Working ON not IN Your CRE Business 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:
Focus on value-add projects rather than new construction - Why I prefer value-add deals as they often provide similar returns with less risk and debt compared to ground-up development.
Importance of setting SMART goals - The value of setting Specific, Measurable, Achievable, Relevant, and Time-bound goals to increase the likelihood of achieving them.
Surround yourself with the right people - I credit much of my success to being in the right rooms and networking with the right individuals who helped guide and support my growth.
Challenges with the "Wash" project - Parking constraints have been a major issue in replicating this unique commercial real estate concept in other locations.
Advice for new commercial real estate brokers - Read "Walkable City" by Jeff Speck to gain a deeper understanding of urbanism and city planning.
Importance of proactively raising capital - Create a list of 100 potential investors and consistently promoting investment opportunities to successfully raise capital.
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:
Tyler Cauble 0:00
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. Welcome back to the commercial real estate investor podcast live from the Cauble group Studios here in Nashville, Tennessee, as always, it's not a good move the studio. We are back with another round of office hours every Tuesday, 8:30am Central Standard Time. I'm going live and answering your questions, whatever you've got. I have people reaching out all the time on Instagram, LinkedIn, whatever. And I always say, Look, if you want me to give you advice on your project, if you want me to dive in and answer these questions specifically for you happy to do it, jump in on the office hours, and we will cover everything. Question of the day, what's the best investment you've ever made in yourself? I want to know. For me, I think back, it's kind of a long way of doing this because of Cutco. I then joined a mastermind that a Cutco, like a very successful Cutco rep, had started because of that mastermind I met. There was a member in there who had his own mastermind joined that. And so that was best driver blueprint to go abundance. And then in gobundance, I met several guys that taught me how to syndicate Commercial Real Estate Investments. And because of that, now that was back in, you know, 2017 2018 started syndicating deals in 2019 and the rest is history. So I think that was a pretty good investment in myself. Honestly, it comes down to one, yeah, of course, the knowledge right, learning how to go about doing things the right way, but also just being in the right rooms, meeting the right people that really helped me get there, and we're there to, you know, be, be a sounding board, as I needed it. So I want to know what's, what's the best investment you've ever made in yourself? What like, if you look back on it, what was that pivotal moment where you're like, man, that really changed everything. Before we dive into those questions, gonna catch you up on what we've been going what we've been getting into this past week. So I spoke to the Cherokee Office of Economic Development. They were in town from from North Georgia and touring Nashville and looking at just how Nashville has has been able to to grow what what their economic development committee has done, what the city has done what the Chamber of Commerce has done to help promote all sorts of urban growth and things like that, business growth within within the area. And I was honored to be up there speaking alongside AJ capital and Market Street Partners. If you're not familiar with either of them, because you're you would have to be basically from outside of Nashville to not know who they are, but AJ capital is basically developing all of Wedgewood, Houston, and Market Street Partners is responsible for having started the Gulch here in Nashville. And we were talking about finding and investing in underutilized parts of town, right? So, I was talking largely about Dickerson pike. They were talking about Woodward Houston and the Gulch respectively. And how, you know, cities can work together with investors, with developers, to make these parts of town that are largely undesirable, or there's just not much going on, make them more desirable, you know, promote business growth, promote development. It was, it was a really fun conversation. Loved getting to spend some time with them. Had our first ever in person, Siri accelerator event Friday and Saturday. That was amazing. Grateful for every single one of you all that came out. We had 39 people show up, which is almost half of our total student base, which is really cool to see that many people coming. It was, it was a lot. It was my first ever event thrown like that. Shout out to my team, Brittany, Ally Heather, everybody that helped really pull that one together, because it was a lot. And it was, it was great. I couldn't have hoped for a better weekend. To be honest with you, we kicked it off with with a with networking over cocktails on on Thursday night, I taught a class for about four hours on Friday morning on finding and funding your first commercial real estate deal. We were super in depth on that. Then we loaded up on the bus. Everybody. Grabbed the lunch at the wash, and then we took a tour of, I think, five different properties, either investments or developments that I've done, and I walked everybody through the, basically the story of the deal right. Here's how we found it, here's how I pulled the money together, here's what we did to it, here's where it is today. And it was, it was really fun. We went back to a property that I haven't been back to since I sold, which was the first project I ever raised capital for, which was a little 6000 square foot office building here in town. So it was cool to take everybody over there, because the owner of the building today is the tenant that occupies it. I was very intentional. When we exited that property, I called the tenant, I said, Hey, you should be able to control your destiny here. Here's how much you're paying in rent. Here's how much your mortgage would be if you guys bought this. And they agreed and they they bought the building. So it was pretty cool to go back and see that. Then we capped the day off with some really intense go karting, which I know sounds goofy, but these are, like, the fastest go karts I've ever been in done at k1 in any snashville, over off of Davidson Street. And that was a lot of fun. They also had this, like, virtual reality arcade. So a few of the guys and I jumped in, and they have, like, the things that strap around your waist and you can run around in them. So we did that and played zombies. It was a lot of fun. Saturday morning, we walked through goal setting and goals for 2025 I walked everybody through how I set my goals and how they can set their goals based off of that. Give everybody an example goal set, and really challenged everyone to have their goals pulled together,
Tyler Cauble 6:34
really within the next 30 days so that we can get to work for 2025 and I set SMART goals, so Specific, Measurable, Achievable, Relevant and time bound. And that is the the method that I recommend anybody use if you want to set goals is to go make them smart goals, because when you write them out in that manner, it really like you're 10 times more likely to achieve them. So go do that. Then we heard from Matt Charette, a good buddy of mine. He's in my Entrepreneurs Organization forum, my EO forum here in Nashville. He exited several restaurants very successfully and kept the commercial real estate that they occupied, and he came in and he's a teacher now at the Entrepreneur Center for the EO catalyst program. So he teaches small businesses how to put their the right business model together. And that's one thing that I don't see a lot of people talk about when it comes to commercial real estate investing and building a portfolio, you've got to treat this like a business. So he put together a presentation on treating your investment portfolio like a business, and walked through everything that an investor should be keeping in mind if they want to grow and scale this properly, because if you don't lay the right foundation of it as a business, you're just going to scale your problems as you scale up right we want to scale the upsides, not the downsides. So that was a lot of fun. Last night. I got to go to the next awards put on by the Entrepreneurship Center here in town and and see my mentor, Michael burcha, get get inducted into the entrepreneurs Hall of Fame. That was really special. It was a lot of fun when it and I got all dressed up. It was, it was black tie, or Nashville black tie, which basically means just, please look nice. So we got all dressed up and had a great time. It was wonderful getting to celebrate him. And then this week, what's really on the docket? Jamal and I are working through finalizing our self storage programming at peerless mill. So we got our approvals last week, a couple weeks ago, and now we're in the throes of selecting a self storage management company that's going to help us move this forward, and what all that's going to look like. They've already done all the market studies on it. That's one thing that I highly recommend that you do if you're getting into self storage, is talk to self storage management companies, because they can help you put together pro formas. They can help you put together your occupancy lease up rates, all of that fun stuff, so you don't necessarily have to do it, and they will manage it for you. It's it's pretty great, awesome. Let's dive on into your questions again. Question of the day, what is the best investment you've ever made in yourself? I would like to know is it, was it going to college? Is it a course you took? Is it a book you read? I'm curious to hear what your thoughts are. John is saying, Tyler, hope all is well, looking for a career change in a commercial real estate but need a salary. Do you recommend working for a developer? Yeah. I mean, John, I think working for a developer is great if you want to get into the commercial real estate industry. What I would have to know, though, is, what's your long term goal, right? What's your vision for your career? You know, where do you want to take your life? Because, you know, if you were telling me you just want to get into into passive triple net investments, then you know, hey, maybe, maybe working for a developer isn't actually the best path to take. But if you were going to say, you know, look, I want to be developing my own properties, absolutely go. Go work for a developer. Get a salary, be a project manager, something. To that extent, or an analyst, right and and learn how to put these deals together from the inside out. That's how I got my start in commercial real estate development. I worked for a boutique development firm, and for a couple years, got to sit in on every single weekly development meeting. And so because of that, I saw how these deals were put together, put together my first project, not even three years into the business, which is 42 townhomes. And I could not have done that if I hadn't been working for a developer, right? Because traditionally, commercial real estate brokers, which is where I started my career off, are working in a brokerage office with other brokers. They don't get to see the day to day of being a commercial real estate developer. And so that was, that was all. It was, right? It's proximity, right? Go surround yourself with with the people that are doing what you want to do. Hope that helps. John. Joe is saying, What's your buy box with vacant land? Good question, and let's talk about that actually, because this weekend, that was one of the biggest points I tried to make in hammer home with the Siri accelerator members, as they were putting together, their goals is to put together their Buy Box first, and your buy box needs to be specific, and it needs to really excite you, and it's got to be easily conveyable To whomever you are you're sending it to, right? So with that being said, you know, back in the day, I would have said, I'll take a look at any piece of land. Joe, right now, land is not in my Buy Box. I'm not interested at taking taking a look in any land at the moment, unless it's such a screaming deal, I'd be an idiot to pass on it. Reason being, I've got plenty of active deals that have, that are income producing, that are serving me in other ways. Whereas a land land deal, you know, I'd be doing it either to develop something which is three to five years down the road, and I'm just not interested in projects like that at the moment, or I would have to, you know, flip it, and the lending on it is not nearly as aggressive as it used to be, so it's tougher to get the financing together for that, and right now, I'm all about what's the easiest thing to do. I don't need to run my head through walls in order to make a deal happen. So that being said, the long winded answer is, land is not in my buy box at the moment. That's not to say that it won't change, right? I mean, I'm selling a piece of land, a couple pieces of land that I own right now, so they've been great investments. It's just not something I'm looking for at the moment, Derek is saying, Good morning all. Good morning. Derek, good to see you. Man, Floyd, what's up? Tyler. Floyd, what's going on? Man, good to Good to see you in here, dude, hope you're doing well, let's, let's catch up. Soon, would love to we need to get the bikes out, man, before, before it starts getting too cold, I still, I need to get mine out. Go ride it. It's been, it's been beautiful the past couple weeks here. Dan is saying, Good morning, Tyler. I'm a beginning developer in Houston. Was wondering if you could shed some light on what accounting software you use to run your business's accounting and development projects. Great question. Dan, so when it comes to like, softwares that we use at the development firm, I mean, I've got a full accounting team outsourced, so they handle all that for me, that's really it, you know, we don't, I mean, we use, like project management software, stuff like that. I mean, it's really just notion or keeping track of things, right? As a developer, I lean more on my GC and my architect to handle those things, because I want to run a lean operation. Can you hire people on your staff to do those, those aspects for you? Of course, absolutely. But then you've really got to start doing multiple, multiple deals at a time to justify having their salary, whereas I can, I can outsource that at a relatively inexpensive price and not worry about it, not take on the liability, and I can bake it into my pro forma. So that's, that's kind of how I've done it. On the, on the, on the accounting side, we use QuickBooks, super easy to utilize. And I know that there are some really big companies that that's, that's all they used to. QuickBooks, pretty easy. Shannon. Hey, what's going on, Shannon, good, good. Seeing you this weekend. Thanks for coming out to Nashville. She's saying, I'm living it right now, changing careers, Sierra accelerator, getting out of my comfort zone. Those are the best investments she has made in herself. Congratulations, Shannon. Shannon was, was a nurse, and now she's dived all in on becoming a commercial real estate broker and investor. So excited to have you in the group, Shannon, and good to see you here this morning, Ryan is saying maybe a dumb question. I'm gonna be honest with you, no dumb questions, just dumb people. But I'm curious, can you make money right up front, right when the deal is closed, absolutely, man. I mean, I've done that before. Depends on how you want to structure it, right? So I had a, had a student, Ross, out of California, he bought a deal that was three and a half million dollars, and it appraised for four and a half million. So, I mean, he could have, he could have sold it and made a million bucks, right? Yeah. I've also done a deal where as soon as I closed on it, I turned around and sold additional shares to other investors so that I could actually cash out a portion of it, which was kind of nice. There's several reasons to do that. One, they didn't have to be on the debt. Two, I mean, you still have to disclose it to your bank, right? But because we structured it a different way, the bank didn't need them on the note, and then I get to actually cash that out instead of that cash going into the deal, because I had created so much equity by finding a phenomenal deal. So there's a couple ways to do it, but typically, you know, the only way to really pull money out that you've made, quote, unquote on the front end, is by selling the property and taking pulling out that equity that you've created.
Tyler Cauble 15:44
Rusty is saying being at the right firm has been my best investment. After hopping around a few couldn't agree more. I mean, that that comes back to just surrounding yourself with the right people, right? I mean, when I was when I was at the peak of my sales career, I was surrounded by people that were pushing me further and further every day in a good way, right? I mean, I had a sales manager that was, you know, I was calling after every single appointment that I had, after every single closing, whatever it was, and you know, he would always keep me on track, right? Because, like, sales can be emotional, right? You get, you know, the door slammed in your face a lot. You get told no, and then you have these, like, super big wins, and you know, it's just this emotional roller coaster. And so he was phenomenal at just keeping me steady and and we crushed it because of that. And it was fun having kind of an inner office competition with everybody else in a healthy way, because we knew we weren't competing with each other, with each other for business. We were just competing with each other for deliverables, and it was, it was a lot of fun, so being surrounded by the right team absolutely pushed me to do significantly more than I was doing on my own, which is great. Jared is saying Question of the day, used downtime during COVID to soak up all the commercial real estate content I could still w2 but double net worth doubled net worth in the last couple years, and have more projects in the pipeline. Congrats, Jared, that's awesome, man, COVID. Look, I know COVID was, it was a terrible time for a lot of people, for me, I mean, look, I didn't know if I was going to have a job the next day, right? I mean, it was, it was kind of scary. Fortunately, I'd saved up a little bit of cash, because we had every single deal that I had, pretty much like in April of 2020, dropped. Nobody was moving forward on anything, and so I used COVID. I mean, I probably worked 12 to 15 hours a day, no kidding, because I didn't have anything else to do, right? Like, I didn't want to go hang out with any out with anybody. My friends weren't hanging out with anybody. They were all just staying home. And, you know, most of my friends were playing video games and messing around, and I was just working for 12 to 15 hours a day. You know, whether that was cold outreach, sales calls or studying YouTube, studying blog posts, studying marketing and all of these other things that I had never really had time to focus on because I was so busy working in my business. COVID actually gave me the opportunity to step back and work on my business, which is how you actually get the business to grow. You can't get and this goes for being a real estate investor as well. If you want your portfolio to scale, you can't be the manager, you can't be the leasing agent. You have to be able to pull yourself out of working in the business and go be the CEO of your real estate portfolio. Go work on the business, come up with the vision, hire the right people. That's what it allowed me to do, and it sounds like it pretty much allowed you to do the same thing, right? You stepped back. Jared, you focused on learning everything you could. I mean, congrats on doubling your net worth in the last couple years. That's amazing. Mo, is saying Good morning, sir. I like the multiple O's Good morning. Mo, new to commercial real estate, focusing on warehouse and logistics space. Any advice, please? Mo, my advice is, one, you've chosen a great space, right? I love, I love industrial real estate. Two, if you are absolutely new to commercial real estate, whether you're an investor or a broker, I can't really tell just because you said new to commercial real estate, if you're a broker, go join a badass industrial brokerage team that is kicking ass and taking names, closing the deals left and right. They've got every listing, and tell them, You know what, you want to join the team, and you'll do whatever it takes, right? Because just being in proximity again, you know, yeah, you're going to be a grunt for a year or two years. But guess what? Year three is when I really started making money as a broker, and that will that will shorten your learning curve significantly, if you're an investor. Then I say, start looking at deals, figure out how to underwrite everything. Go and go and meet your attorney, meet your brokers, meet all the brokers in the market, and start telling every single person out there that you want to look at deals and you want to find a good deal. Think that'll help you. Joe is saying, so are you focusing on value add as opposed to new construction? So Joe. Was asking earlier about my Buy Box for land. Yes, yeah, Joe. I mean, I would say the majority of my projects, probably over 75% have always been heavy value add, maybe even more than that. Ground up construction is is great. You can create a lot of value. It takes a long time. There's a lot of risk. And what I have found, and this is just me personally, I don't think this necessarily goes out for every single investor out there. I'm actually able to make just as much money out of a value add project as I could on a development project, and I don't have to take on as much debt, which means I don't have to take on as much risk, which means I don't have to raise as much capital from investors. So I'm much more strategic. Back in the day, I got distracted by the sexy like, Oh, look at how many doors this person has, or look at how big this development project has, or is that this person's doing. And I thought that was really cool, right? I was like, oh, I want to do bigger and bigger and bigger. And then I did a couple of bigger projects, and I realized, like, man, all I really did was make sure that I couldn't sleep at night. All I did was make sure that I was taking on even more risk and more debt, and at the end of the day, I made a marginal difference in the amount of income. So it's like, Man, I'm going to get smarter about this. You should read the book Profit First, because to me, I'm here to make money and build up the passive income, you know, and do cool projects. Of course, I want to do cool projects, but I used to have this vision of, like, I want to create the coolest tower on the Nashville skyline. And now I'm like, yeah, that'd be cool, if that serves me at that time, but I'm not going to take on an insane amount of risk just to go prove a point. I want to I want to make sure that I'm living the lifestyle, right? Because I tell my students this, there's no point in building up a badass commercial real estate investment portfolio. If now you have to work 120 hours a week on it doesn't matter that defeats the purpose. You're buying yourself another job that has more risk than your job did, right? We want the time freedom that comes with that, to be able to choose how we spend our time, and so that's probably why I'm not really focused necessarily on ground up developments at the moment. I can just I can get more juice for the squeeze in other types of investments at the moment. Andre sing any advice to land an internship at a boutique shop. Thank you for your time, Andre absolutely happy to help as far as landing an internship at a boutique shop, man, I would go out there. You got to think about what's going through a brokerage firm's head when an intern reaches out. And the biggest thing is, I know it's going to take me a lot of my own time to onboard this person because they don't have any experience, right? So if you can go out there and learn so much about commercial real estate, that when you reach out to them and you say, Look, you don't have to educate me on all of this terminology. You don't have to educate me on the leasing process. You don't have to educate me on negotiations. I understand all of this, right? Because, you know, I watched all of Tyler's YouTube videos. I listened to all of his podcasts, right? I read his book. There's plenty of other books, there's plenty of other YouTube channels, there's plenty of other podcasts, there's plenty of, you know, weekend seminars and classes and stuff that you can take go immerse yourself in it, and then when you reach out to them, be persistent, send them an email, shoot them a call, send them an Instagram, DM, be annoying, right? Because that's what they want to see. They want to know that you're committed to making it happen, because that's exactly what it takes to be a commercial real estate broker. If you reach out to somebody one time and they never respond. You are going to be broke for the rest of your life, but if you reach out to them seven times, chances are pretty good they're going to respond, right? They just have to get used to seeing your name. So that's that's how I would approach. It is, man, pretend you're trying to that they're a tenant and you're trying to broker a deal for them. Go all in on finding them. Hope that helps. Andre Big Nick saying, which list should I go after to find off market multifamily deals? I'm not sure. Big Nick, unfortunately, I don't do any multifamily, so wouldn't really be able to help you there. Good luck, though. Mo is saying we already got that one. That's weird. Came in again. Tyler is drop it in. Thanks for giving us your time. Tyler, happy to do it. Man, thanks for being here. Tyler. Have you looked at any deals similar to the wash that use old storage containers? If so, any idea on what to expect the cost per square foot to be six bays. Do you have a Performa available to help us build a complex similar to the wash? Land is currently vacant lot, 55 by 155. So Tyler, the pro forma that I use is just the commercial underwriting pro forma that I've got available on my website. I mean, I think it's like 197 bucks. I designed that over a couple of years, so, like, we honed it in on that one. It's not a true development pro forma. Yeah, but we didn't need one, right? We just wanted to show kind of what it would look like once it was up and running and stabilized. Now, I mean, that's that's probably a privileged spot to be coming from, because we have been doing these developments for a while, so bank didn't need to see a full development underwriting from us. So, you know, take that with a grain of
Tyler Cauble 25:19
salt. As far as doing self storage or doing like storage containers, I'm not a fan. I'm really not a fan of doing anything out of storage containers. I know that that's such an interesting concept, and it seems like it should work, and it never does. Here's the problem storage containers are, they are structural. So if you do any penetrations into the wall, you cut out a window, you cut out a door, you've now compromised the structural integrity of that entire container, so now you have to go back in and reinforce it, which means you might as well have just started with storage container skin, right? Like, just cut them up and put them onto, you know, a wood frame. Or, you know, whatever you need to do. I'll say it cost us probably about $1,000 a foot to do the wash, right? That's a roundabout number. I think it was probably a little bit less than that. But that's about where it came in at to do all the site work, to build everything out, to do all the kitchen equipment that we did. It's not cheap. It's not cheap. The biggest problem that we've encountered doing the wash a second time. And I am actually working on a second wash right now out in Chattanooga, out of Rossville at peerless. And the biggest problem is the parking so we only have three parking spaces, like and one handicap. We have zero parking requirements. We just decided to do that, to go above and beyond what was required of us, but we wanted to make sure that there was space for it to go in delivery vehicles to just park and go. That's the biggest constraint, right? It's like, I mean, it's basically two things. And I was telling my the Siri accelerator members this weekend when we were touring the wash, it was like, there's really two constraints, either the site is big enough to where we can park it, but then it's too expensive to make it financially viable. Financially viable, or the site is small enough and financially viable, but there's parking requirements, and we can't meet them. That's always the biggest issue when it comes to redoing that. So that probably doesn't give you the answer that you were hoping for, but I'll be honest with you guys, we didn't do the wash to retire off of that, it was only like a $2 million project. We really did that to prove a point, push a concept forward. Hell yeah, it makes money, but it's not as profitable as some of the other deals I've done. It's just the coolest, you know, let's see. Clayton is saying good morning, Tyler. I'm currently in college pursuing a finance degree, but I was wondering if it would be smarter to just take CCM courses and get my license. Who would you rather hire? Clayton? Can you do both? If you do both, I mean, here's the thing, like CC im classes compared to, you know, what your college degree is. I mean, look, people spend 20, 3050, grand a year, some, you know, a year to go to college, and then they look at CCM, and they're like, oh, I don't want to spend two grand. Or they, you know, they look at some of my stuff, they're like, oh, I don't want to spend that much money. Mike, Yeah, but you're $200,000 in debt on, you know, a life sciences degree, and you're not going to be using that at all right, invest in yourself if you can do both. Man, I would highly recommend it, because a finance degree will actually help you, like that is worth going to college for in this business, and CCIM will help move you forward, specifically in the brokerage side of things, right? Like finance is going to be general finance, but CCIM will help you apply what you're learning in your finance degree to the brokerage world. So I think, I think, do both. Man, if you can do both, go for it. I think that's a great, great path. Jake, what's going on? Man, good. Talking to you yesterday, Jake is saying, What is the easiest thing to do right now, given that it's obviously not vacant land development in this market? Oh, man, easiest thing to do right now, honestly, is, is probably anything that has to do with, with industrial like flex space. I mean, it's tough to say, like blanket chat. This is the easiest thing to do, because it depends on the market. It depends on how much capital you have. It depends. There's so many variable factors that go into that they're like, I don't want to give you an answer because I don't think it would be the right one. But what I would say is industrial as a whole is pretty interesting to me across the country, because there's high demand in just about every market. A lot of the industrials has been torn down and is probably continuing to be torn down, and there's just not that much supply in the market. So like man, even, even if you're not a very sophisticated real estate investor, you'll probably be able to figure out industrial right, as long as you you know, follow the steps again. Commercial real estate is not easy, but it is simple. Just follow the steps. I hope that helps. Jake luxury is saying good morning. Tyler new to cre focusing on QSR and fast food. Any advice would be greatly appreciated. One. Luxury, I would go all in on learning everything about QSR and fast food, go to all of the conventions, meet every single broker that does any of those deals, study every single comp that you can find in that market. They tend to go for about the same price no matter what kind of QSR or fast food restaurant it is, both on the leasing and the sales side. Now cap rates is where you start to change things, right? And I would just start studying, like, what? What do these investments look like? I think, I think that'll really help you. Oh, gosh, you guys, we have, we're only like halfway through the questions. All right, let me look at, let me look at the time, so it looks like Jamal and I have our peerless call in 10 minutes. I'll give you guys another 10. All right, let's do this. Let's see. Because usually we call these at 9am but I There's way too many questions. We gotta get through some of these. Robert, what's going on? Man, good to see you. Dude, he's saying good morning. Tyler had a few offers out on one of which was close to closing, but I couldn't find a capital partner. Can you give us some insight on what I could have done differently? Yeah. Robert, so, so one thing that newer investors do when they're when they're first getting into the into the industry, is that they don't have a a focused attack strategy on how to go about raising the capital, right? So this, this advice goes out to anybody that might be raising money for a deal, sit down and put together a list of 100 people. Everybody has 100 people. I did this when I first got into sales, and it helped me. I broke the fast start record in 10 days because I sat down and put the right list together by like 50% of what the previous sales record was, which was pretty cool. Put together a list of 100 people with all of their phone numbers on it, and how much money you think that they could invest just by knowing who they are, I wouldn't go below $10,000 right? So if you've got friends that you think could throw $10,000 into a deal, put them on there, and I would go and call every single one of them and call them until they answer and have a conversation with them. Here's what I'm looking to do. I'm raising capital for these deals. I would love to have you in it. How much you think that you would be able to invest if I found a deal that fit these parameters right? 8% cash on cash, 12% cash on cash, 20% error. Whatever your parameters are, right now you've got a list of 100 people that you'll be able to sit down and call that you've already had a conversation. With on the next one and say, hey, look, we talked last month about finding this deal. I found one. You ready to put your 25 grand to work? There you go. So, Robert, hope that helps. Man, you know, raising capital is one of those things that, like, you know, a lot of people, and I don't understand why, a lot of people say, Oh, if you find the right deal, the money will come. That's not true. That's not true at all. I don't know why people think that just because you have like here, here's the way that I like to here's the way that I like to compare this, the greatest guitarist to ever pick up the guitar will never be known because he played by himself in his room. Same with with some of these deals, if people don't know that you've got the deal, it's impossible for them to give you money. So always be promoting. You know, always it's like, always be closing. Always be promoting. Make sure everybody and their grandmother knows that you raise capital for Commercial Real Estate Investments and that you want their business. I think that's the best way to go about. It takes time to build. Takes time to build. I'm not gonna lie, but it is absolutely worth it, right? And the other thing is to start with a realistic race, right? You know, if, if you feel like you can only raise $200,000 go find a deal that only requires $200,000 worth of equity, right? You know, I've got, I've seen people start off with, like, wanting to raise $5 million right off the bat. I'm like, Dude, I've only raised more than that one time, and I'm gonna tell you as much as I've done. That was the hardest thing I've ever done. So you might wanna start somewhere else, not to be discouraging. I just want people to be realistic. Cameron saying, what are some books you recommend for a new commercial real estate broker? There's only one book that I recommend. And that is walkable city by Jeff spec has nothing to do with commercial real estate brokerage, but it will help you understand urbanism and city planning on a different level, and I think that's what could help take you as a commercial real estate broker to the next level. And Jeff speck is brilliant. I've got both of his books. There's walkable city, walkable city rules. I don't know if he has anything else, but those two are like my Bibles when it comes to commercial real estate in general. So what those
Tyler Cauble 34:33
t, N, O T, quiet, sorry, I have no idea how to pronounce that. Are comps, the best way to speculate exit cap rate when evaluating a flex development deal, what are other major variables that I need to research at impact? Cap rate? Yeah, absolutely. I mean, look, cap rates are done on a comp basis, just like any other type of investment. So if there's an identical building down the street with identical tenants that sold for a 5.25 5% cap rate. Yours is probably going to sell for a 5.25% cap rate. Now that's when, like, where things will start to change is, you know, do they have better credit tenants? They have worse credit tenants? Is it one tenant in your building and they have three, you know, things like that, you've got to look at. But, I mean, if you're finding comparable properties, that's, that's where you'll be able to find the exit cap rates you should estimate. Here's the other thing, though, I never estimate market cap rates for my exit. I think it's a silly thing to do, because if you had estimated a market cap rate exit in 2021 for 2023 or 2022 you'd be in a lot of trouble, a lot of trouble, because you probably would have based your entire pro forma on that cap rate being super low, so you get a lot of value, and you wouldn't have cash flowed, and it would be a big, big problem. So be conservative. Charlie, what's going on? Man, he's saying storage containers are a great idea, but it's not a cost savings at all with all the extra work you have to put into it, yeah, honestly, if nothing else, it's gonna cost you more. I have seen that happen. I've seen some deals run into a lot of trouble because this was a few years ago, because they thought self storage facility or not. So I keep saying self storage because they thought storage containers were cool. Mo, new broker here. Do you have any vacancy in your team? Can I join? Have 15 plus years trucking experience? Maybe hit two birds with one stone. Mo, I appreciate it, man, we're not currently hiring on the brokerage team. We just brought on a new broker within the last 30 days, so it's probably going to be another six months before I really start thinking about bringing anybody else on. But keep us in mind, man, you know, once you get some a little bit of experience, we want to relocate to Nashville, or maybe you're already in Nashville. Let's so let's have a conversation. Joe is saying, I think underwriting is the most important part of commercial real estate, but there's not a lot of education out there for it. For example, underwriting a car wash or outdoor storage, etc. Yeah. I mean, Joe, honestly, that's that's like, a lot of what we cover in our group, coaching calls of the accelerator, because underwriting is one of those things where it's like, it's kind of tough to have a course on underwriting out there, because every deal is different. I mean, if there was a course, like, a good course on underwriting, the ones that I've seen kind of just show you how to use a spreadsheet. Like, that's good. You need to know that, but that's not going to walk you through, like, some of the intangibles of underwriting, honestly, that just comes from experience. Like, if I was going to put together a good course on underwriting, it would just be me finding an underwriting 30 different deals, and you'd have to go through and watch the underwriting of every single one of those, because every single one is going to be different. There's going to be some times where you're hard coding stuff into the spreadsheet. Things just change, right? I mean, that's that's all. That's the only way that I could think through of how to learn to underwrite, because that's that's basically how I learned underwrite. I went out and I underwrote a deal a day for 30 days with my mentor, and at the end of it, I was pretty good at underwriting. That's kind of the only way to do it. Unfortunately, Mo is saying focus on commercial real estate while getting a lot of freight from those same clients. What do you think running a logistics operation now with about 30 semis? I mean, it depends, man, you know, I would say what's what's your goal? If your goal is commercial real estate, go all in. You can't like this business. This industry is not a toe in the water industry. You're either all in or you're all out. It's not really worth putting your time into unless you're going to it. So whatever you're going to commit to and be consistent about, that's what I recommend. Oh, man, we got like, 80 seconds grant. Is the next president already impacting you and your associates, investing strategies for the next 12 to 24 months? Or is it too early to say grant? No, it doesn't matter. I mean, it matters to me who the next president is. I won't get political on this at all, but no, as far as our investment strategies go, No, it doesn't matter either way, we're still moving forward with what we know best. See twins is saying in a lucrative transaction, currently needing a partner buyout, would love to jump on a call and discuss further. Please let me know if you have availability. Yeah, absolutely. If you guys want to jump on a consulting call with me, you're more than welcome to. It's calendly.com/tyler, Cauble slash three zero m i n all one word. So 30 men, 30 minute call, coaching call. It's like 500 bucks. I mean, I'm gonna be honest with you, I charge a while for my time. I have to, so it's about $1,000 an hour. Happy to dive into anything with you, but that's why I do the office hours. Live that way you can jump in and you can ask whatever questions you got for free. Appreciate you guys. Love you all. We'll see in the next one. Tuesdays, 8:30am Central Standard Time. 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 throw. Five 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!