All Forum Posts by: Ash Patel

@Mel Park - I wish I could give you an intelligent answer.  I have no interest in low cap net leases.  A lot of those assets are used to park money or return safe returns.  My preferred asset should have significant upside.  Ex. a strip center with 15% or more vacancy and some mom and pop tenants.

@Mark H. Porter - I will share everything I do.  I am fully transparent and literally give away all of my secrets. A lot of this inspiration comes from following @Joe Fairless who wrote a step by step book on Multi-Family syndication that many have credited to their success.  Joe gives away all of his knowledge without hesitation.  I have also invested hundreds of thousands of dollars on a handshake.  I can't think of a time where I have been burned by sharing my "secrets", in fact it is the opposite.  Over the years, I have given a lot of time mentoring others on finding commercial deals.  The unintended byproduct of that is they ask me to partner with them on these incredible deals.  I then advise them on how to manage these properties and again receive a free property manager.  This came after years of sharing knowledge and helping others.  

I have about 30 commercial tenants that pay in a variety of ways.  Venmo, paper checks and cozy.  Cozy is getting out of the commercial space this month.  What do you use to track and collect from commercial tenants.  A lot of businesses just prefer to send paper checks from their AP depts.  

I would recommend investing in RE syndications.  With the cost segs and bonus depreciation they take advantage of, you will receive massive negative K1's.  I have had great success with Ashcroft Capital.  The -K1's have been a game changer for us.

I have done a ton of mixed use buildings. I just received appraisals on two buildings that are full gut renovations. The appraisals came back at over twice what I paid for the buildings, which was shocking. The reason for that is how highly they are valuing apts right now. In Cincinnati, value add apt go for about $35k/door. The appraiser wrote in $75k/door ARV. Who would have thought appraisers would ever overvalue a property?

@Joel Owens - hit the nail on the head. I will give you my experience. I have been a non-residential CRE investor for 10 years and have used the same local bank the entire time. Loans started out at 30% down, 5 year fixed and higher than avg. interest rates but they financed vacant and value add properties that other lenders would not. After a few deals, I was down to 20%. After a few more more I was up to 10 years fixed, 25 yr amt and lower interest rates. My latest value add/vacant building deals in 2021 have been 4.25%. If I purchased a net lease national tenant property I would get better rates with similar terms. Funny Joel mentioned it but my wife is a doctor. I suppose that plays a significant factor. Also inline with Joel's comments, these are full recourse personally guaranteed loans which also by default would be cross collateralized. I would love to hear why @Mark H. Porter is keeping his lender a secret.  What harm would come out of sharing that?  I too plan on dealing with my bank for all future deals and will freely share.  It is Center Bank in Cincinnati and ask for Ben Johnson.  They will not finance out of state buyers but will finance out of state properties for existing clients.  Hope my post helps.

If your tenant came to you and asked if they could contract a therapist to help their bottom line, would you have charged more?  My advice:  If this does not pose any problems with parking, let them do their thing.  Celebrate that your tenants success and know that they have a higher chance of success/renewing their lease.  

Dive into @Joe Fairless's endless content.  He gives away all of his knowledge and answers your question in depth on a couple of blog posts.

I have a crazy anecdotal story to tell you.  I just purchased a couple of 3 sotry, 9000 sq ft mixed use buildings in Cincinnati.  The head of the building dept. recommended I remove the front and rear fire escapes because they are not needed and even gave me a company that would remove them for free.  I was baffled.

One of the most underrated RE classes is class B retail/industrial/office.  Unlike MF investors who chase class B/C apt buildings, there are so few investors in the class B/C retail game.  I love buying the mom and pop strip malls in neighborhood locations.  These are often purchased at 40% cash on cash return with massive upside and minimal downside.  I think covid has kept people from going to city centers and drawn them to neighborhood retail 1-5 miles from home.  Think of th essential services that people still go to stores for.  Hair/nail/insurance/restaurants/massage/tutoring etc.  Class A office buildings have huge vacancies while my class B office buildings have a waiting list of people wanting to get out of their house or take the leap with their business.  

I would have them pay you. Estimate what all the NNN costs are for the year and include that in the rent. You pay the taxes, insurance etc. At the end of the year, you reconcile the NNN taxes. Is this a national, regional or mom and pop tenant?