The Commercial Real Estate Investor Podcast

Discover why investing in apartments may not be the path to financial freedom as many believe. Hear about alternative strategies like self-storage and triple net properties, which offer stable cash flow and less management hassle. Successful investors share insights on pivoting from multifamily to these unique asset classes, resulting in reduced stress and improved personal freedom. The importance of seeking diverse investments over sheer quantity is emphasized, guiding listeners to make informed decisions for a fulfilling investment journey.

Key Takeaways:Advice on leaving W2 job for real estate syndication:Don't leave your W2 job too quicklyStart small and gradually build your portfolioFees from initial deals likely won't cover living expensesHave a backup income source while growing your real estate businessChallenges of starting a syndication:Raising capital is difficultInitial deals may not generate significant incomeNeed to be prepared for 2-3 years of limited earningsRequires careful deal selection and strategic planningPersonal updates:Closing first solo commercial real estate dealWriting third book on commercial real estateGrowing mastermind groups to 140-160 membersUpcoming events and speaking engagementsInvestment strategy recommendations:Partner on deals when possibleStart with smaller projectsBuild relationships in the industryBe patient and strategic about growth

Key Takeaways:Alec transitioned from residential to commercial real estate, focusing on industrial and flex space development.His first commercial deal was a 54,000 sq ft industrial property in a tertiary market, purchased through creative financing with partners.Raising capital is often the most challenging part of development, more so than the construction process itself.Alec chose New Braunfels, Texas for development due to faster site plan approval times and favorable building regulations.He focuses on building flex space under 12,000 sq ft to avoid expensive sprinkler system requirements.His current project involves four buildings with a total development cost of around $10 million, targeting rental rates of $16-$20 per square foot.Key lessons learned include the importance of:NetworkingUnderstanding market nichesManaging people and relationshipsCreative financingThorough due diligence

Key Takeaways:Economic Uncertainty: There are potential signs of a recession, with five major economic forces potentially suppressing US economic growth through 2025-2026.Commercial Real Estate Outlook: The market is unpredictable, with potential both positive and negative impacts across different asset classes (retail, office, multifamily, industrial).Investment Strategy Advice:Don't make decisions based on fearLook at investments with a long-term perspective (5+ year horizon)Keep cold calling and networkingFocus on buying good assetsBusiness Approach: Treat commercial real estate as a professional business, not a hobby. Use professional services like property managers and brokers.Current Challenges:High construction costsHigh interest ratesPotential economic slowdownReduced immigrationGrowing US federal deficitPractical Tip: For flex space, consider renovating existing properties rather than building from ground up due to current economic conditions.

Key Takeaways:Creative Capital Matters More Than CashYou don't need all the money upfront to invest in commercial real estateFocus on controlling the deal and finding creative financing optionsExplore strategies like seller financing, lines of credit, and investor partnershipsFinancing StrategiesConsider 100% seller financing for commercial propertiesUse lines of credit strategically if investment returns exceed interest ratesPartner with experienced investors to leverage their track recordInvestment GoalsAim for 18-22% internal rate of returnTarget 20% annualized cash-on-cash returnLook for deals with multiple value creation opportunitiesNetworking is CriticalAttend real estate investor eventsBuild relationships with potential partnersDo thorough due diligence on potential investment partnersRisk ManagementPrefer fixed-rate loans over adjustable-rate mortgagesPay cash for land investments when possibleAlways have a clear strategy for debt service and cash flowFocus on Creating ValueLook for opportunities to provide affordable spaces for businessesConsider unique amenities that attract tenants and employeesThink creatively about property development and usage

Key Takeaways:Relationship BuildingMaintain constant communication with property owners (quarterly or at least annually)Reach out with market updates, recent deals, or just to check inProspecting StrategiesLead with specific tenant requirementsTrack potential tenants and market movementsUse AI tools like ChatGPT to analyze property data and narrow down prospectsDeal Flow TechniquesBuild relationships across different market segmentsLeverage tenant representation to create deal opportunitiesConsider co-investing to add more value and understand ownership perspectiveTechnology and AI ToolsUse platforms like Placer.ai for retail market insightsUtilize AI for email drafting, data analysis, and communicationLeverage tools like Read AI or Otter for meeting transcriptions and team managementNetworking and VisibilityPost about your deals on LinkedInEstablish yourself as an expert in a specific real estate verticalStay top of mind by sharing market updates and transaction information

Key Takeaways:Create deals, don't just find themReputation compounds faster than capitalChasing cash flow can keep you poor - focus on equity and value creationControl is more valuable than ownershipOne great relationship can change everythingThe first deal is the hardestScale faster by focusing smaller (inch wide, mile deep)Brokerage is the best entry point for beginnersIf you're the smartest person in the room, you're in the wrong roomBuild your brand now - content is credibilityDevelopment will test every part of youYou're just one property away from changing your life

Key Takeaways:Tailor your pitch to your audience:Institutional investors want rigorous data and professional decksPrivate investors are more relationship-driven and emotionally influencedFocus on key investor motivations:Stability (durability through economic cycles)Passive growth (minimal management headaches)Impact and legacyDownside protection and risk mitigationPitch delivery tips:Be comfortable and authenticDon't read slides word-for-wordUnderstand your subject matter deeplyHave multiple exit strategiesBuild trust before the pitch through consistent communicationPitch structure:Start with upside potentialAddress downside risksHighlight unforeseen benefitsDemonstrate how risks are mitigatedCommunication strategy:Ask investors if they're more numbers-focused or vision-focusedBe prepared to move flexibly through your presentationShow genuine belief in the dealProvide transparent information about potential challenges

Key Takeaways:Contractor Selection Strategy:Always be networking and meeting contractors before you need themNot all contractors are skilled in every type of project (e.g., house builders aren't necessarily restaurant builders)Look for contractors with specific experience in your project typeContractor Engagement Approaches:Design-Bid-Build: Fully design project first, then get contractor bidsDesign-Build: Bring contractor in early to consult during design processEach approach has pros and cons depending on project scale and budgetNetworking Tips:Attend industry events like Urban Land Institute, ICSC, local Real Estate Investor Association meetupsBuild relationships before you need themBe open to unexpected connections and opportunitiesInvestment Insights:Understanding and marketing an asset is crucial to its successThe ability to tell a compelling story about an investment can impact its future sale valueAlways be learning and expanding your professional networkPersonal Updates:Recently spoke at Midwest Real Estate Investors ConferenceOnboarding a new admin assistantExpanding brokerage team due to increasing workload

Key Takeaways:Leverage Your Existing NetworkShare what you do professionallyHave one-on-one conversationsTell stories about successful clientsAsk for specific referralsHyper Local FarmingFocus on a manageable geographical areaWalk and know your target marketAbout 5% of properties may be interested in trading at any timeDoor knocking, cold calling, and direct mail can be effectivePosition Yourself as an Online ExpertUse platforms like LinkedIn, podcasts, blogsShare valuable market insights and dataCreate content that solves problemsTell stories about your deals, highlighting unique solutionsShowcase market trends and statistics