Creating Consistent Cashflow with Retail Real Estate

Most people in the real estate investing world tend to gravitate toward a specialty … a market about which they know ALL the ins and outs.

On our latest show, we’ll talk to someone who has made a particular market his bread and butter … the retail market.

Wait … isn’t retail dead? No!

In this episode we’ll talk with a 30-year veteran of the retail investment industry about WHY the retail market is still completely viable … and HOW you can get started in the wide world of retail.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your seasoned host, Robert Helms
  • His senior co-host, Russell Gray
  • Retail investor and developer Michael Flight

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Why retail?

Michael Flight has been involved in shopping center development since 1986. His business, Concordia Realty has been adding value to shopping centers since 1990.

In his 30-year career, Michael has seen the retail industry change a lot. Change is one constant in the industry, he says.

Several decades ago, the Sears catalogue made a big splash and replaced the business of many local merchants. Today, Sears is going downhill quickly … due to the popularity of online shopping sites like Amazon.

But smart investors have found ways to make brick-and-mortar retail thrive.

Retail facilities have evolved from single-purpose buildings to multi-function facilities (think shopping malls with restaurants, entertainment, and a wide variety of stores).

Businesses like Amazon need space to store and fill orders … another place where real estate folks come in.

Michael calls his specialty “de-mall-ing” … that is, taking a struggling mall and changing out the tenants and revitalizing the complex for modern shoppers.

We’ll explore the nitty gritty of how to get into the retail market, but first, a few great reasons investors should consider retail as part of their investment strategy:

  • One of America’s favorite pastimes is shopping … in person. Although online shopping is increasing in popularity, it’s still only 10 percent of the retail market. And customers flock to big-box stores for necessities like clothes and shoes that are harder to buy online.
  • Investors don’t have to deal with two of the major problems of apartment investing … vacancy and turnover. Tenants typically sign long-term leases ranging from 5 to 40 years to very stable tenants. Michael says many tenants will be national brands who offer lots of equity and will advertise FOR you.
  • Low day-to-day involvement … tenants are responsible for their own maintenance and sometimes even build their own stores. With a triple-net lease, tenants are responsible for real estate taxes, insurance (both property and liability, plus the contents of their store), and maintenance, including common-area maintenance like plowing snow and maintaining lighting.

How does the retail market work?

What does it take to purchase a small shopping center? Michael says potential investors must answer a few questions first …

  • What’s the neighborhood like? Is the property located in a good location?
  • Is there an adequate local population to support retail stores?
  • Is there a good travel path? That is, is the center accessible to cars and located near homes and other businesses?

Once you’ve made sure those criteria are satisfied, you have to look at what kind of tenants are already there … and what kind of tenants you need.

Shopping centers should have an anchor tenant … a grocery store or drug store or other big brand that will draw customers to the shopping complex.

When you’re negotiating, anchor tenants often have a lot of power to negotiate terms. But if you have a really great location, that gives YOU more leverage.

And you have to make sure customers are going to come.

The threat from online retail is real, but that doesn’t mean brick-and-mortar retail stores are failing … it just means investors have to get creative.

That might mean integrating omni-channel options … warehouses that provide last-mile delivery and stores that offer online order pick-up, for example.

But the big question investors have to look at is how can we get more people here … and keep them here longer?

For example, don’t build a shopping center without integrating great places to eat and rest … you’ll get more customers who stick around, and a more successful investment.

Michael emphasizes that investors need to know about retail itself, from how retailers do business and which retailers sell what, to merchandising … putting the right tenants in the right spots.

That means making sure tenants are complimentary. Have a couple clothing stores? Make sure you look for a shoe store as well.

The fine details of retail investing

We asked Michael what he looks for when he is figuring out finances.

He said he wants the loan-to-square-foot amount to be $100 or less.

After that part is figured out, he does underwriting based on a 10-year lease.

Lenders range from big lenders to banks or private loans for turnaround situations.

“We really like to play in the 1 to 20 million dollar range,” says Michael. This puts him below big institutional facilities … but above the mom-and-pop shops.

How long does it usually take to rehab a distressed retail asset? Nothing ever goes as planned, Michael says, but three years is typical to execute a solid business plan.

Retail is a LOT different than single-family homes and apartment complexes, so we asked Michael to explain some of the big differences.

In retail, tenants typically get a retail improvement allowance.

Owners will offer a white box … drywall, drop ceilings, concrete floors, and bathrooms. They often offer an allowance to build out the store to the tenant’s specifications.

When tenants have very specific construction specifications, Michael says a good option is offering money or free rent so the tenant can deal with construction on their own.

Why should the investor pay for modifications to the retail space? It’s the standard … and investors want to draw in tenants that will stay for 5 or 10 years, or longer.

Remember, if you’re not ready yet to take on an entire shopping mall, working with a syndicator is always an excellent way to dip your toes into retail.

To dive into ALL the details, listen in for access to Michael’s special report on retail investing. He covers the HOW and WHY of retail real estate in depth.

Listen to experts!

You can’t fake 30 years of expertise.

Our mission is to find subject matter guides who know what they’re talking about and can educate our audience … YOU.

Michael Flight is a great example of someone who walks the talk. He is an expert in this area … and we hope your curiosity about the retail market has been piqued.

For more wisdom from experts, check out our Future of Money and Wealth video series … or meet some of the best minds in the investing world at our annual Summit at Sea™.


More From The Real Estate Guys™…

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Tariffs, Trade Wars, and Crash Talk with Jim Rogers and Peter Schiff

Freedom Fest is a crazy collection of different mindsets and ideas … and that’s why we make it a point to attend as often as we can.

In this episode of The Real Estate Guys™ show, we talk to two fellow Freedom Fest attendees about their thoughts on the economic and political realities of the world we live in.

These two guests have earned the right to have an opinion … and today, they’ll help us understand their thoughts on the bigger picture and how that picture affects YOUR investing business.

You’ll hear from:

  • Your thinking-ahead host, Robert Helms
  • His crashing co-host, Russell Gray
  • Legendary investor Jim Rogers
  • Finance pro Peter Schiff

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Why YOU need to understand the economy

Peter Schiff has taught us that economics and politics are intertwined. Policy effects the economy … and vice versa.

There’s a lot happening in the wider economic world that affects investors on Main Street. Realizing that has affected our decisions as The Guys … from the events we attend each year to the way we structure our annual Summit at Sea™.

Friends and mentors like today’s guests help us understand the economic systems at work in the U.S. and around the world … and how those systems affect what happens in the financial headlines.

Speaking of headlines, you won’t hear these gentlemen very often in mainstream financial media because they don’t fit the narrative the media wants to tell … which is that an upward trajectory can continue forever.

As we know, anything involving money follows a cycle of ups and downs … and we’re in the midst of the longest economic recovery EVER.

There’s no doubt that at some point, we WILL hit a downturn. But there is good news … those who prepare for impact can thrive, even during bad times.

Words of wisdom from Jim Rogers

Legendary investor Jim Rogers co-founded the Quantum Fund with George Soros.  

We were honored to talk to him about what it takes to be an investor in changing times.

“You have to be open to change,” says Jim. To anticipate future changes, you have to realize the world WILL change. And it takes work, he says.

So how can we prepare? “When everyone’s exuberant, you should be worried,” Jim notes. “That means they’re not thinking.”

(Hint, hint: consider the current market.)

Jim has written several books. His most recent is called A Gift to My Children.

Although Jim didn’t originally want kids, he found out he was wrong once he had his own children. These days, he is always thinking of what he wants to teach his kids.

That’s what the book is about … the lessons he has learned in investing and in life, for his kids … and yours.

We also asked Jim for his thoughts on cryptocurrencies. He said, “Blockchain is going to change everything we know.”

That means a lot of people being put out of business … but it will also CREATE a lot of new businesses. So don’t worry.

We can translate that same idea to the broader economic world. You’ve got to go through a downturn to get to an upturn.

Jim reminded us that the Chinese word for crisis, weiji, means both danger and opportunity.

Speaking of China … that’s where Jim lives. He decided to move to the other side of the world to make sure his children grew up speaking Mandarin … they’re now fluent.

“China’s going to become the next great country,” he says.

Peter Schiff offers a voice of reason

We also enjoyed chatting with financial guru Peter Schiff. He has attended every Freedom Fest except one … and that was because his child was due.

Before the ’08 financial crash, Peter was a voice of reason. He maintained that the economy wasn’t great … everyone just thought it was.

The booming economy pre-crash was based on a bubble of appreciation, consumption, and inflated prices. People were deceived because it seemed like good news was around every corner … so they weren’t prepared for the bubble to pop.

As opposed to the bubble in ’08, our current bubble hasn’t provided boosts to the large majority of people, says Peter. We’ve just barely reached pre-recession levels.

So, why do these economic bubbles happen? It’s a result of what Peter calls “stag-flation” … stagnation PLUS inflation.

Subscribers to Keynesian economics believe unemployment causes inflation, so the idea that employment AND inflation could rise at the same time seemed impossible.

But inflation is caused by an expanding money supply, not expanding prices.

And the thing that keeps prices in check is the supply of products. Having a lot of stuff bolsters a strong economy and keeps a lid on pricing.

Scarcity is what leads to high prices.

Inflation in the 1960s happened because of policies from earlier decades, says Peter … high spending, high levels of borrowing, and the government’s decision to go off the gold standard.

According to Peter, today’s monetary policy is MUCH WORSE than anything that happened in the 60s and 70s.

And our economy is less secure … so we can’t just raise interest rates when things get bad.

Everybody is exposed, says Peter … because everyone has more debt and interest rate risk than ever before.

The Fed doesn’t want to think massive inflation is possible. “But it’s the problem you don’t see coming that gets you,” Peter notes.

The next crisis “will be bigger and will be worse.”

Peter talks tariffs and trade wars

People are excited about tariffs on China … but they shouldn’t be, according to Peter. “We derive the most short-term benefit from trade,” he says. “We have the most to lose.”

The problem is not the federal deficit … it’s the economy. When deficits pile up, we destroy our wealth, and right now we have HUGE trade deficits because of our fiscal policy.

We also have tax and regulatory codes that make American businesses less competitive.

But trade deficits offer us two BIG benefits.

First, we are getting a ton of REAL products … and it costs us nothing, because we can produce or borrow those dollars out of thin air.

Second, when the Chinese recycle those dollars, they buy U.S. treasury bonds.

So trade deficits mean prices are lower and interest rates are lower.

If Trump is successful on tariffs, Americans will have higher prices, higher interest rates … and a lower standard of living.

Tariffs “will make us the losers in the short term,” says Peter. They’ll also exacerbate any recession that happens.

We talked with Peter about one more thing … why investors should consider gold and international assets.

When we spoke, gold and silver prices were down. “That’s the flip side of optimism,” Peter says. “Optimism is not buying gold, because people usually buy gold when they’re worried, and people aren’t worried right now.”

“When no one is worried is when YOU should be worried,” Peter says.

Gold is more valuable now than it was in 2011, says Peter … but it’s also cheaper.

He told us there’s tremendous potential in gold mining stocks, as well as international assets.

Investors should look for where money will go when it flees the U.S. … and try to invest there before the economy crashes and there’s a stampede.

Remember, you can make 10 times the amount you invest … but you can never lose 10 times the amount. You can only lose what you put in.

For more from Peter, check out the Peter Schiff Podcast.

Get educated

Peter and Jim have a different way of looking at the world … and that’s a good thing.

If you’re learning some of their concepts for the first time, we wouldn’t be surprised if you’re a bit lost. That’s okay.

We encourage you to keep seeking out knowledge and multiple perspectives … so you can make informed decisions and be prepared for the future.

One great resource to consider is our Future of Money and Wealth video series.

We realized our conference speakers had a WEALTH of information to offer … so we decided to share it with YOU. This video series is great for beginners and long-time investors alike.

Remember … you can’t take effective action without education!


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


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Robert Kiyosaki on the Financial System, Fake Teachers and Real Assets

This summer, we spent time at events like Freedom Fest and the Red Pill Expo … where we bumped into some of our mentors and friends … folks like Peter Schiff and Robert Kiyosaki.

It’s not by accident we keep running into the same people. These folks all have the same desire … to read between the lines and find the TRUTH about what’s really happening in the world. And they don’t jump to conclusions.

Robert Kiyosaki has helped us see both sides of the story for decades. This time around we chat with him about his views on the financial system, fake teachers, and the importance of real assets.

In this episode of The Real Estate Guys™ show you’ll hear from:

  • Your very real host, Robert Helms
  • His faking-it co-host, Russell Gray
  • Best-selling financial author Robert Kiyosaki

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Get a REAL education

We spoke with Robert Kiyosaki at Freedom Fest. “I come to learn,” he says.

Freedom Fest and similar events … like the New Orleans Investment Conference are like a mental gym. “They challenge the way I think,” says Robert.

That’s one reason educational events are so important (like our Future of Money and Wealth webinar series, which features talks by Robert and many more financial gurus).

REAL education is more than just listening to the salespeople. It’s getting outside your cocoon and seeking out new information.

Invest in your PASSION

One idea Robert thinks is really essential in the investing business is to invest in what you love and enjoy. “I do think real estate is the best,” says Robert … that’s why it has been his bread and butter for years.

But maybe avocadoes are your passion … in that case, perhaps you should consider investing in an avocado farm.

You should always do your due diligence and work with a good financial planner … but investing in your PASSION will always be more successful than investing in something you’re “meh” about.

REAL assets, REAL money, and REAL teachers

“We don’t have a prayer as long as we’re working for money,” says Robert. He believes investors should steer away from money … in favor of REAL assets.

Investors should also surround themselves with REAL professionals … those who’ve done their research and know what they’re talking about.

A lot of people are in trouble because they’re learning from FAKE teachers, says Robert … people who don’t have a real conception of cash flow.

Two other things investors should be aware of … FAKE money and FAKE assets.

Be wary of a monetary system that isn’t backed up (by gold, for example), and don’t rely on traditional assets, Robert advises.

If you’re doing everything “right” … working a 9-to-5 job, putting money in your 401k, investing in stocks … you’re being screwed by the system, says Robert.

SMART investors have to learn to work WITH the system.

For more on FAKE versus REAL, check out Robert’s upcoming book FAKE, which will be released as an entirely digital series.

REAL talk about our financial system

Central banks control paper money … and that’s dangerous, says Robert. He cites people like Jim Rogers, who believes we’re headed for the worst crash yet because we have an abundance of printed money and debt.

“Tragedy follows printing money,” says Robert.

But it doesn’t matter how bad the system is … what matters is the actions YOU take. We like to say BE the Fed … don’t BEAT the Fed.

That means figuring out how to make the most of our financial system … knowing the tax laws and figuring out how to make them work for you.

“The next collapse will look like something we’ve never seen before,” says Robert.

But investors don’t have to be scared … if they prepare for the inevitable BEFORE it happens.

We talked with Robert about digital currencies, like Bitcoin. “Gold and silver were here before us and will be here forever,” says Robert.

But investors need to look at real assets (like property and gold), cybercurrency, AND paper money when they’re investing … because they’re the three big components of our current monetary system.

Smart investors work to figure out what is real and lasting.

For more from Robert Kiyosaki, read the classic book Rich Dad Poor Dad … if you haven’t already. And check out the Rich Dad Radio Show.

A REAL financial expert

Robert has been studying the financial system forever. He remembers the history of money and has watched the financial system change.

As we often say, “Those who fail to remember history are doomed to repeat it.”

You HAVE to understand financial fundamentals and the structure of our financial system before you can read the news and really SEE between the lines.

Like Robert says, a crash is highly likely … we can’t predict WHEN it will happen, but we CAN hedge against the eventuality of it.

Get educated … so you can stay on top of the wave when the tsunami comes.


More From The Real Estate Guys™…

The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.


Love the show?  Tell the world!  When you promote the show, you help us attract more great guests for your listening pleasure!