Landglide, Working with Contractors, Exchanging Resi for Commercial (Office Hours)
Each week, I'm going live at 8:30am CST for my "office hours" to answer your questions about commercial real estate on the show. Let's hear what you'd like to know when it comes to brokerage, investment, and development!
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Key Takeaways:
Tyler hired an office manager to help run his company and is planning to hire a sales manager next to lead the brokerage team.
He is planning a commercial real estate conference in Nashville in October, with exclusive content for his CRE accelerator members.
Tyler is conducting final interviews this week to select an apprentice for his company.
Tyler recommends using apps like LandGlide and CRS Data for real estate research and analysis.
He advises getting an experienced partner or consultant when doing new construction projects to avoid issues with contractors.
Tyler is open to joint ventures outside his state, but prefers to work with his accelerator students he knows well.
He suggests selling residential rental properties and 1031 exchanging into commercial real estate for more passive income and tax benefits.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Episode Transcript:
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Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Series central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take your career to the next level, cre Central has the resources you need. Visit www dot cre central.com. To learn more. Welcome back to the commercial real estate investor podcast live from the cowboy group studios. For another episode of office hours. We're going live every tuesday morning 8:30am central standard time to answer your questions about commercial real estate, have any questions about your investments, finding deals, working with brokers, whatever it is, jump in the live chat happy to get around to your questions. While we're waiting for those to come in. jump in on some updates over the past week. Last week hired an office manager very excited about this one, I've actually never officially had an office manager in the firm. I've had a couple of assistants have had some operations, you know roles. But having an office manager is going to be a game changer for us. Not sure if you've ever heard of the culture index, but we hired a man named Carrie to run culture index for us and do the personality assessments on our hiring. And it is a complete game changer. I was trigger shy on hiring for the longest time because I'm just not the best when it comes to that. And having carry was a was like I said a total game changer. So to put it in perspective, we had 66 applicants for the job. We had 17 that filled out the culture index. And of those 17 Two were dead on bull's eyes for what we were looking for in hiring in this position. Ended up having one interview hired her on the spot and she started yesterday. So going through the onboarding process, really excited for that she's gonna be helping me a lot with the podcast scheduling guests working through running the day to day the company's managing our Siri accelerator community because that has grown beyond what I can handle by myself, which is exciting to see. And yeah, highly recommend culture index, if you are ever doing any hiring, it's phenomenal actually have my girlfriend take it. And then I had Carrie read to her the differences in our personalities and how we interact and it was pretty great. So really excited about that. We're actually planning to hire a sales manager next, for the combo group, I need somebody to come in and run the sales team grow our operations there, right, someone to hire, train and manage the brokers, because we are looking to start expanding that company into other markets here pretty soon, which is exciting to see. So we'll move to Chattanooga first, and then looking at, you know, Louisville, looking at Huntsville, Birmingham. Some of the more tertiary markets within a two hour radius of Nashville, we'll see where we go, but excited to start expanding the cowboy group and moving our reached out to southeast because anywhere the cowboy group goes, I can take my property management company and I can start buying assets. And that just opens up a whole new world of possibilities for us. So gives me a little bit of scale as we're going into new markets, which is always nice. This past week, we have gone all in on planning our conference this fall. So if you've been listening for the past few weeks, you've heard me talk about it a little bit, but very excited. it'll likely be in October. So save the dates. Save all weekends in October. I haven't picked one yet. We are going to be hosting a commercial real estate conference here in Nashville. Unlike any other commercial real estate conference, it's out there. There are some phenomenal commercial real estate conferences that exist. But a lot of them are very heavily institutionalized. And I don't necessarily think that global economics matters to the average commercial real estate investor will have an impact Sure, but you you need to be more worried about your local market dynamics than what's going on nationally or globally. And so you know, we're going to be bringing in some pretty awesome speakers. We'll be doing a an exclusive day for the serie accelerator members to come hang out with me tour some of my assets, get some behind the scenes looks at all of the properties that we have here in Nashville and what we're doing with them, and then you know, some workshopping masterminding and then of course, probably on either Friday or Saturday, we'll do a full day conference, a couple of keynote speakers. We're working on those right now. So I'll keep you in the loop as to who is going to be headlining the event. It's gonna be a lot of fun, really excited for it. Again, there's nothing really like it. So I figured you know what, why don't we start doing it. And let's do it in Nashville who doesn't want to come hang out Nashville for a weekend. And then this week, we're also hosting final interviews for the apprenticeship. I've had some phenomenal applicants really appreciative of everybody that reached out. And this week, I am reaching out to our three, two or three finalists to run through the final round. And then we'll make our selection here soon. So if you are on that list, then just keep an eye on your inbox for an email from me this week. All right, I'm gonna open it up. Looks like we've got a question from Anthony sending morning tower. Do you have any developer contacts in metro Atlanta, I have a wholesaler contact who has 20 acres under contract in Conyers, Georgia. 15 minutes up the road from where Amazon is going. Hey, Anthony, I do not have any developer contacts in Atlanta that might be interested in that. What I would recommend is just going out and looking at who has bought land similar to that size. And start start calling on those developers seeing if they'd be interested in it sounds like an interesting location. I would have to dig into the area a little bit more but I mean, Atlanta is booming. So there's there's a lot of stuff going on there. Petru saying, Hi, what's going on? Patrick, thanks for joining us. Ricardo, do you think residential development is an Okay, start? Absolutely. I love residential development. I mean, I, I couldn't sell residential homes myself, you know, God bless those that can't. It's just too much of an emotional process for me. So even when we develop residential units, I will hire a residential sales team to do it. They're just better at it. Right? Commercial real estate brokers, you know, even, you know, eyes, the builder or developer, I'm not qualified to really go out and sell those units. So, you know, I know a lot of people will try and talk trash about residential agents and what value they actually bring to the table. And I gotta be honest with you, the ones that are worth working with are absolutely worth working with. They have better buyers, they know how to negotiate the deals better. They know how to hold everybody's hand to closing and make sure the deal gets done. It's absolutely worth the Commission's that you pay them. So yes, I love residential development. I think it's a great start. As long as you do it right, you can get a little cash flush. Investors like it because it's a quick turnaround. You know, the the only issue of course, is that you don't really you may not get into the long term capital gains. Era, so you're probably going to have to pay a little bit more in taxes. But you could always do a 1031 exchange, figure it out from there. Anthony's saying, Thanks, Tyler. Absolutely. Anthony. Happy to help man. Derek morning, Tyler, and all morning, Derek, what software's both PC and phone do you use most in your real estate decisions? That's a good question. I've
actually never gotten asked that before. Okay, so the the piece of software that I use most on my phone, the app is an app called land glide, l a n DGL. IDE, I think it's like 10 bucks a month. But it is phenomenal. It is basically like the your Metro tax maps over Google Earth. And so I can actually zoom in, you know, on all of these parcels. And you know, if you're watching on YouTube, you might be able to see a little bit of what I'm showing you here. But I can actually zoom in on the parcels. And without even having to click into it, it shows me who the ownership entity is. So you know where the property lines the boundaries are. So I actually learn quite a bit about my market by just using land glide. So that is that is probably one of my favorite apps, I use CRS data quite a bit. That's a phenomenal piece of software, you know, that's on the computer, attaches to your tax records. And you can get quite a lot of data out of there even like if it's owner occupied or not, you can get if they have a loan on it or not. Which helps, right I mean, if you want to start targeting specifically for seller finance opportunities, while somebody that doesn't have a loan on their property has a higher likelihood of actually being able to sell or finance. So something to keep in mind for sure. As you're going through that process. Try to think of what else you know, Craxi is good. I use my own Excel spreadsheets when I'm doing my underwriting. I mean, we've created those over the years of just taking spreadsheets, adding to them, tweaking them a little bit here and there as we need them. And I feel like they're at a phenomenal spot now. And I mean, outside of that, you know, as far as like tools that I like to have, I mean, an iPhone, just so that you can take a smartphone rather, so you can take good pictures and log those. You could get a drone so that you can see the roofs I actually did have an instance once where we were in a competitive bidding situation and And the sellers had a bunch of people out to look at the building. And it was a rundown building. And nobody was able to look at the roof. So a lot of people were actually afraid as to what was going on. Well, I got a drone up there, and looked at it with my client. And we were able to make a better offer on the spot because we knew exactly what was going on on the roof. And nobody else did. So gave us a little bit of an advantage. So things like that make make a big difference. Let's see, Ricardo is asking, Do you have a GC license Ricardo, I do not. I am going to be getting one this year. Whenever I find time, I have been absolutely slammed, I thought I would have been able to go ahead and take the classes by now. But this year, it's just been nuts. For me. I mean, I was I was looking at my schedule for this fall, you know, my girlfriend's going to Europe, with her friends, and I'm not even gonna be able to join because we have something going on almost every single weekend, this whole loan, and a lot of that I'm having to plan for now. Right? I mean, Logan Freeman and I are launching a mastermind for commercial real estate brokers on October 1, and we're doing a 12 weeks to break into cre free class starting July 1, that we've got to be hosting every week. And on top of that, you know, the Siri accelerator program is taking off, I've finally started the construction on my hotel. So now I'm dealing with that I'm actually headed over there right after I get off of this live stream. So and then we're you know, finalizing some approvals for a project and a Chattanooga. So I'm hoping to have those here in the next couple of weeks. And then we can start on that too. So you can see why I am in in hiring mode. I need some help with everything that we've got going around here. So I don't have my juicy license yet. It is something that I would like to have. It is very valuable. Whether you use it or not. Right. It's kind of like a water gray. Yeah, you don't necessarily need to practice law in order to get a lot of use out of a law degree. Robin sitter saying good morning, Tyler, thank you for the tip. On looking into tax records for off market properties. I found a property for the medical supply company that I was looking for. Thank you again. Absolutely. Robison glad to hear that that worked out, man. That's That's great. That's really exciting. Keep me in the loop. I know what's going on with that property. Robert is saying, hey, Tower, small multi and flipper here. I have my own construction team in LA and do small ground up myself seems to me 60% of commercial investing is all about knowing your exit in the beginning. Oh, that's a good question, Robert. So yes, and no. Right? I got asked this question or a group coaching call, I guess I don't know, a few weeks ago. And it was you know, how, how stuck? Are you in your, in the, like your insurance plan, right? Like whatever plan you put together going into the project? How are you 100% stuck on that? And to me, it's like, I don't know, 5050, right. If we raised a bunch of capital to go do you know, a food haul, I'm probably going to be doing a food haul unless something really compelling comes along that says, Okay, maybe we should actually pivot this a little bit and do something else. But even then I wouldn't be having to have those conversations with my investors, let them know what's going on, get their approval, make sure everybody's on board. So I would say that I am pretty determined as to the path forward, whenever I buy a property, here's our exit, here's how we're going to be doing things. That being said, I'm very open and flexible, right. So for example, we own an office tower in downtown Chattanooga that we bought in January of 2001. And we sold it last year. And I had planned I mean, it was in an opportunity zone, we'd raise capital for an opportunity zone, and we were planning on holding it, you know, renovating the building and holding it for 10 years? Well, we had an off market offer come in for two and a half times what we had paid for it. So I looked to the investors and said, Hey, I think we should take this. This is pretty good. It's the amount it's the same amount of money that we would make holding this for seven years. So will we make less than the project overall? Absolutely. Or do we have to take any risk? No. Can we go ahead and cash out today? Sure. So it's kind of a no brainer for us. So I'm always open minded, but you want to have a plan. You don't just want to be scattered, kind of, you know, floating all over the place. You know, trying to figure out what you're going to do. You should have an idea going into it. Ricardo Singh is Land God your primary app for finding land. I mean, yes, and no, I'm not necessarily looking for land. I have people that are bringing me deals now. So I don't have to go out actively looking for them myself. If I was actively looking for land, then yes, probably because a lot of looking for land is driving around, right. It just is that or pulling you know, like specific criteria from your tax records and then going out and looking at those parcels and when God helps quite a bit Derek Saying thank you please make a video on the software's. Absolutely. Derek will take that into consideration. Appreciate it. Isabella. Hey, Tyler, hope you're having a good day. I'm having a great day. It's, it's awesome. Are you still making a second wash? Yes, Isabella, I am working on it. That is part of the approvals that we are working on in Chattanooga right now. So hopefully, we will be doing a second version of the wash down there. We really tried to do the wash in Nashville. I've had I kid you not probably dozens, if not over 100 people reach out about that concept, and doing it in their hometown and partnering with me on it. And I have told everybody about it. As long as I can do my due diligence on you, and I like you as a person, I would be more than happy to partner with you in your hometown on a second version of the wash. But here's why not a single one of those has come to fruition yet. The wash here in Nashville was a perfect storm. And a lot of municipalities do not have the ingredients that created that perfect storm. So it was a corner parcel, point one acres, so it was affordable, it was very, very small. And we also had zero parking requirements. So that's a big one. Because if we had to have parking, for that site for you know, five restaurants in a bar, then I would have needed over 20 parking spaces, which I could not I could not have feasibly fit onto that site. So that's the biggest issue. It's also in a walkable area, a walkable neighborhood, where there are tons of houses, tons of students, tons of younger families that can easily get to the site. And there's also an office across the street. So it's just a kind of perfect location for what it is. So it's really tough to reiterate that. But if you can get a, you know, a decent sized parking lot. Absolutely. I mean, especially if it's in a good area. Robert is say, Hey, Tyler, have a call with you coming up. Awesome, Robert, looking forward to the call. I am a serie broker looking to transition from broker to investor, I have six units, but looking to scale. Also, man sounds like you've laid the right foundation and you are ready to grow man. Looking forward to our call. Evan, do you think flipping new construction flex space is a good strategy? Or do you think holding the property for the long term is better? Pros and cons? So Evan, I would want to confirm Are you building this flex space? Are you buying flex space and then flipping it? Because those are two different things? I would imagine if you're saying new construction, you're probably building it yourself and then selling it. So I actually spoke to Hamza always flex space group last week. And here's what I told them.
I said, out of every five flex space developments that you're doing keep one, right? That way, you know, because the great thing about flex space right now is that you can get a decent amount of money for these projects. If you build them right and you lease them up, right, you can get a decent cap rate, right and move on to the next one pretty quickly. Yeah, Evan said he's building so you can get a decent amount of cash quick, right? So what I say is, if you have the ability to find multiple parcels of land and build, go out and keep 20% of everything that you're doing, right, that way, you can get enough cash to basically have that free and clear and then continue forward. And I know that that's super, like, hot. I mean, that's risk averse, right? It is being very conservative. But I believe if you're going to hold a portfolio for the long term, maintain as little debt on it as possible, if you can pay for it in cash, awesome. Just because you'll never get yourself into a bad situation. And that's what you don't need when it comes to a long term portfolio. Honestly, your cash on cash returns start to matter a lot less when you're looking at it on how much you're making on a monthly basis and how much in cash you have in the property that is really not at risk, because you don't owe the bank or somebody else a lot of money on it. So I would say, you know, go build for use that cash to pay, you know, 100% for one and then use the other cash to go start the six right that way you can keep it going. So yeah, that's that's, that's my opinion on him. I love that strategy. I mean, we're doing that right now. That's that's kind of how I that's the strategy that I holistically operate my portfolio under. By the way, I don't know that I've ever really articulated that to everybody. But the strategy that we implement as let's go do all of the sweat, you know, all of the hard work on Project A, make a bunch of money and then 1031 exchange that into Project B that is totally passive. Right. So I'll give you an example. We had a piece of property, land right outside of downtown Nashville that we raised shown for higher density and sold, well, we're under contract to sell it. And by rezoning it, we tripled the value of the property. So you can imagine, like we actually, I guess, 6x, or equity. So pretty good deal. Now, we put a lot of work and took a lot of risk on the front end to make that deal worth more. So once it sells, we're going to 1031 exchange that into a Starbucks, right and forget about it. And then we'll go and repeat that same process on the next one. And so you can see, like, okay, it doesn't actually take that many projects for you to build up a lot of equity relatively quickly, to get the kind of passive cash flow you want, as long as you're willing to put in that sweat equity, and force appreciation on deal a, and then you can 1031 exchange and to deal b that is just passive. And then go repeat that cycle. If you do that five times, you're making $10,000 or more a month, and you don't have to worry about working ever again. Chris is saying if you have no experience working with contractors or doing rehabs? Would it be a bad idea to do a small new construction job residential? Or would you recommend getting experience with a rehab first. So Chris, I would say, find somebody that has experience working with contractors or get a hell of a team, right, make sure you have a badass attorney, make sure that you have a really good architect who can help you oversee what is going on with the contractor. Because where you can hire a project manager, right or an owners consultant, right. That's what we I, my development company serves as the owners consultant to other people that are running commercial construction projects for the first time. And we just come in, and we consult them on how the project is supposed to be done. Because they'll hire an architect, they'll hire a contractor, but they still don't know what the process is supposed to be. And so we will actually come in and man and help them. And I'll tell you, why a lot of people have no clue what is going on in the problem. And it's not your fault, right? Like you just don't know what you don't know. And so I always tell people, I'm very cautious diving into something if you've never done it before, find a partner, find a consultant, find somebody that will be unbiased on the entire process and walk you through it. It will it cost you some money to pay a consultant, for sure. But look at it as education, they are going to teach you everything that you need to know about how the process should be run. So that on your second, third or fourth deal, when you decide to do it yourself, you know exactly what to do. And that contractor is not going to price gouge you. You're not going to have any permitting delays, because you have somebody that's actually standing there saying, well, actually, you should be down at the city talking to them right now getting this permit. Why are you not doing that? You know, things like that. make all the difference in these these projects. Let's see. Karen is saying live morning, y'all from Philadelphia. Hey, Karen, good to see you. Derek, are you willing to do joint ventures outside your state? And what would be your criteria and making that decision? Derek? Yes, I am. I am very open. I have done a couple of them. Typically, I only do them with my serie accelerator students, because I get to know them really well. It's really tough for me to just say, Hey, I'm willing to, you know, go get married to somebody I don't know. Right. Because if you think about it, like a business partnership, it's it is a business marriage, you are going all in with somebody and you're tying your wagon to theirs and that can be very risky for both parties, really. And so that's why I have almost exclusively kept that to my serie accelerator students and I have done a couple of deals that way. Just because, you know, I'm working on those deals with them for a while, then I can, you know, make a decision as to move forward or not. But as far as like the criteria goes, as long as it's a good deal. I'm all I'm all about it. Right I'm looking for that scale. I'll come in as a key partner I'll come in as the advisor you know, I'll make the bank happy with you know, the commercial real estate investment and development experience whatever, you know, my partner needs you know, I can kind of be there for so it's, it's fun. It allows us to scale that's for sure. clothesline laundry saying good morning. Good morning. Good to see you. Thanks for joining us. Let's see Ever After entertainment Am I crazy for considering the idea of selling my four single family rental properties to build one flex warehouse four Plex ever after you are not crazy at all. In fact, that's probably the most brilliant idea you've ever had. I'm being facetious a little bit but look, yes, sell your residential portfolio and buy commercial real estate now. Don't take 100% my word for it just because you jumped into a live stream to get my advice. I would have to look at your portfolio and you know take a look at you know what kind of flex space you're gonna be getting. What kind of market are you in? But I have advised tons and tons of people over the years that are selling there. Residential portfolios and 1031 Exchange in a commercial property and I don't have a single person, not one person that was not happier after the fact. Because you will typically make more money in commercial real as long as you do it right, you will typically make more money more passively in commercial real estate. And you get more tax benefits. And honestly, like, I just, I don't want to ever own real estate where somebody is paying me to live there. Like that is just, it's terrible. But to be honest with you, when it comes to evicting businesses, I couldn't care less, it doesn't bother me one bit. But I could evicting a family out of there. I just couldn't, I couldn't do that. I know it's part of it. And if somebody's not paying you, I get it. But I just don't want to be a part of that. I don't want to deal with it. So that is, that's kind of my take on it. I think commercial I mean, commercial is just all business. Like there's no feelings in it. It's just relatively straightforward. So yeah, I mean, I think looking into selling your four single family rental properties and building a flex warehouse, especially with where that market is headed. I think it could be a great idea. Chris is saying great advice, brother, I'm more than likely going to JV with someone use my cash and oversee Absolutely, Chris, I think that's a great idea, man, get a get a great partner, you know, make sure you've got an operating agreement, get it all in writing. But I think I think just partnering with somebody, like whenever you're doing anything new, just get a really awesome partner. And that's honestly, like, where networking comes into play. You know, I mean, back in 2018, I met a guy. And we ended up doing a fair amount of business together, but we never parted on anything. Up until, you know, 2021, three years later, we ended up partnering. He was a hotel guy, I was buying a hotel, I didn't know anything about hotels, I mean, I could do my research. And I knew how to do a redevelopment project and branding and marketing, all that kind of stuff, but the actual intricacies of running and managing a hotel. So I brought him in, and I said, Hey, I'm gonna give you a share of our general partnership. You don't have to do anything else. I just need you to be here to advise me as we're going through this hotel investment process. And he was all about it. Right? So I mean, always have those contexts because one made my investors feel better. It made my bank feel better. It makes me sleep better at night. Right? We have Matty HSN on here not too long ago, and he has his swan. And I love that. I just love that analogy. Swans sleep well at night number, his swan number. So keep that in mind. Jeff is saying I'm looking to do this right now in the San Antonio area with his four single family rentals. Yeah, man, sell them sell, find one person that will buy all four of them at the same time. 1031 exchange it into commercial property. And, you know, live a better life. Tony is saying when you say commercial real estate, which
type are you referring to? So Tony, commercial real estate? In my opinion, I think I mean, there's multiple opinions on it, I guess. But it's like commerce, right business transact transaction. So office retail, industrial and hospitality. I know some people will lump multifamily into commercial. In my opinion. It's not commercial, although you will get a commercial loan. So I mean, there's there's some crossover there for sure. And a lot of people will talk about multifamily, the same but I'm talking office retail, industrial and hospitality. And do I coach in the flex space? Absolutely. I love flex it is. I mean, I own one and a half million square feet of industrial real estate. I could not be happier about them. Todd is saying no more. Whoop, Todd No, I don't have my whoop bed anymore. Nice of you to notice. So you know, funny enough, I had it for over a year. And I just I don't like wearing things I like you know, my my high school graduation ring is the only piece of jewelry I ever wear. I've never worn watches. I've never worn things on my wrists. So I honestly just got tired of it. And I feel like after a year I collected all the data that I needed, which is basically go to bed earlier was that that was the one thing wearing a whoop that like totally changed my lifestyle. Ever After is saying quotes for the flex warehouse space have been about $125 per square foot what would be the reasonable in normal cost for land? Gosh, ever after I mean, I would hope you know right? Yeah, Ron, what's up man bronze jumping in the live chat saying is that just hard cost? And 125 a foot that should be like all in at $125 per foot including land. So I don't know which market you're in. Ever After. But that could that sounds a little high to me. You know, I mean most, most flex space developers are wanting to be in that like 110 to $125 a foot all in price including land. Usually for land, you want to look at about $5 a square foot. So you know kind of kind of in that way I do have a couple of videos on flex space, highly recommend checking those out. And that should kind of get you go and we dive all in into the numbers of doing flex space. So appreciate you guys for joining me on this week's episode of office hours. We will see y'all in the next one. Are you looking to take the next step toward investing in commercial real estate but don't know where to go? Series central offers a comprehensive education and coaching platform designed to help you get started. Our online courses cover a wide range of topics from the fundamentals to advanced strategies, ensuring you have the knowledge and skills needed to thrive in this competitive industry. As a member, you'll gain access to our exclusive online community and monthly group coaching calls, providing you with valuable networking opportunities and personalized guidance from experienced professionals. Whether you're a beginner or looking to take your career to the next level. Cre Central has the resources you need. Visit www.crecentral.com To learn more
Each week, I'm going live at 8:30am CST for my "office hours" to answer your questions about commercial real estate on the show. Let's hear what you'd like to know when it comes to brokerage, investment, and development!