Pot And Real Estate How is it working? Colorado?WA? OR?

Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes

How has the legalization of pot influenced your investment strategies?How has pot changed your rental policies? Has pot made you money or caused more concerns? Has weed done the deed?

http://www.marketwatch.com/story/5-ways-marijuana-legalization-affects-real-estate-2014-11-25

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Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

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Let's bring in the Colorado experts on pot.

@Brandon Turner and @Joshua D. !

If anyone knows about pot, these guys should! :)

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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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It seems to have helped the commercial brokers
https://www.bisnow.com/washington-dc/news/office/5-tools-every-marijuana-real-estate-broker-needs-44143
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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In Oregon it is heating up parts of the market
http://www.oregonlive.com/marijuana/index.ssf/2015/01/oregon_marijuana_growers_vie_f.html
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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In Washington even the tribes are getting involved
http://www.columbian.com/news/2015/mar/24/bill-would-let-tribes-work-with-state-on-pot/
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David E Gardner
Investor · Williamsburg, MA · Member since 2013 · 9 posts · 2 votes
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@Steven Picker
In Massachusetts, it is still in the early stages of legalized medical marijuana & it is highly controlled (the state dictates the amount of dispensaries & warehouses & their specific locations within those counties). However, I have a medical marajuana doctor in one of my buildings (she can write prescriptions only). The money comes in on time. The only setback is the perception from bankers, insurance, & the general public that there is marijuana present at her space. But that's just more of educating them of the rules.
What I'm more interested in are the off shoot businesses that are created from legalized medical marijuana & how they have taken up retail & industrial space in those states (CO, OR, & WA). And how these dispensaries are functioning without traditional banking? Somewhere there is a massive opportunity for someone (or somebody) to take on the private lending aspect.
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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@David E Gardner
You have made some great points In Las Vegas last year they finally allowed pot dispensary ,with limited applications There was a mad scramble for storefronts through out the city Despite the heavy application fees $30,000 there was a lot of activity . I think @Brandon Turner and @Joshua Dorkin are saving these secrets for an upcoming webinar
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Mike HurneyPro Member
Real Estate Investor · Boston, MA · Member since 2009 · 2k+ posts · 545 votes
11y
@David E Gardner Welcome.
I think the fix is in, when you look at the former politicians and hacks that have received licenses.
BUT
You could open a fast food franchise, check cashing office or Chinese take-out near by?
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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I like the food angle @Mike Hurney
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Let's bring in the Colorado experts on pot.
@Brandon Turner and @Joshua D. !
If anyone knows about pot, these guys should! :)
6 Reply
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
11y
@Bill Gulley
one of the drawbacks yo sleep later
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Chris Winterhalter
Investor · Chicago, IL · Member since 2009 · 566 posts · 274 votes
11y
http://nreionline.com/industrial/industrial-sector...
It's obviously been a boom for Denver especially in the Industrial sector. It will slowly become an accepted industry in my opinion. It will be tough to ignore like other potentially questionable industries like gentleman's clubs or "intimate shops" because of the sheer dollars involved.
@Bill Gulley and @Brandon Turner should chime in...
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Originally posted by @Account Closed:

@Bill Gulley
one of the drawbacks yo sleep later
Since my first post this morning was just after 3:00 AM, that might not be such a drawback after all, I understand old hippies can use some medical excuse. :))
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Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
11y
Sorry to disappoint, but I'm not the pot expert, @Bill Gulley. :)
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Then Brandon must have bee high telling those stores of toker king!
Maybe it was @ J. Scott, the toker king......or was that poker king? :)
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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y
Peyton Manning owns a bunch of Papa Johns in Colorado. Those sales might be good due to the "pot munchies".
I think it comes down to a moral question. Some investors do not want to own certain businesses or properties that house them because of beliefs.
Money at all costs to own something you do not believe in doesn't match up. It's just like strip clubs, booze stores, etc.
I have some clients where they will not buy a Hooters, Twin Peaks, etc. because their wife will disown them.................. : )
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Jeff G.
Investor · West Bend, WI · Member since 2014 · 214 posts · 149 votes
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A employee of ours father owned a business in Denver and owned three commercial buildings in the "green mile" area. When he closed his business all three buildings were bought with cash for a hansom sum (way above typical market value). All buildings were bought by dispensary owners for grow locations. Our employee said you practically cannot find a commercial building in the area.
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Pete Rosen
pueblo, CO · Member since 2015 · 5 posts · 2 votes
11y
most property management companies have rules against growing. There are several bills trying to make it illegal for renters to grow. It should be a very real concern for investment home owners. Careless growers can do a ton of damage to a home in short period of time.
High humidity and condensation can cause mold. Damage can be done trying to create infrastructure for growing, flooding can cause water damage. Not to mention the electrical hazards from grossly overloading systems.
In my area rent rates are currently very high, I dont think its because people are flocking here to monopolize on home grows. But perhaps it being legal makes it a more desirable place for some people to live.
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Ross G.
Denver, CO · Member since 2012 · 11 posts · 3 votes
11y
Originally posted by @Chris Winterhalter:

http://nreionline.com/industrial/industrial-sector...
It's obviously been a boom for Denver especially in the Industrial sector. It will slowly become an accepted industry in my opinion. It will be tough to ignore like other potentially questionable industries like gentleman's clubs or "intimate shops" because of the sheer dollars involved.
@Bill Gulley and @Brandon Turner should chime in...
It has had a huge impact in the Class B and C industrial sector. Class A, not so much. Much of the large Class A industrial product (100k SF +) is owned by institutional investors. I work for a large industrial REIT and we won't touch the pot stuff. Too many implications with shareholders and the Feds.
Class B and C though, prices have over doubled in the past few years. Crappy buildings that used to be $30-40psf are now over $100psf. Cash buyers. And they are happy to pay that much because they can rent them for $20psf to growers. So your purchase is paid off in 5 years. Everyone is cash since banks cant finance anything pot related.
I think the time passed for Colorado and Washington. The big play is to find the next states to legalize and buy up cheap industrial buildings there.
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Welcome to BP, Ross!
How are those pushers obtaining certified funds for the "cash purchase" no closer is going to take a bag of cash.
;)
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Ross G.
Denver, CO · Member since 2012 · 11 posts · 3 votes
11y
Originally posted by @Bill Gulley:

Welcome to BP, Ross!
How are those pushers obtaining certified funds for the "cash purchase" no closer is going to take a bag of cash.
;)
The owners literally use a bank for a few months until the bank catches onto their business model, then they switch to a new bank. Tenants do pay rent in cash and banks have been training tellers to recognize the smell of pot on the money. No joke. Whoever figures out how to legally bank these businesses will make a killing.
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Send it to the dry cleaners! LOL
They can't deposit funds in an insured institution, they have cash sitting in boxes in storage!
Be assured, if the banks can get around the Patriot Act and large cash transaction reports, they will be happy to take the money, I'm sure of that! Until then, those trying to clear funds should consider how they look wearing stripes! :)
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David E Gardner
Investor · Williamsburg, MA · Member since 2013 · 9 posts · 2 votes
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Looks like there is one banking institution thats willing.
http://www.denverpost.com/marijuana/ci_27360883/oregon-bank-opens-doors-colorado-marijuana-businesses
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OP
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
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Originally posted by @Joshua D.:

Sorry to disappoint, but I'm not the pot expert, @Bill Gulley. :)
Only from an: investors view
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Jillian Sidoti
Professional · Murrieta, CA · Member since 2013 · 405 posts · 458 votes
11y
I am in the process of bringing one of these companies public. The industry is literally blowing up. I am excited to see how this turns out. They currently own property in Colorado for marijuana cultivation and we have specifically separated the "cultivation" from the real estate ownership to protect assets.
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Joel OwensBusiness Member
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Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
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I watched a 2 hour special on this the other day.
Basically the banks are saying the Feds are telling them it is okay to house the money but they are being very vague.
The banks are saying until we have something concrete from the Feds on this in writing then it's not worth it to put our as% on the line. Frankly I do not blame them in the least. The rewards just do not outweigh the risks from the banks standpoint.
The pot companies say it is dangerous to have to carry cash because of robberies and they have to hire security teams to protect themselves.
I wonder if the pot companies could start their own banks with a separate entity and then agree to take the risk to house the money. In that situation they have a payoff directly to themselves so it might be worth the risk to them being involved in the industry.
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Paul Ortiz
Anaheim, CA · Member since 2014 · 163 posts · 51 votes
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Originally posted by @Account Closed:

@Bill Gulley
one of the drawbacks yo sleep later
you have the wrong kind my friend, my adds to my endurance runs.
Cheers
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