All Forum Posts by: Ash Patel

@Rich Baer - Thanks for the info.  I have a call into my attorney and will post my findings.

There is an upcoming auction in a rural town for a building that was formerly a bar.  After the building is auctioned, they will auction the liquor licenses which include beer, wine, liquor, Sunday sales and extended 2:30am sales.  I know there are no more licenses available for this area. 

I have never applied for a liquor license so my questions are:

Is there typically a significant holding cost for these licenses?  

If I don't plan on using them for some time, Do I need to apply for them or do I still own the rights?

If I do lease out the bar, do I have the tenant apply for the liquor license or does it stay in my name? (not asking for legal advice just typical protocol)

Thank you!

Great advice given.  I learned a new politically correct term from @Joel Owens "intensive to manage".

@Andy N. - I would absolutely make sure there is a massive lighting upgrade.  Go with quality commercial LED fixtures and shine the property but make sure the lighting doesn't go into the tenants windows.  

A nice automatic gate (wrought iron) is very expensive, requires maintenance and is quite costly when people run into it.  As Deanna stated, non-decorative fences scream "management intensive property".

As far as camera's, they are a deterrent if people see them.  For that reason, you want large camera's that are easily noticed.  You can also mount very large camera housings ($30) with no camera's in them.  Just black out the glass.  When you install the CCTV system, give your tenants access to view all of the camera's from their devices.  This is a huge selling point and makes people feel secure.  

You might want to increase that cap rate if there is deferred maintenance, in a b-/c area and nearby vacanies.  This would likely be financed by a local bank and even then they are not the most attractive assets for lenders.  This is worth more to the store owner than anyone else.  Make a win/win offer where the store owner pays the same or slightly more per month by buying the building.  

Surprised to see 15 years left on initial term. I just did due diligence on a deal that was advertised as multi-tenant NNN with 15 years left on current lease. I later found out it was far from NNN and one and two years left on initial terms. Like Joel stated, "rubber meets the road"!

There are paper MBA's where people go through a program and attain three letters after their name.   Then there are the top MBA programs that will almost break you.  The people that come out of those programs often get their money's worth.  If you are going to stay in the corp world, remember that C-level execs are picky about who plays in their sandbox.  Find out what the norm is in your company/industry.

You can always go for your MBA during the next market downturn. 

@Mike Salace - I worked in healthcare in my previous life before becoming a full time commercial RE investor.  My wife is a surgeon and I have helped her build and acquire several locations.  My advice, shoot for the high end docs (surgeons, plastic etc).  Then find out who their medical device reps are.  These guys usually have the scoop on everything.  If there are physician groups, go to the operations manager and persistently ask for a chance to prove yourself.

Hospitals own 85% of physician practices now so you definitely want to get into the hospital space.  The crazy thing about non-profit or community hospitals is that they focus on revenue instead of profit.  RE expense aren't looked at the same way a for profit would view it.  At some point this is going to bite them in the ***.  These large systems are building like nobody's business and at some point, they are going to have to come to terms with their RE assets.  

A lot of very successful commercial investors/developers have always stated, borrow as much as you can for as long as you can.  What keeps you from doing future deals?  Its the amount of cash on hand needed for the down payment.  Why would you tie up more cash than you have to?  The caveat here is don't go crazy and over leverage yourself into a hole you cannot get out of.  

I have done three multi-family syndications with a team called Ashcroft Capital.  These guys have exceeded expectations by conservatively underwriting their deals.  Relationships are important because once a syndication company has established a good track record, they get money thrown at them.  As mentioned before, many syndication companies only accept qualified investors due to the inherent risk.  I would be cautious about the the companies that advertise on FB or really advertise at all.  If the deal, the company and the returns are legit, they really don't need to advertise. 

What is also concerning is that I am a commercial investor and have been approached by syndication companies who were willing to put together deals for me.  The concern is due to how easy it would have been for me to take money.

The principal of Ashcroft Capital is @Joe Fairless - I would imagine he is active on the multi-family forum and he has a daily syndicated podcast.  Good luck and I would like to hear other people's experience with syndicated deals.

@Shital Thakkar - You mentioned vacant and fill in tenant then mentioned developing a retail center.

I have purchased vacant/bank owned retail and office space.  I have also taken raw land and developed a medical center.  My opinion is if you are not a developer, don't play developer.  I would rather purchase buildings below build cost and add value to them.  Value add commercial investing takes a lot of work and capital but the upsides can be very rewarding.  Medical space is tricky with 85% of physician offices now owned by hospitals.  Ancillary med services near hospitals can be a good play.