All Forum Posts by: Michael Ambrose

You'll need a lot of cash upfront to start in a market like that. The cheapest homes on the peninsula start at $1.5m. If you're just starting off, you should probably focus on areas that are more feasible. 

Hi Jack, happy to connect and help make introductions. I'm just getting into RE investing myself, so don't have a lot of knowledge around that topic to offer, but I'm very connected with professionals across various industries throughout Orange County and Los Angeles. I've worked with and hosted many of the popular meet up groups throughout Orange County specifically, as I use to run a coworking space in Irvine and would open our space up as a venue for different events.

Popularized by the hospitality industry, profit splitting, or otherwise known as profit sharing or revenue sharing, is a contract model I see more and more property owners using, across industries, to quickly fill a space and potentially earn a greater return on their investment.

For those new to the concept, the idea is that it allows a business to operate out of a space without ever getting locked into a lease, and instead guarantees a percentage of the revenue from the business to the LL. The LL certainly takes on a greater risk upfront, but if the business is able to deliver on the expectations set forth, it can be very beneficial to both parties.

I've been following this contract model for a some time now, however I've yet to find any applicable discussions on this topic that one could actually put into practice. Has anyone ever had experience with this type of partnership?

I myself am a coworking space operator looking for new opportunities to partner with LL's and expand into new markets following this model. How should I be approaching these LL's and what is the most effective way to deliver a proposal like this? Has your experience with similar partnerships been bad or good? Any other thoughts or advice for property owners and business operators that might be considering this as well?

If anyone is interested in knowing more about this topic I highly suggest you check out the annual Tech & Tools Guide by everythingcoworking.com for an up to date breakdown and comparison of all the top coworking management software products on the market. They have a lot of other very helpful resources for coworking space owners/operators as well.

I personally have only used Office R&D and Nexudus, and have been satisfied by both running a 12k SF space. 

Pretty awesome tool. Thanks for sharing!

Hi Oliver! From what I've seen, the coliving/coworking model tends to do best in prime downtown business/creative districts where tenants can easily commute to the supermarket, gym, and do other daily errands by foot. I'm not too familiar with the Boston/Cambridge area, so hard to offer specifics, but I would certainly look into the existing spaces in the area to see what they offer and take that into consideration to offer something slightly different. The coliving model also seems to be dominantly driven by millennials and solo-preneurs, hence you would also probably expect more of a demand for Hot Desks, Dedicated Desks, or small 1-3 person Private Offices in your coworking space.

A few years back, a few buddies and I converted a 20k+ SF warehouse into a coworking space that ended up doing very well.  Unfortunately, aside from the capital my partners equally contributed, I ended up with the burden of managing and growing the business by myself, and I left the company to start a new space on my own. 

A private RE investor recently reached out to me and asked if I'd be open to doing a management agreement on a property he was looking at, however we later decided that the property was not suitable for a the needs of a coworking space. Although that deal didn't work out, he's encouraged me to continue looking at other spaces on the market that might be a good fit. The problem however is, I know nothing about commercial real estate. I don't know how to effectively prospect properties, nor the questions I should be asking when contacting the listing agent. 

The other week I came across a property that's been sitting on the market for a while, that fit a lot of the criteria needed for a coworking space, so I wrote down a list of questions and gave the broker a call to get more information on the property. 20 seconds into the conversation, the broker called me "cryptic" after my first question and said he's not going to disclose any details about the property since I'm not being cogent. Here's a copy of things I wrote down to ask:

• What’s the backstory?

• How long has it been vacant?/How much is currently leased out?

• What’s the mix up of the current tenants?

- How many companies?

- When are the current leases set to expire?

• Copy of rent roll?

• Cap rate?

• Any information on the historical expenses on the property?

• Why’s the current owner selling?

• What’s the current activity?

Am I doing something wrong? Is there a better way in which I should be approaching these brokers, or handling these conversations? 

I'm very good at what I do, and am determined to do whatever necessary to make this new venture come to life, but I'm really struggling to learn the real estate world and work out the right relationships with people to negotiate a deal like this. 

Appreciate any help/advice you guys have to offer!