BP Podcast 156: Lifestyle Engineering Through Commercial, Residential, and Vacation Rentals with Mark Spidell

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On this episode of the BiggerPockets Podcast, we sit down with Mark Spidell, an investor from the great state of Colorado, to discuss how he uses real estate to engineer his ideal lifestyle! We talk about partnering with family, investing out-of-state, buying small commercial buildings, owning vacation rentals, and much, much more! Not only will this episode entertain and inform you, it will also help you clarify your own investing plan so you can begin engineering your own perfect lifestyle!

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In This Episode We Cover:

  • BiggerPockets Podcast ArtworkHow Mark got started through ADU
  • Why he went the vacation rental route
  • Where he currently invests
  • The benefits of lifestyle-focused investing
  • Tips for people with families
  • The qualitative and quantitative parts of his investing
  • What he’s learned from his first investments
  • How he weathered the market crash
  • How he was able to buy more after the crash
  • Tips for investing in commercial deals
  • How he financed his commercial property
  • A commercial banker’s perspective on applying for loan
  • The difference between commercial and residential financing
  • How to minimize risk on commercial property
  • The benefits of investing in commercial real estate
  • Why you should ask for help from attorneys when drawing up leases for commercial property
  • The ins and outs of being a landlord for commercial real estate
  • How to successfully mix commercial property and vacation rentals in your portfolio
  • How to find out what you’re good at and figure out which investing path to take
  • The art of lifestyle engineering
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “Commercial real estate is valued based on the income of the property.” (Tweet This!)
  • “If you want the freedom, real estate could help you, but make sure you are doing it for the right reasons.” (Tweet This!)

Connect with Mark

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 80,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

10 Comments

  1. Joshua Leite

    I just wanted to leave a quick comment regarding this podcast. I’ve listened to every podcast over the last couple years and I read the forums daily. This episode and sometimes on the forum people talk about getting into commercial real estate. While there are many great facets to commercial real estate there are also many differences compared to residential (SFR or multifamily). Before you consider getting into the commercial side, I urge you to research and make sure you know what goes into the following:

    Leasing – Tenant Improvement allowances (what is the current market offering) are a major difference from residential. A landlord may end up needing to put in $2 per square foot of leased space in improvements to get a space leased. This takes a bit of free cash.
    Leasing – Broker Commissions – Commercial leases (office, retail, industrial) many times have multiyear terms (3-5, even 10 years) which commercial brokers typically get paid a percentage of total value on. This adds up when leases are valued at $500k+ in total.
    Commercial loan escrows – commercial loan servicers often require escrow accounts for taxes and insurance costs. This can reduce your monthly cash flow if you don’t take this into account going into a project.
    Management – commercial leases are more complex than residential. You have a breakdown of maintenance obligations, cost recoveries, annual reconciliations. A good management company can stay on top of these items as well as the day to day operations. Make sure you know the leases inside out so you are not leaving cost recoveries on the table.

    • Mark Spidell

      @JOSHUA LEITE those are great comments. Commercial is a lot more complicated compared residential. Larger projects especially are no place for new investors with limited cash. I would encourage more resources and podcasts on these topics.

  2. William Gillette

    Great podcast!!! I’m not currently into commercial real estate or vacation rentals, that’s not to say I won’t be in the future but I still took a lot from this podcast. The concept of Lifestyle engineering was very interesting. I also really like the Quote “If you want the freedom, real estate could help you, but make sure you are doing it for the right reasons.” One of the many things that I took away from this podcast was how to prepare for the loan process. That by assisting the bank gathering information and presenting it to the bank at the start of the process can improve you chances.

  3. Tek Chai

    Thanks Mark for your wonderful insight on Lifestyle Engineering. As always, on each podcast, there is always great takeaway and tips from each podcast’s guest. I also like your quote, ” “If you want the freedom, real estate could help you, but make sure you are doing it for the right reasons.” To be financially free means that I would someday love to return to Colorado for an extended period of time, to go enjoy the back country, the fresh powder of the Rockies.

    • Mark Spidell

      Thanks for listen Tek! I am sorry you have to suffer through the awful skiing in Washington. Do yourself a favor and come to Colorado at least once per year.

      Financial freedom is a different experience for different people. Additionally, happiness is difficult to measure and manage and is also different for different people. Real estate may not be the entire solution to an individual’s financial challenges, but it can be a portion.

  4. Cailyn Aune

    This was a fantastic podcast… ! Thanks to the three of you for making it happen. It was refreshing to hear the combo of assets that you have built up Mark, and how you use them. Just hearing ideas such as building mini-storage into a basement on a commercial building… it helps expand my mind and reach in to let it create! I haven’t seriously considered commercial real estate until your podcast. Being a business owner, I think it I would enjoy leasing to other like-minded individuals… it’s a provoking thought. Thank you!

    As for Josh and Brandon…. I have NOT had your voices and faces mixed up. :o) But it did humor me to hear you ask who the listeners think picks on who more…. there is NO contest. Josh, you get the award for picking on Brandon, his book, his looks, and “po-dunk Washington”- hand’s down! And then of course there is Detroit. But we won’t go there. :o)

    Thank you guys… I can’t believe quality of education that is on BP. It’s changing my life and will change my family’s life forever.

    Onward!

    • Mark Spidell

      Hi Cailyn,

      Thanks for the kind feedback. From a business owner’s prospective, you might look into a SBA 504 loan depending on your situation if you have an office. I am planning on doing a blog post about the loan program soon. It can offer much better terms and rates compared to traditional commercial RE loans. A portion of the loan can even have a term of 20 years as well as the AM being the same length.

      Thanks,
      Mark

    • Mark Spidell

      Hi JP,

      Thanks for the listening and for the positive feedback. Being open to various real estate investing and been helpful for me since I live in an expensive market. There are certainly pros and cons, but I am still able to leverage a lot of economies of scale.

      Good luck investing!

      Thanks,
      Mark

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