Brokers Mastermind, Luxury Flex Space, and More (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!

Get commercial real estate coaching, courses, and community to jumpstart your investment journey over at CRE Central: www.crecentral.com

Key Takeaways:

• Seller financing is recommended, as it allows negotiation of debt terms. Other financing options discussed include joint ventures, restructuring current debt, and raising capital through investor pools.

• High insurance rates in Florida can make deals difficult to make work financially.

• Significant tax benefits of cost segregation, citing a $120,000 write-off on a $480,000 building. Industrial outdoor storage facilities may have limited depreciation opportunities.

• Brokerage tips for new agents: recommends joining a retail team or borrowing an experienced broker's track record to gain an advantage. Cold calling, door-to-door outreach, and direct mail are effective strategies for new brokers.

• Developing successful micro-restaurant projects: Key factors include no parking requirements, proximity to urban core, and embracing the neighborhood.

• Launching a brokers mastermind on October 1st. Planning an in-person Serie accelerator mastermind event in Nashville on October 18-19.

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 cobble group Studios here in Nashville, Tennessee for another round of office hours. Every Tuesday 8:30am central standard time I'm going live and answering your questions around commercial real estate. We'll see how good the advice turns out to be. But if you have any questions about buying your first commercial property, buying commercial property in general, what types of assets you should be investing in, jump in, that is what this time is for. I'm here to give you a little bit of coaching. Couple of updates on me from the past week. I was out in Alabaster, Alabama, just south of Birmingham on Friday with one of my care accelerator students, Marcus, he's down there developing flex space and actually just bought another office building, that he is also converting into flex space. So we went down there to film a story of the deal for this channel. So keep an eye on on that. Hopefully that will be dropping here in the next 30 days or so phenomenal tour. I mean, Marcus really cares about his projects really cares about his tenants. And we talk a lot about how the intangible fact of being a good landlord can really make a substantial difference in the types of deals that you're doing. And the financial outcomes and returns and rewards that you get from being a landlord are phenomenal conversations with Marcus. So great to get to go down there and spend some time looking at his deals. And when I tell you that he has built the most beautiful flex space I've ever seen. I am not exaggerating one bed. I mean, we're talking brick facade, cedar and metal overhangs, fully finished out interior warehouse space with, you know, insulation, air conditioning, I mean, they're really, really nice. So it's something that a lot of people would not consider when it comes to flex space. But I think spending the extra money is worth it. And so we dive into that in that video. So keep an eye out for that one. That was a lot of fun. We are also in the midst of planning a serie accelerator mastermind event here in Nashville, October 18. And 19th. Really looking forward to that one, it will be the first in person meetup that we have ever had. So very excited to get to meet everybody. And it's a lot of fun getting to plan an event and figure out how we're going to show off Nashville. Right because my students are I think we have one from the Nashville area. I know we've got one up in Bowling Green. But other than that, you know we're from what Silla Alaska all the way to Pittsburgh, they are all over the place. So it'd be fun to get to host everybody in Nashville, show off some things that are very, very, very Nashville while we're doing it. By the way, if you're interested in joining the Siri accelerator mastermind, I take all of the intro calls you will be talking to me that way I get to learn more about you I'm very picky and selective about who I bring into the the accelerator mastermind because I'm spending a lot of time with this group. And so selfishly, I want to hang out with really cool people. So we've gotten an awesome group together, which has just made it so much fun for me. We had a group coaching call last night I love just being around everybody. Speaking of masterminds, we are launching a second mastermind on October 1, if you've been following me for a little bit, you probably are aware of that. But the brokers mastermind if you are a commercial real estate broker, whether you are just getting started, you've been in the business for three 510 years. That is the mastermind for you. Not only will it include a step by step blueprint of how to become the best broker possible, we're going to put you into a community of other commercial real estate brokers so you can tap into that brain trust and learn from best practices of other salesmen across the country and sales women and it's gonna be a lot of fun. We're putting everything together for it right now. Logan and I are it's gonna be a phenomenal mastermind. If you want to sign up for the waitlist. We are Gonna start sending out emails here pretty soon, we're gonna have a lot of incentives for the founding 50 members. So if you're interested in doing it at all, I highly recommend jumping in on that portion of it. Go to brokers mastermind.com. That is where you can join the waitlist. That way you can hear from us as soon as we have any announcements. And then of course, this week, I'm actually getting to go on a little vacation, which is always nice. You know, I've been putting in a lot of 10 or 12 hour days. And so, you know, I guess when I'm on vacation, we'll be putting in four to six hour days. So headed out to Aspen to see my mom and hang out there for a week. Going to be a lot of fun, really looking forward to it. I've actually never been to Aspen in the summer. So if you have any recommendations on things that I should do in Aspen places that we should see, you know, we're looking at whitewater rafting, of course hiking, y'all know I love to I absolutely love to hike. So any recommendations, they're more than welcome. Question of the day. If you're listening, if you're joining us live, I want to know, how do you plan to finance your next commercial real estate acquisition? Are you doing seller financing? Are you doing a joint venture? Are you doing a traditional loan? Are you using hard money? I want to know what's going on today. It's a very interesting market out there. And there's all sorts of different ways that you can go about financing a deal on here, you guys are doing. Charlie's saying hopefully seller financing. I agree, Charlie. That is That is definitely one of my favorite ways to do deals, especially in in a day like today. That's actually what we talked about Charlie's in the Siri accelerator. That's what we talked about on our group coaching call last night, we went all in on seller financing, how to pitch these deals to sellers how to structure them the right way. Because seller financing opportunities, especially in a market where banks are a little bit scared. And interest rates are as high as they are it you get to negotiate the debt term. So you can make deals work that otherwise just wouldn't work. Kyle cars also in Serie accelerator is saying I will finance my next deal by restructuring a current debt deal. And we're raising capital through an investor pool. I love that kind of let's talk about that some more, because I've got a bunch of investors that are itching to get in on a deal. So maybe we can partner and go out and find some deals together. It'd be a lot of fun. Jorge saying good morning, Tyler wishing you well, great question, I plan to use seller financing for my first deal. Here's the thing, seller financing allows it, whether it's your first deal, your 10th deal, whether you've got $1 or $100 million in the bank, it's the better way to get a deal done if a seller is willing to do it. So completely agree with that, Jorge, glad to glad to hear that you're planning on using that for your first deal. When you're when you're going through the seller financing process. I mean, right? You're you're negotiating for the deal. But imagine also getting to negotiate with the bank, typically, you don't really get to negotiate debt terms, right? Interest rate kind of is what it is, you might be able to push your amortization from 20 years to 25 years, you might be able to get a six to 12 month interest only period. But when it comes to seller financing, every single term is up for negotiation. So it just depends which lever Do you want to pull to make this deal happen? Viken is saying Hey, Tyler, what's going on? Vigan. Good to hear from you. Eddie. Hi, Tyler. Good morning. Good morning, Edie. We want to stabilize our current project and then either refinance if rates go down or get a HELOC on it and use that money to start the next project. I think that's a great idea. I think that's a great idea. One thing that I would I would recommend Eddie is dive into the interest rate difference between he locks and a refinance. There's pros and cons to each. What I am seeing right now is that he locks are just so much more expensive than a refinance. In terms of the interest rates you will be paying. Now again, there's pros and cons, right? Because on a refinance, you have to immediately refinance and start paying the new interest rate and on a HELOC. You don't have to pay the interest rate until you start drawing down on those funds. So pros and cons to each it's tough to kind of run the math and figure it out. But if you know 100%, you've got a deal to put the money into. I'd probably just go for a refinance. If you're out on the hunt. You don't really know which direction you're going to take yet. Probably a HELOC. Those would both be great options for you. Vicki and Tyler, do you own property in Orlando, Florida? No, I do not. I am not necessarily opposed to it. Though. These days we're typically recommending unless there's a reason as to why you just absolutely love Florida.

We're typically recommending to our clients. I'm recommending my students. Don't go to Florida, because insurance rates are killing a lot of deals right now. Florida is one of the big three that we typically sell real estate in, I have sold a lot of real estate in Florida, right? It's Tennessee, Texas, and Florida, because those are all income tax free states. The problem with Florida though, is that insurance rates are spiking so much because of all the coastal, you know, the damage from the storms on the coast. That it's it's tough to make some of these deals make sense. And just because your insurance rates go up, doesn't mean you can always pass that through to a tenant, right? Because I'll hear kickback sometimes of oh, well, I've got a triple net lease, the tenant has to pay that it's fine. Well, that may be true. And that may be the case. But at the end of the day, tenants still have a threshold of the absolute amount of rent that they can pay, right, that includes base rent, and includes additional rent, that includes their utilities, right that there's a there's a finite amount of what they can justify to pay. And if your insurance rates go up by 50%, which we have seen, in some cases, some cases, way more than that, unfortunately, then that really is dollar for dollar taking down what your tenant can pay to you and base rent. Right? So something to keep in mind as you're going through that process. But no, I love Orlando, I was down there not too long ago. It's a fun, fun area. Jorge saying I agree with you on flex space, almost everyone wants to get it done cheap, you can figure out how to get back the extra money you will put in if you get a phenomenal space and get phenomenal tenants. So true. Right? flex space is one of those mean industrial in general, is this asset class. And look, I've talked about that on this channel too. So I'm not going to sit here and pretend like my hands are completely clean, but that it's the most affordable the cheapest entry into commercial real estate. And it certainly can be because at the end of the day, it's basically a prefab metal building that you can put up. Right. But there are certainly benefits to going ahead finishing it out. I mean, you know, Marcus had polished concrete floors. You know, he had fully finished out restrooms, the office space, he had taller ceilings, he had a mezzanine that he had built in. And it's all stuff that you don't typically see in an as is delivery. But he went ahead and did it. And guess what he signed six leases, I think within two months. And those tenants had been there for about a year, they all renewed or they're all stag. They love it. They're, you know, he spent extra money on landscaping extra money on lighting the parking lot. And I mean, the good thing is, he's still getting a great return on the asset. That's like the fun part about it. You think about how much if you actually account for true vacancy, having a bad property or a property that's competing with every other property in town. That's the interesting thing about his site. It's so nice that it doesn't compete with any other flex space, which means he's kind of in his own blue ocean. Right? And you all know I love love blue oceans. So you get quality tenants to say he's always saying good morning, Tyler. Good morning says our I enjoyed your recent episode on cost segregation? What's your experience or familiarity with how much you can write off on an industrial outdoor storage facility? So that's a great question says I am a big fan of cost segregation. For those of you that have never heard of it. Go watch that episode with Yona Weiss and then call Yoda. I mean, it is a great way to save money on your taxes. And I mean, let's put it this way, I did a cost segregation study on a $480,000 building that I bought. And your one we were able to write off about $120,000 against our taxes $120,000 write off just for buying a building and your one. I think we paid two or three grand for the cost segue. So 100% It's worth it. Here's the thing, though, about industrial outdoor storage, you're not going to have a lot that you can write off. Because there aren't a lot of improvements to that property. Now, that doesn't mean that you're not going to have anything, but you're probably not going to have that 20% 25% write off like I would get on my office building. You're probably going to be looking, you know, closer to I mean, it's going to be better than if you didn't do a context study, but it's probably not going to be massive. The things that you'll be able to depreciate, you know, like electric gates, right, your lighting, probably your infrastructure underground, if you have any. That's something that I would certainly talk to a Cost Segregation expert about before moving forward on it if the tax piece is a big component as to why you're buying real estate. If you need the tax write offs. I mean, if you want to talk about like what is the number one property to buy, to get, you know, significant depreciation. car washes are massive because of all the equipment, right though Wash was actually a very good write off for us because we bought all of the restaurant equipment. So it just depends on how you you go to about structuring these deals. But typically, industrial outdoor storage since it's mostly just land, or, you know, paved parking lot, there's not really a lot that you can you can depreciate on them. Cameron is saying, I work as an analyst at a brokerage that specializes in retail, and I'm about a month out of getting my license. What advice would you give to getting listing starting out specifically for retail? Cameron? Great question, man. So what I would say is, get out there, and cold call and knock on every door that you can get your hands on. When you're first starting out, the only thing that matters is getting the reps in. Because here's here's the tough part about being a new commercial real estate broker. No one wants to do a deal with some new kid that's in their 20s. And that was tough for me to realize when I was going through it, but it's fair, right? Why would a professional commercial real estate investor do a deal with someone that's 21, which is you know how old I was when I first got started, when there are guys that are in their 30s and 40s, that have been doing it for 1015 years. And really, what I ended up doing was cold calling pretty much all day, just so that I could get used to talking to people, because that is one of the best skills that you can have. And you're perfecting your pitch. So go out knock on every door, don't get discouraged that it's not happening right off the bat. The average commercial real estate broker, it takes you about six to 12 months before you start closing deals, or really even picking some up. And about three years before you really start making money. After that, you have the experience, you have the track record, go all in on that. Now there's a couple of things that you could do to give yourself a little bit of an advantage. Join a retail team, if you can join a team with a couple of older guys, or one one older person that has a little bit of experience, you can borrow their track record, right. And what I mean is that they've done dozens, if not hundreds of retail deals throughout their career, you can say, hey, here's what we've done, here's why we would be great to represent your shopping center. And it makes it that much easier for that person to say okay, I'll sit down and talk with you guys about what you got going on. So biggest thing is just making the cold calls. You know, the thing that I did? Honestly, that worked really well. Nobody else really does this, send out mailers snail mail, send out direct letters to these property owners hand address the front of every envelope, you get like a 99% open rate. And I mean, I had, I have a client that we still we still manage and lease their property to this day. That called me six years ago, after having one of my letters for about 12 to 16 months. So I had sent them a letter, they got it, they opened it, read it, put it in the drawer, said I'm going to try and lease this out myself, didn't work out for them. And then they called me and we've been working with him for six years. So the return on that one letter is pretty wild. And again, you don't really have that much competition when it comes to that. So hope that helps Chairman Fred is saying I read about your micro restaurant project in Nashville. I'm interested in knowing what are the neighborhood attributes necessary to develop a successful micro restaurant project? Read? That's great question. So the wash worked because we had no parking requirements. That is the first thing that will kill this deal. And it is the reason as to why I haven't really been able to go out and do a second one. So not having to buy additional land for parking, made it so that we could hit the rents that we had to to make it work. If we had to have parking would have worked. We are on the edge of a neighborhood on a major thoroughfare with high visibility where it's very easy for people to walk and bike to the restaurant. But there's also street parking. So that really, really helped. So I think you want to be closer to the urban core. Not necessarily in the urban core though you could be I mean, we're urban core Jason, and a hip neighborhood where people care about supporting small businesses and restaurants. I think that's why it has performed so well. I mean, the neighborhood just really embraced it and made it its own which is really, really fun to see. Cameron is saying too many characters but wanted to say that I love the content and learning a lot. Awesome Cameron. I appreciate it. Glad to hear it. Stick around. There's a whole lot more to learn.

I think we're like over 500 videos now. So there's I mean, you could watch a video every day for the next you know, year and a half. Robin says saying good morning Tyler. Good morning Robinson. Do you recommend the broker mastermind for me I've only been a real estate agent for six months. That's a great question Robinson. So at the end of the day, I think it's good for anybody that is interested in getting started as a commercial real estate broker, because we're going to have all of the foundational training that you need. There's nothing like this out there. I mean, last I counted, we had 106 lessons in the course, which I know it's excessive, it's a lot. But at the end of the day, I want to shorten the learning curve from three years for you to understand what you're talking about to one year, right. And if I can do that, by packing this course full of all of the education, all the information that you need, then I'm going to do it. And so it's taking up a lot of my time, right now, to go through and pull all of that together. But I love it, it's so much fun to get to do. So it'll have all of that knowledge. But if you're intermediate, you've been in for three or five years, it's going to have the next step for you. If you've been in it for 10 years, and you just want the accountability, you want the community, you want to learn the best practices from everybody else. It's got something for you. So that's the that's the fun, fun part about it is that, you know, yes, you get to tap into the educational platform that we're building, you get to learn from me. And I've, you know, I've got 11 years of brokerage experience, but I think the cool thing, and honestly, probably the more impactful is that you're going to be surrounded by other commercial real estate brokers that will be willing to share what they are doing. Because when you've got brokers from New York and California, and Texas and Tennessee and Florida, Nebraska, you've got people that are willing to share their best practices, because it's not like we're getting together in Nashville, and saying, all right, how do we find properties in East Nashville, knowing that all of our competitors are sitting around the table. And that is something that I'm adamant about, and that I'm selecting people in the mastermind for, if you are going to come in here and you know, try and protect your trade secrets or something like that, this isn't the place for you, right? I mean, that's I've built this entire YouTube channel, my podcast, this brand, on sharing the information because I believe that we're all better because of it. That's exactly what I expect out of that mastermind. So absolutely, hell yeah. I think it'll help you kickstart your career and get this going way faster than you would be on your own Haseena saying good morning, Tyler here midnight in Taiwan. Awesome. Hey, so that's really cool. Plan to finance combine hard money with traditional bank is still learning seller financing strategy here, interest in Taiwan is about two and a half percent. He says that's insane. That is insane. Two and a half percent. Alright, who wants to go do some deals in Taiwan? We'll call hasten. That sounds awesome. So yeah, I mean, look, if you can get two and a half percent interest rates, I'd be doing deals all day at that rate. That's really cool. doster is saying good morning. All Good morning. doster. Let's see. John is saying good morning, Tyler. Good morning, John. What steps would you recommend to generate interest pre lease warehouse into our flex space early in the process, ie during due diligence design and or early construction. So John, this is kind of what I was talking about a little bit earlier with Marcus's flex space. So we went and toured down in Alabama, the thing that he did that worked so well for him, which is it's not like some new found marketing strategy. They just designed and built the most beautiful flex space possible. And they made sure that the parking lot was super well, when he even did concrete for the drive in the parking lot instead of asphalt because he knew that concrete would last longer and look better. Little details like that. If you can really show those off, spend 510 20 bucks a foot more, you'll probably lease them a lot faster. And that will certainly help. The other thing that I always recommend, get a great broker, get a great broker involved that knows where this community is how to talk to them that is willing to go out and knock on doors. You know, somebody like Cameron right? I mean, Cameron is just getting started in commercial real estate brokerage moving from an analyst. But Cameron's gonna be hungry, right? Like, that's what I love about Junior brokers, new commercial real estate brokers. Sure, maybe they don't have the Educational Foundation, they're still learning in that respect. But guess what, they will go out and knock on doors until the sun goes down. And that's something that you just can't get somebody that's got five or 10 years of experience in commercial real estate to do because they don't have to. Right. So when it comes to, you know, working with brokers, you know, I love finding a team where there's an older guy that's got the experience and a younger guy that's gonna go out and knock on those doors to make it happen. Because that's what it's gonna take. The other thing is to think about where your tenants are, right? Who is your ideal tenant, put together a profile, right? Sit down and come up with These are the 10 types of businesses that we want to have in the shopping center, figure out what their needs and wants are, and put together your Magnetic Messaging to go and attack them. Right. So I mean, let's say that your, let's say your target demographic is HVAC technicians, right? Well, you might call a bunch of HVAC technicians and do a little market study and say, Hey, what do you like and not like about your current space? Right? And they may, you may start to pick up on a pattern that, you know, the space is great, but it doesn't have enough parking. Right? Okay, well, cool. Well, hey, HVAC companies need new space that actually has the parking to accommodate your trucks, when you have team meetings? Come down and leave space for me. Right? It's things like that, where you can get very hyper specific in your marketing, that will, it's going to get rid of a lot of people, right. So I mean, it's niching down, you're, you kind of look at it. And it's kind of counterintuitive, because you're like, well, that's gonna get rid of a lot of people. But there's an HVAC, HVAC technician or company out there that will read that. They will say, they are talking to me, I'm gonna go check this out. So something to be said for them. Hasten assailing saying, Tyler, how do you recommend an Asian market? That's that's a great question. I don't know anything about Taiwan, or Asian real estate at all. If you have anything that you can share with us about what that market looks like, I would love to dive into it and learn more. I've always, you know, interested in learning about commercial real estate. So it'd be it'd be a lot of fun to learn about. Cesaro, saying I enjoy your content a lot, how to execute creative financing, sourcing, etc. But could you possibly make an episode on specific mathematical metrics to evaluate whether or not a deal is worth it? Absolutely says our I've got a bunch of videos on this channel on underwriting commercial real estate, evaluating deals, running numbers, I would have to go back and look and see if we have a playlist of all of those. But they are out there. We are definitely doing videos like that. So happy to happy to look into doing some more. I mean, hey, if that's what the people want, that's what the people get. So, absolutely. Cesar says, Thank you, for what you do, man absolutely says our Hey, that's what I'm here for. John, what's going on, man? Good talking to you yesterday, looking forward to catching up next week. He's saying what are some tips or advice you would have for renovating an old mansion into a wedding venue or event venue? Do you have any experience turning something into an event center? So that's a great question, John. So we're kind of in the process of that right now, with the salt ranch boutique hotel that I'm doing, what do we right down the street. Actually, as soon as I get off of here, and two minutes, I'm going over there to do a construction walkthrough. So what I would say is keep as much of the historic pieces of it as possible, because people just love that. If you can expose the ceilings or you know, bring back the original floors, people love it. If you can open up the walls a little bit more, that's always nice. The thing that I don't like about renovating older historic buildings into event venues is that you have to sprinkle them if you're going to have a capacity over a certain amount in Tennessee, and it may be in other states, that capacity is 100 people or more. So we didn't want to do something that's incredibly invasive to that building, which is put a giant set of sprinklers in there. So we opted for that, bypassing that and and capping our capacity at 99 people. So the other piece of advice that I would give you too, is find an architect or interior designer that has done this type of project before, because there is a lot that they will have to keep in mind as they are going through it that you don't want somebody to be learning on the job. Let's say it that way. So I love it. I mean, people love those types of venues, you can't recreate that character. I think you're thinking the right thing by doing that.

But going to saying in a first time investor, Tyler, can I go alone and a better economy than now if I understand what I'm doing? Vic can absolutely can. Yeah, I mean, what I would say is, you know, if you want to do your first deal alone, you've got the cash to do it, then absolutely go for it. If you don't have the cash to do it, then you're probably going to have to raise capital from investors. And at that point, what I would say is probably bring in a partner to help you do the deal. Because you know, it's one thing if you want to take on a deal, do it yourself, lose your own money. It's another thing if you're gonna go raise capital from other people. And you really want to have the experience you want to have any sort of insurance that will make sure that you get the project done right. So that is all the time that we have for today for this round of office. ours. Join us next Tuesday live at 8:30am. Central Standard Time. Don't forget to check out the brokers mastermind. That's at brokers mastermind.com. If you're interested in joining that, if I didn't get around to answering your question, I'm so sorry. I know we've got a ton of questions in there right now. Please leave it as a permanent comment on this YouTube video. I'll get around to it. And we'll see you guys 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.cre central.com To learn more