All Forum Posts by: Joel Owens

Yeah gotta love commercial is doing bad stories and read the article and they are talking office. I have been through many cycles. Office always gets hammered except in very rare highly constrained markets with intense demand and limited supply.

Even medical office which I like we are focused on very strong operators. The small docs often cannot find companies to buy their business so they shut it down and give records to other doc still open that is a smaller shop.

Business isn't a problem with medical it is STAFFING to service the customers. Everyone fights for limited help.

Commercial retail in some cold belt states where you have OVERSUPPLY and most tenants leaving and not expanding more spots then those towns can be doing bad. In good areas land still at a premium. Strong suburban has overtaken urban core and most want to work from home so a glut of office space on the market and street level retail urban core doesn't have the daily lunchtime traffic from workers to do enough sales to stay in business.

At 48 years of age it's not really about the most money anymore. It's about TIME and what I want to do with the best current and future years remaining of my life.

Once you have millions, tens of millions, hundreds of millions life perspective can change from the start up days being younger and just trying to pay the bills.

Often there is elation from surviving on 40k a year job to making 100k plus with some breathing room. Then there is the first million made where technically could retire with right investments and low cost of spending and living. After that growing money past inflation and then some is still the goal but people tend to take the foot off the gas pedal as they age when they see that money is infinite and time is not.

Currently right now as a commercial broker even with high interest rates this year easily pulling in seven figures. Buying my value add properties net worth is rising about 5 to 7 million a year. Still ramping up but not working more than about 30hrs a week. Have our 3 year old son which gives us great joy and my mom is 80 so putting more focus on memories for myself and my loved ones.

Goal by 70 years of age is to be a Billionaire but doing it MY WAY. What does that mean? It means working no more than 30HRS a week and making tons of memories along the way to have for myself and future generations to look back on.

I don't believe in balance in life. You can have 100hrs a week into 4 equal buckets and be miserable. Instead I focus on harmony. Harmony is a constant re-adjustment about how you feel living your best life on a daily basis and that can constantly change in a moments notice.

The number I reach by 70 years of age isn't as important as the journey and the method getting there. If I hit 500 million but during those years I lived fully like I wanted to then that is a win for me.

The billion really has very little to do with the money.

The 2 main reasons I want to do it:

1. Amplify more good works in the world. Once you have more than enough you do still enjoy nice and new gadgets and gizmo's but get more lasting happiness hearing about others in life doing well. I know I make the car wash persons week giving them a 40 dollar tip. That might mean taking their family out for a nice meal and seeing the kids light up and being happy. I know what it's like to have nothing and live on food stamps and church pantries just trying to survive another day. I didn't have anything starting out but I had the will to keep learning and never quit and that's what 95% of people don't have is they give up when it gets hard.

2. I want to show future generations in my family what can be achieved if you believe in yourself and never quit on your dreams. If I can come from not having 2 pennies to my name to being a billionaire and have harmony in my life and tons of fun life experiences and memories along the way then whatever dreams they have will not be out of reach. I want to give them that inspiration.

There are funny and heartwarming moments in life that I cherish way more than money. My 3 year old before school today told me his favorite sticker is a race car. He had it in his hand and went to hug me and said ( You are my racecar daddy ) That meant more to me more than anything. I told him he was mine too.

Another one this morning he looked at our cat and said ( Otis you can't have Cheetos right now until you eat your vegetables! )  I started laughing out loud because he was talking about when we tell him he has to eat his main meal first.

The unscripted funny moments in life is the magic. Once you have more money then time start to think about what you really want out of life. I didn't want future family generations to look up an ancestor and say ( he had a successful business and worked like crazy.. the end ). I want them instead to read with curiosity and wonder who I was and the amazing paths I took in life.

Reality is someone isn't going to do coaching for 10,000 if highly successful. I make about 3,000 an hour for my time in commercial real estate. My clients buying properties learn from me as we go and also on my syndicated value add NNN deals.

If they want my time and almost 20 years experience I am not giving that away on the cheap it comes at a high premium as TIME is such a limited resource whereas money to be made is almost infinite. 

Programs will have where the head person occasionally does a zoom call or meets in person with a mass group of people. You really have to want to be in that space. If someone is making millions to tens of millions a year in income WHY are they going to spend 50 hours with a new person that knows nothing in the field for 10k? They would be losing tons of money. Just giving the realities to the dreamers out there. Your best bet might be to go to local investor workshops and then find someone very successful where they might take the time to help you out IF they feel you are truly motivated to listen and take action with direction as given.

At some point as people age they do want to pay it forward helping others but not those with low motivation or want the easy answers in life with massive results.  

Bottom line a roofing company isn't going to typically pay for punctures to the membrane of the roof like a roof mounted a/c unit. Often there is not enough sealant around the bolts that are put in and not having proper drain lines to lead away from the roof itself leads to ponding. The water sits there before evaporating and goes to the path of least resistance.

Another area where a leak can occur is when a sign is installed outside above the door entrance. They often do not seal it well outside and inside where the electric attaches. This can lead to leak in ceiling right as you walk into a unit.

On certain centers being sold lets just say some developers ( talking in general ) are know to put up new centers that might like pretty on the outside but are built like junk and then put in lots of mom and pop tenants who have high risk of going dark. Before looking to buy a center check who the owner of the center is and inquire with surrounding attorneys about their dealings ( on the streets ). You can often glean lots of info how they conduct themselves and make your own determine whether you want to engage them to buy a product they have built and are now selling.

As far as reading through every single post I just do not have the time. I get on here now maybe every month or so and post when I can. Once you make a certain level of money time becomes way more valuable.  

With the roof there is the roofing company warranty for the material itself and then there is the warranty from the contractor who put it on. Some developers use whoever is the contractor at the moment to put it on to save a few bucks. When problems arise later on the manufacturer says it's not the product that failed it's the contractors poor application of the product that is causing issues. That is why it is just as important WHO puts the roof on and stands behind it as the product being used itself.

If you do not get the roof leaks fixed and keep patching on the cheap and the tenants keep having issues they might eventually leave. It looks bad on the tenants each day for a building to be unkept in the eyes of the consumer patronizing their business.   

So the current owner bought from the developer when the property was 3 years old then?

When that buyer closed did they review the roof warranty ahead of time and what is required for inspections to maintain the roof?

Just because there is a 20 year roof warranty does not mean it automatically passes onto the new owner (buyer).

Having another company do maintenance to the roof other than the roof warranty contractor that put the roof on could VOID the warranty. When the center was first purchased there should have been a 3rd party roof company inspect the roof that did not put it on so they could give honest opinion if installed properly.

If contractor incorrectly installed the roof with the warranty then that could void the manufacturers warranty. You have the manufacturer parts warranty and then the contractor labor warranty and if contractor was smaller they might not be around anymore when a problem arises. 

15,000 sq ft roof depending on variables running about 8 bucks a foot but can go to 12 for a flat roof just varies on time of the year, amount of labor hours to remove current roof, and any product shortages.

I would check right away to make sure the roof warranty was transferred and is not null and void.   

How old is the roof in years? Typically when a purchaser buys a center there is roof warranty that transfers to the new buyer. If seller let roof warranty expire or not keep it up then typically try to get a credit from the seller at closing to cover future roof maintenance.

Whether a roof needs lots of maintenance depends on if it was installed properly and how many trees are around it. Also the pitch of the roof even a flat roof might not be graded properly. Determine what you are working with first for the roof and go from there. Almost 6,000 a year sounds expensive to me. How big is the retail center in sq ft?

Most of my clients we do not look at anything below 2 million in price. 7k cars a day is weak but might be manageable with best spot in town.

Roofs these days are about 8 to 10 a foot or more. If the roof is gravel then can be more as they have to do extra labor to suck off the rocks before they can tear off and replace.

Most times what you are buying is not the building but the dirt for the area and location.

There not really loans on less than 5 years remaining properties. I would not want old building NN in a cold belt state with lots of weather items to deal with.

As to what you should buy or not buy that is a whole discussion based on your goals and liquidity and net worth. My clients might buy an 8 million STNL that puts off 5% cash on cash and with mortgage paydown close to 10% return before tax benefits. They get loan with little to no pre-pay penalty today and the REFI when rates hopefully drop in 12 to 24 months and increase the spread.

Example buy 8 million property in amazing area at 6.4 cap rate today and loan is at 5.75 with 40% down. Fast forward 2 years and rates are not 4.0%. Refinance and with rental increase now at 6.65 cap rate and have spread of 265 basis points on absolute NNN property with long term lease. Before with low interest rates the property could sell for 5.0 cap rate. Smaller towns not much rent growth long term whereas strong suburban alot of tenants wanting to expand and not much available so pushes rents higher and higher per foot.

I buy turn around stuff for cash nationally. I do not put anything into unlocked value when tenant stays there forever because they have a cherry deal I will likely never see the value or wait decades for it. So the actual upside on a stabilized property has to work and not just the upside potential. Stabilized under 2 million just lots of junk to look at and the actual rare diamond ( 1 out of 10,000 NNN properties ) there are multiple cash buyers to fight for it. Lots of buyers with a few million wanting to retire and pay cash to get six figure passive income. Most strong suburban areas dictate 2.5 million and typically 3 million and up in price on new builds.

Lenders worry about regular sit down restaurants without a drive thru as they think corona or something else will come back in future years. That is why lot of QSR buyers because about 75 to 80% of business in drive thru so less future pandemic affected in a lenders eyes. Also anyone reading OM's on properties for sale it is a trick sometimes listing brokers mention a strong credit parent company BUT if they are not on the lease it doesn't mean SQUAT.

It's like Warren Buffet owning as a example a parent company but they are not backing the lease of a location you want to buy.   

See if there is a vacant single tenant building close by or land that you could purchase and move his jewelry business with dedicated parking there and then lease out the inline space they vacate.  

I buy banks also. Lot of qsr, banks, old gas stations, vacant pharmacy. 

It's all about expectation of price seller wants. If they want end user pricing what tenant would pay then it's not for me.

So I have interest in maybe 1 to 2 out of 10 I see to offer on. It's a numbers game just like any real estate asset class. You have seller want top dollar for established diamond properties and then you have everything else where seller trying to get diamond money for tarnished locations. I do not pay premium for their headache. I get at low price with high upside or I pass to the next deal.

Is there room left to right to expand their space or a way to go back deeper with the jewelry store? Could you add on a level and go higher with upper level for them?

If you had big parking lot you could possibly build freestanding. Is there any land to the left and right of you with raw land or older building you could do conversion on or knock down and build new?

Wireless store just okay tenants. Jewelry store I would have to meet with tenant and hear their vision if they want to expand to multiple locations or just expand that one and be done with it. You could have various tenants wanting to expand and then buy up other centers with vacancy and the tenant knows you and if they like you would likely expand where you buy as well to keep being their landlord.

Jewelry does good in upturn but pending economic recession downturn coming you need to know how each tenant type will stay and pay during the tougher times.