The Commercial Real Estate Podcast: Recent Episodes
The Mindful Investor
This podcast focuses on all areas of the most lucrative segment of real estate investing, if done right: commercial real estate. The goal is to make these segments of real estate investing accessible to all. The segment includes malls, plazas, multifamily (high rise, mobile home parks...), mixed-use, self-storage, retail, office, industrial, hotel, medical and data centres.
In this episode, I reconnect with my audience and share my vision for the podcast and our local networking event.
With Jacob from Fallcreek Partners, we dive into the world of medical office and syndication.
I use daily affirmations to enlarge my horizon
I use daily affirmations to influence my mood and my mindset
I put myself in a frame of mind that is positive, welcomes difficulties as opportunities to grow, learn and become a better business man
I frame the difficult projects I am dealing with in terms of I will overcome/succeed to remove the doubts in my mind and help me pull through
To change the way I think, influence my thoughts, which in turn influence everything in my personal ecosystem
received: | from a book, buy in job growth area
| be customer centered in biz
life is not a dress rehearsal: make sure you have fun along the way |
given: take an hour to answer triggering messages |
their relationship with money: chill, not anxious about it
waits for checkins, doesn't reach out all the time, sticks to timeline of updates provided
busy professional who has good insights when asked and a good business acumen
similar values: not just about money but also people, communities, giving back
Not many people know what a real estate investor is
Part I like least is landlord aspect so I don't discuss it
I enjoy finding deals, negotiating, coming up with a business plan
I don't really take investors' money so I don't try to talk about what I do
I am a little more excited now to talk about what I do since it has to do with development and affordable housing
The biggest mindset shift for me was moving away from secure government job to real estate investing
I remember wanting to work as a civil servant for the French government, ideally at university level, job security, vacations and pay cut
when I purchased my first property, took some mindset shift. I educated myself but also spent some time in prayer and meditation to prepare myself pssychologically for the shift
I went all in: property was 3 hour flight away in a different province, with a 1.5 hour car ride, first investment was a fourplex, put in all I had with funds for roof and 3 window renovations
today when I want to enlarge my horizon, I use affirmations, which will be the topic of next month's episode
start off small with a simple repair
increase to bigger jobs
get a contract before doing larger jobs
don't micro manage
I get that feeling sometimes, have a lot of irons in the fire
break it down! Technique I used to use as a teacher with my students
make a list and assign importance numbers and look at what absolutely needs to get done
otherwise make sure the important stuff doesn't get forgotten because of the whirlwind, see The Four Disciplines of Execution by by Chris McChesney, Sean Covey and Jim Huling
Discussion about hiring a VA: create list of tasks, explained through videos and get VA to do the tasks
Will allow you to scale and focus on the important tasks, decisions making, you delegate the actual work so you can focus on the business itself, working on and not in the business
VA: stay at home parent, hired for several hours a week or from a foreign country
also to make time to experience and enjoy life, great resource: The E-Myth Revisited by Michael Gerber
Limiting beliefs - price of real estate I would look at |
it takes the same amount of effort: underwriting, due diligence, capital raise: you can bring on partners for the raise |
legal fees are similar |
easier to manage: elect a tenant superintendant, bring in PM company, 1 roof, 1 boiler, 1 parking lot to plow |
How do you push through: affirmations, take actions: look at bigger deals, surround yourself with greater numbers and create a solid legal and acounting team. |
Overall content with where I am at and what I have done with my life so far
Act faster on some deals
Start with commercial earlier
Start meditation earlier to help sharpen my focus
Travel more
relationship to the phone: many tools, work: text contractors and email property owners, entertainment, social media and time consuming |
system, there are no true emergency where I can do something, the person needed is the contractor and worst case scenario the fire marshal or an ambulance |
| I am available between 2-5pm Mo-Th for non emergencies
sometimes I crave the distraction, the stress, it is difficult to understand |
In this last interview we dive into the portfolio of a local architect - local to South Wester Ontario, Joseph Passa, who work on grass roofs and vertical forests. Nature and construction!
intro = at the core of any business endeavour, any role with responsibilities: you solve problems. It is no different with real estate
you buy problems, problem properties in CRE and residential: vacancy, under market rents and your business plan describes how you will be fixing them |
I was reprimanding my contractor recently for using the word nightmare. It is not a nightmare, it is a frozen pipe, how do we fix it in a sustainable way so it doesn't ever happen again |
| to solve problems you need an accurate perception of reality, no negativity or negative attitude
mindset & positivity of pbs= welcome pbs as opportunities to learn and improve one's skills. Becoming an expert at something means that you have faced and overcome most problems, what LPs look for in GP |
Glen's guest's idea of a project based on Glen's performance to get the family's buy-in
aspiration of leading a life of service: service to the tenants, to the investors...
work between 9-5 except emergency: put systems in place, some tenants are just bored
slow and steady wins the race | |
| qualify for the initial property with your current job |
| Find private lender to continue to grow |
| Refinance with a bank |
| Quit your job once you have replaced your income |
syndication | |
| educate yourself |
| join mastermind groups |
| invest alongside someone else to learn and build a trackrecord |
| talk to people around you that are interested in real estate |
| pull your resources together and take down larger deals as you keep growing |
affordable housing
human: care about people and what they go through
respect rules
forthcoming when late, we can come up with arrangement
empower the people that work with me
challenge of affordable and sustainable housing in Canadian climate that I wish to take on and contribute to
opportunity to improve the property and bring it to market
have enough savings so you don't run out of cashflow with 10-15% vacancy
outrun the competition
time to schedule viewings: I have systems in place but stay involved in screening: potential property to buy and know what questions to ask when screening a tenant
I like to ask tenants what they thought of the unit and how we could improve it and what's next for them
this famous saying: "Your network is your networth"
but not only from a materialistic perspective: if you have deals and connections you can find investors
the more connections you have the more chances you have to find solutions to your problems
you can use social media: LinkedIn, Facebook, meetups, covid is tough but it makes it eeasier to connect with others from the comfort of your office
I have a housing development project for co-living space so I have google alerts about certain topics - including sustainable housing - I read article daily and connect with the key players mentioned in the articles
invest in a province or state with no rent control to hedge against inflation
low income housing like MHPs is a safe way to invest
multifamily and industrial faired well during covid
in retail: make it covid/Amazon proof by focusing on neighbourhood services
Atomic habits: add habits to each other or stack them: swim, meditate for 30 min, listen to CRE podcast on the way back and forth
system with accountability buddy: track 3 things, 1 habit 30 lengths at the pool, 1 professional task and 1 personal task
gratitude list
translate goal into daily habits
Growing up in France you would be humiliated for making mistakes
in entrepreneurship, failures, mistakes are the most valuable lessons
when you make mistakes: take full responsibility, full ownership like suggested in the book Extreme Ownership by Jocko Willink
Real Estate Investing in Canada by Don Campbell published in 2009, found it in the office at work
it explained job growth population growth
and the 4 seasons of the real estate cycle: recovery, expansion, hyper supply, and recession
that's how I decided to invest
Dan Sullivan "Who not How" I started delegating the direct interaction to be in charge of my time so I get the messages in the afternoon so I can work uninterrupted in the mornings
I am still the one calling the shots and handling the contractors so that I know what's going on
Tenant are the front row consumers and the clients that need to be looked after and also the ones that can say when something is wrong with the property
Challenges as a landlord = only exposed to negativity and called upon when things go wrong and not thanked when you fix them, sometimes a sense of entitlement
Don't take anything personally - book The 4 Agreements by Don Miguel Ruiz
commercial = tenants improve your property, share on the TIs, the tenant improvements
Consumer Price Index |
hedges against inflation: gold, real estate |
| equity in a home increase as price of asset increases
| multifamily: shorter leases ie possibility to increase rents
| triple net property: increases are passed on to the tenant
| Oct 20: 18 year high in Canada at 4.4%
| inflation - the rate at which consumer prices rise
| correlation between cap rates and interest rates due to NOI keeping up with inflation, source CBRE
Multifamily & Industrial | | information asymmetry to find deals |
Increase in NOI will go way further | | |
Expand one's horizon: CRE and other asset classes, created a group on fb and on meet up where the focus is on commercial, we have people specializing in all asset types and we talk business and are even thinking of investing together | | |
Me: real estate portfolio, get paid from rent collection
Haven't monetized anything else: coaching, podcast, not really advertised but more present online so people know what I am doing in case real estate is of interest to them
Starting to let people in on my deals, syndication: starting small, weekly call with a friend who had the same mentor: how do we move the needle?
BRRR buy renovate rent refinance repeat
buy with high vacancy
buy with below market rents
buy from a seller who didn't maintain the properties well and rehab
buy on a large lot and expand or redevelop
buy a large space and subdivide it into microunits
house hacking to get started in real estate investing: you buy a house and rent out bedrooms in that house so others pay down your mortgage and you live free, building equity and with a property that potentially appreciates in value
bought a house with basement unit but we now use it for family when they come to visit after bad experiences: weed delivered to the home, tenant complained they got a parking ticket and tenant couldn't get in
can turn into a nightmare in a pro tenant environment if you have to live and share part of your space with tenants who are not paying or loud. I remember my parents used to rent a room to a student and we would cook for her.
lots of advantages to owning: you build up equity through mortgage pay down and appreciation in Ontario, can refinancing or take a heloc and use the funds to invest, can sell tax fee
personally, if I didn't have a family I may rent so I don't have all the upkeep to do or live in a condo where everything is taken care of for you so I can focus on my passions
With Carina we dive into land development: buying, rezoning to best and highest use and selling.
ocean of free and great resources out there: books, podcast, lots of thought leaders make knowledge available for free
limiting beliefs: think big, delegate, partner up instead of thinking small, proverb: alone we go faster, together we go further
lack of knowledge is a big hurdle but with democratization of knowledge it is becoming easier
discipline of saving for a downpayment (Wealthy Barber: pay yourself first), nice to own your own real estate
financing: be creative with financing, do a few deals on your own and then talk about it with others who are interested in real estate to grow together
house hacking, house flipping, BRRR strategy
Find someone who is 1 year ahead of you and ask them for advice
be diligent, download an exhaustive DD checklist online and read all you need to read on the matter, CRE can be demanding with lease agreements but be thorough and look at the small print |
| what to look for = rent bumps, who pays for what, when is it renewing which will determine financing
| get quotes from reputable contractors on the structural elements of the buildings + inspection, phase 1, bills, for a roof the inspector needs to walk it, not enough to use a drone
longer DD time to assess demand for the asset and test drive a property, be creative: local FB groups... |
Respond versus reacting - wait before answering, moved to email system that allows schedule send
Be a serving leader
Never blame, refrain from using pronoun "you", ever
Opposite of negative thought is complete ownership
Real estate developer, author and mentor, Darcy Marler tells us about the next big thing in Canada: land development.
Second mortgage, recommendation to not approach with this right away you would lose credibility otherwise, I wouldn't look down on people who get second mortgages, better to invest some money
Becomes easier the more you do it and invest either in a specific area or gain experience investing in an asset class
"Creative financing", where numbers meet imagination
important to show you know what you are doing, helps to have a plan, a vision
moving forward with the end in mind: proper set up by consulting with lawyer and accountant
what will my legacy be, how do I want to be remembered
a newspaper article talking about me in the third person as an exercise to start with the end in mind
entrepreneurs tend to have lots of ideas and can be scattered
a good entrepreneur is not someone who has a great idea but someone who executes well or surrounds him or herself with a team to execute well
tools to stay focused:
Focusmate
Daily accountability coach
Accountability partners for different projects: sponsor / MHP development / business growth / improve by being a mentor myself and helping someone else
$10k
invest in your education/training, take a course or hire a mentor, somebody who has walked the walk or is still walking it and sharpen your skills, network and find partners.
More creative and more self-reliant: live off the $10k and work full time on your skills: look at deals in the morning, listen to podcast in the afternoon, read books at night. Pick a niche and become an expert, go to all networking events
$50k
buy your first property and do some BRRRs on single family housings, turn it into a business, grow your capital base /or/ invest as an LP in someone else's deal, someone with experience to learn and watch your capital grow
$100k
Educate yourself, network, get a mentor, join a mastermind on real estate and do a BRRR in an asset class (buy a problem, multifamily is the most common one) and an area you have researched, scale in that area
$1M
Spend some money on legal and accounting to set up the proper structure, invest with someone else as an LP then invest in your own deals once you feel more confident and keep growing, leverage, create your own portfolio of properties: some value-add opportunities and hold for the long term for next generations if this is your goal
2 scenarios
1. enough for a downpayment
- research a market where the numbers make sense with job and population growth
- BRRR strategy: purchase a problem/value-add, refi and repeat to slowly grow a portfolio
2. not enough for a downpayment
- sharpen your skills: listen to podcasts, look at deals daily, make connections with real estate agents so they include you on their mailing list, network
- find a partner: you bring the deal, sweat equity and partner on a deal: JV or other structure, get started and do a few deals that way, this will allow you to grow a capital base
- better to have a small piece of something than nothing
make sure it is not a one horse town
private sector has more jobs than public sector
good place to start a portfolio but usually not very liquid so may be difficult to exit unless you refinance until you liquidate at the end of your investment career, accept to be creative
Logan from the True Commercial Mastermind is great at it and I learned a lot from him
I was cold calling tenants to figure out phone number from landlord, soft touch
cold called landlord, spoke a lot about myself and asked for authorization to call back in a year or 2
Friendly calls around the holidays
red flags: want to move in right away, don't want to see the unit, mentions cash now, wants to barter, confusing information, not a good fit: too many people for the size of the unit | | |
3 questions: when are you looking to move, who would be living with you, where do you work | | |
3 step process: email then phone: try to have a long conversation, then check on Facebook and social media | | |
references: former landlord and current employer, I have had some fake landlords who sounded more like friends so I asked some targeted questions, figure out if they paid on time and how they kept the place | | |
| | employer: number of hours worked a week, how long in the position, job title and planning to keep them? |
Key: I love holding others accountable
With no boss, being self-propelled = define your own objectives, plan to attain them and need assistance staying on track
Translation = translate larger goals (quarter) into daily actions
Enjoy being held accountable: daily, weekly, bi-weekly, monthly even if I only do it the day prior or the day of
I am very interested in green energies and green buildings so today we dive into solar panels with Darcy White who is also a co-host on our other show with Glen Sutherland called Advanced Real Estate Talk.
first loan I qualified for was based on personal income, and I didn't qualify for much
private
refi with commercial lender
bridge loan in situation that allow for it: you buy a property that needs extensive renovations, rehab it and refinance it with a traditional long term loan
I like this strategy: refinance rather than sell, tax free funds you can extract by getting a new loan
real estate appreciates over time but depreciates for tax purposes
legacy for children
buy, rehab, rent, refinance, repeat
powerful strategy to grow one's portfolio: since you extract the funds you have invested once the property has gained in value and invest them somewhere else
I have done it on several properties and it took me longer due to refinancing conditions of my financial institution but it was great
In this episode we interview Adney, a Canadian investor with a special focus on large residential and non residential commercial: medical office...
rate of return of an investment property based on the income (NOI) that the property is expected to generate
say you buy a property for $1M, at a 10% cap, means NOI is $100,000/year
allows to compare investments with each other
the lower the cap rate, the more expensive the property
you make money in the differential between the cap rate and the interest rate on the debt
Gross income (rents, ancillary income such as laundry, parking),
to which we usually subtract a vacancy rate and an economic vacancy (difference between the actual rental income and the gross potential rent of a property)
and then the operating expenses: PM, insurance, property taxes, snow removal, lawn care, repair and maintenance (higher on older buildings)
Allows to calculate purchase price if you have the cap rate: NOI/Cap rate
Cash on cash is calculated once we deduct the mortgage payments from that number
motivated me to write daily, 1st book about my journey so far: building a small portfolio of rentals towards financial independence
Resistance: diffce between life we live and potential life we have within us
Do what's important before what's urgent
a professional recognizes their limitations and hires help
There are deals everywhere BUT some areas don't cashflow as well
Therefor people look for parts of the country that cash flow better: lower purchase price but rental rates not much lower
Use of technology
Start with smaller project
Do it yourself first, outline the main tasks and then delegate those tasks: Michael Gerber, The E-Myth Revisited
Large vendor take back, need to convince them or show skin in the game
Using equity as a syndicator
Using a fund
Low rents
Vacancy
Building with a bad reputation, turn it around
Make sure you raise enough capital to overcome the problems
In this episode we talk to Adam Adams about multifamily properties and how to raise capital using a podcast.
Ad on the property: vehicle count per day
Retail: Facebook community groups
Target businesses on Fb, that way you get access to the owner
Network in the industry you are targeting
define your criteria and then talk to brokers and wholesalers who specialize in the area and asset class you are interested in clear vision
in the US: call sellers, some people do it, I have a friend who has a fund and specializes in MHPs in Az and has the list of all the owners whose assets he is interested in and he calls them regularly
websites: I have the disciplin of looking at deals daily on CREXI and also using this tip from one of my mentors: look for commercial properties listed on the websites of residential agents
as I check references from tenants I initiate a rs with a fellow landlord for future purchase
Nice introductory email presenting yourself in a few words and then what you like about the opportunity and what may be challenging
Provide them with the information they will need: personal statement, income and expenses, rent roll, T12 if needed
Important first impression when meeting a potential lender: provide all the information needed, including a portfolio of investment so far
Answer right away about steps you are taking to get them the information if you don't have it readily available
In this episode we interview Hunter Thompson from Asym Capital. We discuss different asset classes including mobile home parks and self storage.
20-80 rule: focus on the actions that will move the needle
translate the big goal into daily activities you accomplish religiously
stay focused on the goals and review them daily
work-back plan
Service versus victim: greater purpose so as not to take things personally
Think big and keep the big picture and the vision in sight
Every level has its own devils
Mindset and actions that are in alignment
Don't use the word "mentor"
Call when you have a problem or need a list of next steps
Keep the conversations brief: 10-15 minutes every 2 weeks or every month
Mainly to gain direction
With Ryan Narus from the Archimedes Group, we dive into sales and mobile home park. This interview is packed with valuable information for those looking to start investing in mobile home parks, a recession resistant asset type.
With Pete, we dive into mobile home parks in Arizona: how to invest and turn them around. Pete tells us about his journey from selling mobile homes and turning them around, scaling up to mobile home parks themselves and being involved in many different businesses including being a broker of record.
My first park
My second park
Tenant Owned Homes vs Park Owned Homes
Improvements to justify rent increases and increase pride of ownership
person to handle tenant requests
I handle the contractors so I know what goes out
a superintendant for each building
handy person versus professional: if need a snake or electrical + by the hour for major jobs
save time
avoid costly mistakes
difficult to stay the course on your own
to assist with difficult decisions
Shane has a ton of experience raising capital to invest in commercial properties. He also does development: he has been involved in developing a mobile home park in the Muskoka, north of Toronto and small bay industrial in the Calgary area. He is based in Calgary and has invested in multifamily the US. We discuss his favourite strategy: value-add. He has a coaching program where he helps investors get started in commercial.
Logan's post
talk Commercial Real Estate
make it real
make Commercial Real Estate accessible
daily actions
create index of terms found on Bigger Pockets
read books: confessions of a real estate entrepreneur, Crushing it, The Real Estate Game
Create a group and be involved in conversations about commercial
Commercial tenants improve your building
The property qualifies for the mortgage
Potentially larger gains
More sophisticated players
Jack is a real estate investor from Phoenix, Arizona who specializes in mobile home parks and uses funds instead of syndications as an investment vehicle.
Why I got interested in commercial
1. the idea of dealing with business owners rather than tenants attracted me
2. was told that more money could be made in commercial
3. I like the sophistication it requires
4. offers a great diversity of products: retail, office, medical office, veterinary, industrial... which can seem daunting at the same time if you look for deals
Tricks of the trades of investing in residential
1. overcoming the 5 property wall: dealing with B lenders or approaching the commercial side from an A lender
2. dealing with contractors: avoiding micro management
3. tenant screening: get the tenant to talk and call their references
4. tenant satisfaction: always be professional and if they upset you, wait at least an hour before you answer. Watch your emotions
The basics of investing
1. job growth: more demand than supply
2. the real estate cycles: recovery, expansion, hyper supply and recession with supply of rentals as an important indicator
3. leverage: getting debt. Say you buy a property for $1M, put a 30% mortgage and through forced appreciation increase the value by 10%, you went from $1M to $1.1M or from $300k of invested capital to $400k ie 33% increase
4. budgeting: important to reinvest in the properties, initially you may be focused on growth but to maintain units rented, you need to reinvest
With Scott we dive into infill development of a particular product: workforce housing for multigenerational households. Scott explains us why the developer is like the conductor of an orchestra. An episode filled with insights about real estate development for those who are interested in that field.
My beginnings in residential |
1. How I picked the area
2. Buying a fourplex
3. Remote property management
4. Support of local realtor for lease signing and dealing with local contractors
Why residential
1. All I could afford
2. Good place to start to get an understanding of what is involved in being an investor and a landlord (customer satisfaction, relationship with lenders...)
3. Everybody needs a place to live
4. Education I could find revolved around residential
What led me to start investing in real estate
1. I worked for a foundation and the good they did was made possible by real estate, commercial real estate where the founder started from nothing when he came to Canada
2. freedom, financial freedom, freedom with my time
3. interested in financial literacy
4. Robert Kiyosaki and stop trading my time for money, have your money work for you
With Norman, we discuss
- micro-units, aka lodging houses, and
- best practices on how to manage tenants and rentals
We benefit from Norman's 40-year experience.
In this episode we dive into industrial real estate and discuss:
- owner users
- the different kinds of leases
- industrial versus other commercial assets
- the rise of online shopping and fulfillment requirements
- vacancy and availability rates in major Canadian centres
- the relationship between cap rate and bond rates
- Amazon, Walmart, Shopify, Wayfair
- last mile delivery and end consumer
- multi level warehouses and the future of industrial
- the future of office space
Gayland Panko acquired $7.8M worth of real estate in 1 year.
With him, we discuss:
- due diligence
- plazas
- multifamily
- parking lots
- medical buildings