The Commercial Real Estate Investor Podcast

Key Takeaways:Tyler and Jacob bought a failing self-storage facility for $1.7 million, with the goal of turning it around through operational improvements.The facility was advertised as 95% occupied, but was actually only 66% occupied when they took over. This was a significant discrepancy.The property had a poor reputation with many negative reviews, so Tyler and Jacob plan to focus on improving customer service and rebuilding trust.They see opportunities to add 30-40 additional storage units, which could increase the property's net operating income by 30-40% within 12-24 months.They plan to be relatively stabilized by the end of the year, and may be able to finish the project in 2-3 years instead of the initial 5-year timeline.Key next steps include conducting a cost segregation study, improving operations, raising prices, and deciding whether to keep the existing business name or start fresh.Overall, the focus is on operational value-add strategies to turn around the failing facility, rather than major capital expenditures.

Key Takeaways:The commercial real estate job market is challenging, especially in sectors like development. Factors like high interest rates, construction costs, and cautious banks make new development projects difficult.Leasing and asset management roles may be relatively stronger than sales/brokerage, which has seen significant declines in transaction volume.Building relationships, especially with commercial real estate brokers, is crucial when trying to break into the industry. Networking and persistence are key.Obtaining specialized knowledge through courses, certifications, and mentorship can make you a more attractive candidate, but relationships are often more important than just credentials.Creative financing strategies like using investor capital, seller financing, and leveraging existing assets can help overcome the barrier of limited personal capital when getting started in commercial real estate.

Key Takeaways:Hospitality experience is valuable when transitioning to real estate. Andrew's background in running restaurants and managing teams helped him in operating the Swepson Guest House.Focusing on a specific customer type and not trying to be everything to everyone is important. Andrew targeted large groups like corporate retreats and bachelor parties.Providing additional services like trip planning and concierge-style amenities can differentiate a property and lead to repeat bookings.Being flexible with the property's layout and usage (corporate vs. leisure) can maximize revenue.Anticipating and planning for high guest usage, such as having extra furniture and supplies on hand, is crucial to maintain the guest experience.Applying lessons learned from previous business ventures, like using durable and easily replaceable items, helped improve operations.Exploring alternative business models, like converting an office space into a boutique hotel, can lead to more profitable opportunities.Leveraging connections and marketing strategies like SEO and social media can help attract the target customer base.

Key Takeaways:Tyler is excited about setting up a new studio to create more in-depth, longer-form content on commercial real estate investing and development in 2025.Tyler has been very busy recently, with several property transactions and projects, including selling a property with a 305% return, closing on a 105-unit self-storage facility, and developing a 215-unit self-storage facility.Tyler is shifting his investment strategy to focus more on cash-flowing deals rather than just equity-focused projects.Tyler prefers metrics like annualized cash-on-cash return and equity multiple over IRR when evaluating deals.Tyler is not a fan of wholesaling commercial properties due to the challenges and costs involved.Tyler advises against trying to transition from residential to commercial real estate by just building a larger residential portfolio, and instead suggests selling residential properties and using the proceeds for a commercial investment.

Key Takeaways:The hotel renovation project is facing several challenges, including dealing with the historic nature of the building, unexpected issues like water leaks and structural problems, and high costs for things like the pool and electrical work.The team is working to preserve the character of the historic building while also modernizing it and making it functional for a boutique hotel.There are a lot of details and coordination required for a project like this, from managing contractors, to dealing with inspectors, to planning out the layout and amenities like the pool and bar.The project is over budget in some areas, like the pool, which is costing $400,000, which is about 10% of the total $5 million budget.Overall, the conversation highlights the complexities and challenges of renovating an older, historic building into a modern boutique hotel.

Key Takeaways:Tyler discussed his end-of-year planning rituals, including an annual tradition of writing down and burning things he wants to leave behind from the previous year.He shared insights from the CRE accelerator mastermind, highlighting the value of being part of a supportive community and learning from experts in different niches.Tyler talked about challenges with appraisals and how to proactively provide data to the appraiser to improve the valuation.He emphasized the importance of goal-setting, using SMART goals to break down lofty objectives into actionable daily tasks, especially for the brokers mastermind group.Tyler shared his personal goal of working 3 days a week in 2025, stressing the need to be selective with his time.He discussed the pros and cons of commercial condos as investments, generally advising against them due to potential HOA management issues.Tyler provided advice on financing strategies for adaptive reuse projects, suggesting reaching out to multiple lenders and pitching to potential investors.He highlighted the challenges of investing in coastal areas due to rising insurance costs and climate-related risks.

Key Takeaways:New Orleans has seen a 25-spot jump in the rankings, driven by its tourism industry, but still faces challenges with a recovering economy and susceptibility to boom-bust cycles.Charleston has seen robust population and employment growth, driven by manufacturing, logistics, and tourism, but is facing affordability challenges.Columbus, Ohio is a fast-growing, business-friendly city with a diversified economy and strong population growth, making it an attractive investment market.Detroit has seen a remarkable turnaround, with its first population increase in 66 years, driven by revitalization efforts and a more diverse economy.Manhattan has seen a strong rebound, with renewed vibrancy in the business district, though high housing costs remain a weakness.

Key Takeaways:The industrial sector is expected to see steady transaction volume in 2025, driven by interest rates remaining relatively stable. A potential interest rate drop could spur more activity.The office market is facing challenges, particularly with B and C class buildings, but 2025 is predicted to be a rebound year for leasing and pricing. Office to residential conversions will continue, but are limited in feasibility.The retail market is seeing softening in luxury segments, with a lack of new development. The focus is on quality deals rather than quantity, as it's difficult to replace existing retail space.When evaluating asset class performance, industrial, student housing, and senior living are highlighted as potential outperformers, though market-specific factors are crucial.Technology is playing a growing role, with AI tools for summarizing industry news and data, as well as data analytics platforms transforming site selection and tenant needs in the retail and office sectors.For job seekers in real estate, building connections in the industry and developing deep market expertise are key strategies to prepare for the 2026 job market.When selecting lenders, factors beyond just interest rates, such as loan terms, personal guarantees, and fees, should be carefully evaluated.

Key Takeaways:Emily Benedict's background in corporate America and residential real estate has helped her transition smoothly into commercial real estate. Her expertise in land entitlement and development is a valuable asset.Finding properties is a key challenge in commercial real estate compared to residential, requiring more networking and proactive outreach rather than relying on an MLS system.The educational resources and mastermind programs provided by the Cobble Group have been instrumental in accelerating Emily's learning curve and providing her with the tools and knowledge needed to succeed.Communication and client management are crucial, with Emily emphasizing the importance of keeping clients informed throughout the deal process.Emily has set ambitious goals for herself, including sending 10 personalized letters per day, making 50 cold calls per month, and closing 10 deals by July 2025 to achieve $5 million in sales volume.Emily's advice to residential real estate agents considering a move to commercial is to just "do it" and not be afraid, as the skills and knowledge are transferable, and the opportunities are significant.

Key Takeaways:Goal Setting: Tyler emphasizes the importance of setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals for the upcoming year and breaking them down into daily/weekly activities.Impact of Election: Tyler discusses the potential impact of the new president on commercial real estate, highlighting concerns around deregulation, tariffs, and immigration.Niche Focus: Tyler advises finding a niche and differentiating your commercial real estate brokerage, as he did by focusing on East Nashville and small businesses.Evaluating Deals Quickly: Tyler shares a "back-of-napkin" calculation method to quickly determine if a deal is worth further underwriting, based on price per square foot and desired cap rate.Providing Value-Added Services: Tyler suggests offering Property Performance Assessments to property owners as a way to get a foot in the door and build relationships.Leveraging Relationships and Networking: Tyler emphasizes the importance of regularly communicating with other brokers to stay informed about market trends and conditions.Efficient Use of Technology: Tyler discusses reducing reliance on expensive platforms like CoStar and instead leveraging free or low-cost data sources and personal market knowledge.Importance of Mentorship and Involvement in Organizations: Tyler highlights the benefits of being part of the Entrepreneurs Organization (EO) and the value of mentorship.