new roof, upgraded the kitchen interior finishes, they were just plywood type finishes. And we got a lot of great tenants. Was it zoned live work already when you purchased it? Yes, it was already zoned that way. And I didn’t need to change anything about the zoning. The major value add there was just upgrading the use, just making it more efficiently used and presentable for the market of people that were moving into the area at that time. And you didn’t do a ton of construction. You did not make these lofts smaller. No, we thought about that, but we saw the demand and we saw the rental pop already just from improvements that we made. So we didn’t feel the need to do that. It was mostly interior renovations and common area improvements and basic building upgrades. And then you rented it out, and then you sold it? Yes, he was another operator. Eric Wang eric@revprojects.com www.revprojects.com Subscribe to our newsletter here: www.montecarlorei.com --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

How do you decide which opportunities to work on as we find stranded assets? We are continuing our conversation with Victor Menasce, he shares excellent insights into his methodology. You can read this entire interview here: https://bit.ly/327vMRL When you look at a property, what’s your thought process of figuring out how can I add value to this, and create something out of nothing? Whenever I look at a property, I’m always thinking in terms of highest and best use. I’m looking to see what are all of the assets. I’m looking at zoning, I’m looking at what zoning has been approved around it or across the street around the corner to see if there’s any precedent for changing the zoning on that particular property. The zoning is always what is the property right now. It’s not what it could be in the future. So if it was a corner store, it’s zoned commercial for corner stores. But across the street, there’s a 20 story building, chances are good that you might get rezoned for a 20 story building. So you have to look to see what else has been done in the area. One of my favorites is something called conservation easements. There is a tax regulation called IRC 170(h) that allows you to donate a piece of land to conservation in perpetuity. And in exchange for that you get a tax deduction. Not what you paid for it, but for its value according to its highest and best use. Now, remember, this property has to have real wilderness conservation value, you're not going to take a parking lot in Pittsburgh and return it to wilderness ever. It has to be something that has real legitimate conservation value. But imagine it has minerals underneath it, maybe it has oil. What if you could get a tax deduction, you could say, It has a nice lake on it, I'm going to donate this to conservation. It has to be donated to a 501c3 land trust. And then you get a tax deduction for the oil that you never pump. How do you pick which ones to take on? You have to be selective. I'm looking at an opportunity right now, in our market there's a shortage of industrial land. And there's an acute need for contractors, and builders to store building materials. A place where they can put down a half dozen C Can containers and they can store lumber. If they can get a deal on building materials, whether it's siding, or lumber, anything that it's going to be in short supply that they need over the next 8, 10, 12 months, because we're definitely in a supply chain constrained environment. They need that space. I'm in the middle of striking a deal right now with a landowner who has some land, they don't know what to do with it. I'm probably not even going to buy the land, I'll probably end up just leasing it. And then put security fence around it, put down some C Can containers, provide secure access and lease out these spots to different builders as an outdoor storage facility. It doesn't have to be climate controlled, they can drive in with their trucks and trailers and load up. And I'm solving a business problem for a very low startup cost. Do you have a process of how you go about your day? These things come in when they come in and you look at them and try and give a quick no if you can. I don't spend too much time looking at things. If there's too many moving parts, if there's too much risk of it coming together, then we'll pass on it and pass on it very quickly. As far as the other ones, we'll get with the team and we'll see how would we put this together. They literally come in every day of the week. So we have to dispatch them fairly quickly. And some of them have a gestation period. Sometimes they come together in a matter of weeks, and sometimes in months. Victor Menasce victor@victorjm.com http://victorjm.com/ --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support