All Forum Posts by: Joel Owens

You will find just like investing everyone's body, age, life is different.

Just as recent as 4 to 5 years ago I was running 12 to 15 miles a day 4 to 5 times a week. I call it meditative running. My brain often goes 24/7 so it's a great when I exercise it shuts everything down. Luckily I can go to sleep at night in about 5 to 10 minutes.

These days I still run but a few times a week. In between that I swim, bike, walk, crossfit, etc.

What are you trying to buy in commercial? 

QUANTIFY ( Selling another investment property )

1. Listed on the market

2. Listed and under contract with your buyer

3. Passed due diligence, your buyer is hard with earnest money, and checking down to closing.

4. You are closed on your property for sale and in the 1031 - 45 day ID period.

If you do not have your property under contract yet with your buyer I typically have my clients put in an optional seller EXTENSION of time after the buyer goes hard with their deposit money. This can give additional time before the 45 day ID period starts to locate a property.

What are your expected 1031 proceeds? Are you adding funds to them for the next purchase? What type of commercial asset class are you selling and what are you trying to exchange into?

Sellers in commercial get multiple offers from buyers on good assets. They want to know who you the buyer are and what broker you are working with.

Example I specialize in NNN properties nationally for almost 20 years as a principal broker and owner of my firm for the buyer side mainly. If you are submitting offers with an unknown broker or jack of all trades the listing broker will not want to push your offer to be accepted by the seller out of multiple offers. The listing brokers have a volume business model due to commission splits. They want a hand off to the buyer broker to handle the buyer through the process. They do not want to deal with lots of questions and hand holding they do not have time for that. DO NOT touch the money it needs to be with a QUALIFIED 1031 intermediary and when you close the funds (proceeds) go directly to the 1031 from the title company or attorney closing your sale. You never touch the money, get a check from anyone. The second you deposit something by accident yourself the 1031 now can't happen. Do not depend on the title company or attorney reminding you or telling you what to do. Get with a 1031 company early.

You might want to choose another site. If it's in Austin they are extremely picky about setbacks, sidewalks, and greenspace on the road. I could not tell size of your building but you had very, very limited parking spaces.

Are you even in compliance for zoning for the parking ratio to building sq ft? Zoning will require a certain numbers of spaces per 1,000 sq ft of building typically along with so many handicapped spaces. There are minimum parking ratio requirements and then also IDEAL parking ratios for your type of business. That may or may not match up with the sight you are trying to build on.

See if surrounding property can be assembled and purchased for a reasonable price so that you can get a larger footprint.

No legal advice given. 

Hottest play retail centers?...lol

Value is in WHAT YOU KNOW. I often see these multifamily people get sucked in by retail centers at 8 caps and they are looking at 4 to 5 caps with multifamily and think they have the steal of a lifetime.

They buy it and then lose their ***. WHY? Because they have no clue what they are doing. You have to know the product. Sure some people have enough money where they might limp along and figure it out eventually and sell breaking even but many will lose most of their gains from other asset classes.

Let me give you an example. I would much rather have a single tenant investment credit grade then a 3 tenant buildings with weaker tenants in them ESPECIALLY if they are paying market rent for that box size.

The value isn't in the starting cap rate it's where the property is going in rent growth, how much in place rents are below market, the strength of each business operator, the recent expensive capital upgrades, etc. People focus on the wrong stuff with retail centers. Yes there can be good ones that make a lot of money but you have to know what you are looking at. That comes with time and experience so if you do not know work with someone who does ( broker, attorney, etc.)

For value add I look at the dirt first and see what is possible with the land if everything goes south. It's all about the land long term in desirable areas and then what you can do with it.

It's current use may not be it's highest and best. 

The building or buildings sitting on the land might be able to be re-stabilized over time. The question is does the investor want to own that type of asset and is there another way to extract more value that becomes longer term passive versus active income?

I will tell you what I have told thousands of others over the decades talking on the phone.

What kind of life do you want? What is the ideal life you want to be living on a daily basis?

Money is just a tool it's NOT the answer to happiness and harmony in life.

Money can be infinite but TIME is not.

Often when people are younger they think of endless time and limited money. As success can possibly grow and net worth can increase as you age with cash flow if right investments are made then there can be a SHIFT in how people think about LIFE. 

The first 100k a year from making 50k at a job can be a huge windfall for a person trying to survive and pay the bills on a daily basis doing a job they can barely tolerate. They get some breathing room and have an elation high now being able to contemplate what they are passionate about and maybe take some steps to start getting there.

Then crossing the first million in net worth mark. If someone is living frugally and in a lower cost area they might be able to live off the investment now and keep up with inflation. That is another high when officially broken free from the rat race.

Once you start making millions to tens of millions a larger life shift tends to happen. When you have more than enough after working really hard and getting older those precious memories with yourself, family  and friends start taking more center stage than burning the midnight oil at all costs.

I am 48 years old now. If you go back many years on my posts you will see my thought process has changed on how I view money and time as success, net worth, and liquidity has grown. There is no such thing as balance. You can have 100 hours into 4 buckets at 25hrs each and be miserable. What people are after is harmony and being happy in the moment on a daily basis. That is a journey of constant readjustment and evolution as a human being as we age out in life.

I do have clients worth a lot 7,8,9 figures plus. Each level of net worth growth can take a certain amount of life force and commitment to get to at a sacrifice to other items in life.

I have found very few love money and count it everyday maybe a few percent out of every 1,000. The rest use it as a tool to create the life they want. All that crap on TV is superficial and smoke and mirrors. The celebs do it because the masses buy in based off of that illusion of what they think they want to be happy. In real life most of the celebs are not living that way.

I get more jollies these days giving a big tip to a waiter or waitress or the car wash person as I know it makes their week. That gives me more impact than another million. It's still nice to get but the emotional payoff is not as high as the first million, first 10 million, etc.

If you treat people right, learn the skills and knowledge, find your passion, and never give up that is most of the battle to success.

Very few people possess all these traits together. Talk is cheap. Consistent and persistent thoughtful and intelligent actions replicated on a daily basis is harder to implement as it requires a total shift in thinking and being.

I did not have 2 pennies to my name and often was on food stamps and would pawn what jewelry I had over and over again just to eat. When you open the fridge and think of ramen noodles and ketchup as a food group..lol you now you are roughing it. That toughness in life taught me to be resilient when others from middle class and above families were going through the motions being comfortable but not usually challenged. While they did the minimum I was always thinking of the maximum. That taught me to always be thinking outside the box and how to position myself differently in business.

Mark layout a vision board for the next 1,2,5,10 years of where you think you want to be and then work backwards on what it likely will take in hours and steps to get there. Try various aspects of real estate and see what not only make money but what you enjoy doing. I love NNN and can't stand apartments for instance. Other friends love the stuff. It's all about your personality and skillsets.

I have heard tens of thousands of people say the same things you have said in the past yet very few worked to achieve it.

Good luck          

Insurance companies raise rates on older buildings unless you can show almost everything has been properly replaced. They do not care you think everything is in good shape for older building. They go by their industry averages unless you can prove 100% otherwise with tons of documentation to be the exception to the standard.

Just like health insurance/life insurance companies have actuaries to look at when people die they have data to look at what likely happens as buildings age out even with upgrades and replacements. Harsh weather environments go into their risk assessment model.

It can be true that more mom and pop tenants even if they pay on the lease for everything can have a shock to their business with large increases. A retail center in GA say 15k sq ft can be 40k in taxes, same one in Texas 65k, Illinois can be 100k +. That makes tenants CAM costs per foot above base rent really high. Most mom and pop can't stay afloat like that. The bigger tenants the regionals to national in nature are more used to costs to be in that market for the profit model.

So the question becomes if you have weaker tenants even on NNN what do you do? You make sure those tenants are paying way below market rent and that there is demand to backfill the space through stronger tenants paying closer to market. That way weak tenant goes out after all your costs you still make tons of money. Lots of investors just buy a deal in the moment on a high cap rate without assessing and stress testing the risk model of what tenants are there and the dynamics of how their businesses might change when hit with certain costs in the future.

Love people..not money. Some have it the other way around.  

I tell people there is pre-work and post-work to buying a property.

Pre-work vetting a syndicator, a fund, a deal you will buy yourself and THEN post-work who will be running the property ( tenant, fund, syndicator, yourself ) after the property is purchased.

The massive differences are in post-work when it relates to type of asset class and structure in place.

I tell clients the process of buying NNN is not passive BUT when we find the right property and fit for your goals and risk tolerance THEN can be really passive. Some properties absolute NNN and ground lease really maybe a couple hours a year of items to handle and if have a loan updating personal financials to your lender.

The question becomes do you have more MONEY than TIME?

Making 500k a year up into millions and tens and millions of dollars people have no time. They want to find the best people to do business with. Vetting the persons knowledge and character is very important for someone who has no time. Those who have lots of time or partial time tend to want to do themselves and be more hands on.