Alternative Capital Solutions – Billy Brown

Alternative Capital Solutions – Billy Brown

 

If your banker says it’s a no-go on your loan … You’ve still got options!

Real estate investors seek infinite returns using money to make money … but how do you get your hands on OPM?  (that’s short for “Other People’s Money”)

What do you do if your banker says no … And you don’t want to give away equity in your deal? 

That’s where Billy Brown and his team at Alternative Capital Solutions come in.

They can help you with both Bridge and Permanent lending solutions for your SFR portfolios, multi-family, self-storage, mobile homes, hospitality, retail, and office deals in most states in the U.S. … and have solutions for foreign investors as well! 

As a real estate investor himself, Billy Brown knows the importance of creative and reliable lending. 

Billy educates other realtor and investor groups throughout the country on how to become more profitable using the right lending tools.  

So, as Vice President of Business Development for Alternative Capital Solutions, Billy works hard to help investors like YOU make deals happen. 

Alternative Capital Solutions underwrites in-house and outsources funding through its network of bank and non-bank lenders … to speed up your approval process.  

And when Billy and his team deliver the funding request, it is completely packaged up with a credit memo … so there are few, if any, questions before the lender delivers OPM to your escrow. 

Loans available range from $200,000 and can go up to $50 million … so get started on the path to capital for your next deal. 

Whether you want a thorough financing and leverage check-up on your entire portfolio … or to cash out some equity to re-invest for more profits … or just want a peek into the possibilities for financing a current deal … 

Simply fill out the form below for a quick review of your options and a representative from Alternative Capital Solutions will reach out to discuss all the possibilities!

Getting Started in Commercial Real Estate Investing

Expanding your portfolio from single-family homes to multi-family deals is a great step … but there are other paths to an even bigger deal!

Commercial real estate investing means bigger properties and bigger opportunities … and it could yield BIG benefits for savvy investors.

From retail storefronts to office space to industrial warehouses … commercial property is full of options … each with their own pros and cons.

We’re excited to welcome to the show a seasoned investor who’s found success in single-family homes, multi-family apartments, and commercial properties. (He really knows his stuff.)

In this episode of The Real Estate Guys™ show, hear from:

  • Your host, Robert Helms
  • His co-host, Russell Gray
  • Founder and CEO of Wilson Investment Properties, Tom K. Wilson

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Considering commercial

Real estate is a resilient product … that’s why so many people are eager to get in the game.

There are tons of ways to invest in real estate. Most investors start with what they know … single family homes. But that’s not the only way!

We see commercial real estate as a great opportunity for beginning investors … and for experienced investors too.

But commercial real estate deals are not all created equally

There are different product types, different lease lengths, and different landlord laws. And then you have to choose between existing properties and new construction.

Tom K. Wilson has done half a billion dollars in real estate with thousands of units in many different places … and he knows the perks of commercial real estate.

Like many investors, Tom started his real estate career in the single family marketplace.

We promote the value of surrounding yourself with smart people …. and that’s exactly what Tom did. He soon realized an interesting pattern.

Most of the successful investors Tom knew were investing in areas away from where they lived. By investing several states away, investors found better deals and growing markets.

So, Tom started looking elsewhere. He found the Dallas market … and his first commercial deal.

Dallas was more landlord friendly than Tom’s resident Bay Area. It also offered more consistent cash flow and held up well during the recession.

Tom noted that there were some serious benefits to owning a commercial property as opposed to single-family homes or multi-family deals.

After the 2008 crash, these types of commercial deals were performing better than their residential cousins … and they tended to come with a higher level of professional management.

Typically when we talk about commercial property, we’re talking about leasing your property to a business rather than a person.

It could be a retail establishment, a strip mall, an office, a restaurant, a gas station, a bowling alley, or a manufacturing facility … it’s all commercial!

Like every asset class, there are pros and cons to investing in each type of commercial property.

Investing in industrial

Industrial properties can include warehouses, operation centers, distribution centers, and manufacturing sites.

Professional tenants that pay for a long time are one of the best things about industrial assets.

They’re also very versatile … a variety of businesses can use a property with wide open space, offices, and loading docks.

When searching for an industrial property, note rooftop expansion and passing traffic. Can the site offer prominent enough visibility to attract major brands?

Determine the path of progress for the community … this can signal if the area has the breadth of economy to support a big business.

Tom comments that manufacturing sites in particular could offer great opportunities for future returns as manufacturing makes a comeback in the United States.

The downside of industrial sites … they tend to be a single tenant product. If your tenant goes bankrupt, you’re left searching for a new source of cash flow.

“The odds of that happening are very low if you’ve done your due diligence during vetting,” Tom says, “so all in all I tend to consider the right industrial property a very good product.”

The details on retail

If you think everything is bought online … think again.

You can’t get a haircut online. You can’t meet your buddy for a drink online. You can’t take your dog to the vet online.

Everyone needs a place to live … and they often pick where they live based on where they can access essential services.  

“Retail has become a four-letter word for many investors,” Tom says. “I prefer to call these types of assets ‘neighborhood service centers’ because that is the key.”

Many large retailers are expanding their brick and mortar stores despite the online shopping craze … and online retailers like Amazon are investing in brick and mortar locations to build their brand.

Like any asset class, there’s the good, the bad, and the ugly … but don’t discount retail without the proper research.

Operating in office space

Every day, people wake up and go to work.

It’s true that more and more people are working from home … but there are still daily needs for human interaction in business.

“I don’t think it is realistic to believe we’re going to see the day where everybody’s working from home,” Tom says.

Both single and multi-tenant office spaces offer excellent opportunities for commercial deals.

Tom recommends looking for office spaces that combine work centers with service centers as the demand for more office space near entertainment venues and amenities rises.

Having an experienced team or partner on the ground that knows the area is especially important when buying office spaces. Locals will have the best read on where people want to spend their nine to five.

Commercial success through syndication

You don’t have to have a lot of money to get started in commercial real estate.

Tom has built his commercial real estate portfolio through the power of syndication.

At some point, you run out of your own purchasing power … you’re out of dollars and cents but not out of enthusiasm, passion, or expertise.

“Syndication is the law of compounding,” Tom says, “not just in numbers but in education, wisdom, and relationships.”

Partnering with those that have a proven track record, established credibility, and integrity sets you up for investment success.

And by combining financial assets, you can do bigger deals and see bigger returns together than you ever could alone … especially in the commercial space.

Like any investment, education is key.

Learn how to leverage experts through syndication and tips for successful commercial deals in Tom’s special report Commercial Real Estate – The Best Investment Secret.

Whether it’s your first deal or your first step into a new market, consider taking a look at commercial real estate investments to make equity happen.


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Think like a big dog …

Whether you’re an active real estate investor out there finding and managing deals in your own account …

… or you’re a passive investor looking to invest in someone else’s deals …

… or you’re a syndicator putting together deals on behalf of your passive investors …

… it can be smart to think like a big dog.

After all, major players have big research and due diligence budgets.  They hire big brains to study the market and make smart strategic decisions.

YOU can learn a LOT … just by watching what they’re doing.

Sometimes you can get in front of a big wave they’re about to create and ride it.

And sometimes you can front run them … buying what they want BEFORE they get there … selling to them at a premium when they arrive.

(We think there could be a particularly good opportunity to get in position to do this in the residential assisted living space right now.)

So even though you can’t play at their level, you can still get in the game by paying attention and being more nimble.

For example, this headline caught our attention …

Apollo is Targeting $1 Billion for U.S. Real Estate Fund Bloomberg 11/20/18

Apollo Global Management LLC has started talking to investors about its third U.S. real estate fund …

Hmmmm … $ 1 billion is a chunk of change.  And apparently it’s not their first rodeo.

In fact, Apollo has been around since 1990 and has over $270 billion under management.

Not that we’re promoting or vouching for them.  We’re just saying it seems like they’re qualified to have an opinion about investing.

So back to the article …

“Investment will be in senior housing, hotels, retail”

A little deeper down we discover … in addition to these three … Apollo is also into industrial real estate and manufactured housing.

Of course, this doesn’t come as a big surprise to us or our long-time followers.

We’ve been paying attention to sub-niches in senior housinghotelsretail,industrial and manufactured housing for quite some time.

But even though it’s affirming to have a big dog like Apollo see what we see … it’s not like we’re geniuses.

The clues in the news, trends, data, and our discussions with our boots-on-the-ground contributors make it easy to see the opportunities.

Of course, seeing the opportunity and knowing someone in the space … is just the beginning.

It’s also important to think about your personal investment philosophy … build great relationships with a solid team … and structure things to endure in both good times and bad.

Recently, the wild ride in the stock market is reminding 401k owners how fickle paper equity can be.

It’s no surprise smart fund managers are looking to real estate as a way to find high risk-adjusted returns … and stability in a volatile world.

Right now, we’re watching Wall Street investors race each other to the exits … leaving a flood of red in their wake.

And while history doesn’t necessarily repeat itself, it often rhymes.

Remember, after the dotcom bust at the turn of the century … frightened capital found a safe haven in real estate.  It just might be happening again.

For those already there, it could make for a fun ride.

Until next time … good investing!


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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™.


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It’s fun to LOVE the right real estate …

For Valentine’s Day we thought we’d muse on why the right real estate is easy to love.

Of course, the operative word is “right” … as in Mr. or Miss “Right” …

… because anyone who’s been in a bad relationship knows it’s hard to have the right relationship with the wrong person.

And the same is true with real estate.

Right now, stock investors are realizing their investment vehicle of choice is a little bi-polar.  When it’s good, it’s great.  But when it’s not … watch out below!

As we’ve already noted, we view the volatile stock market as a wonderful gift.

And while we don’t want to judge anyone else’s relationship … for us, it refreshes our love affair with the right real estate.

So let’s take a look at some clues in the news about where we might find the right real estate.

Retail vs Industrial vs Multi-Family

As is often the case, the flip-side of a problem is an opportunity.  In the case of the allegedly Amazon fueled retail apocalypse, the flip-side winner is industrial.

In fact, this NREI Online article reports on their survey of commercial real estate investors … and some interesting points are raised …

“ … the industrial sector is giving multi-family a run for its money.”

“ … whether it comes to occupancy rates, rents or even cap rates, sentiment has improved …”

“A majority [of respondents] think [the expansion cycle] will last more than a year …”

Now if you’re not a commercial property investor (yet) … there’s still useful insights here for you too.

For residential real estate investors … both single- and multi-family … it’s smart to pay attention to the flow of industrial and office investment.

After all, your residential tenants need places to work.

So when you see capital flowing into industrial and office properties, it can be a good sign for local area employment.

The survey also found …

“… a majority of respondents (64 percent) said warehouse / distribution facilities in traditional locations would be most in demand going forward.”

And quoting one of the respondents …

“E-commerce has resulted in changes to product shipment from distribution centers, as opposed to from retailers.”

These surveys are interesting because they represent fairly current viewpoints of marketplace actors.  These aren’t economists, researchers, or academics.

The respondents are the people with the checkbooks … who are deciding whether and where they’ll invest … or not.

So it’s one thing to listen to experts speculate on what decision-makers will do … and another to hear directly from market participants.

It’s just another of the MANY reasons why we attend live conferences where we can have “man in the market” conversations …

… often with people who have no marketing agenda … and are willing talk candidly about what they’re doing and why.  Those conversations are gold.

While far from scientific, it’s a great way to get a sense of a market, sector, or demographic … and affirm whether or not some pundit’s prediction has any real-world validity. 

Shift Happens

As e-commerce changes how retail businesses operate, their landlords feel the pain too.

But as the retail business shifts from walk-in to delivery service … while challenging for mall operators,  it means a big boom for distribution …

.. .and the markets, properties, and jobs that make distribution happen.

We’ve been longtime fans of distribution towns like Memphis and Dallas for this reason.

Other great things about distribution include the creation of working class jobs (great for tenants),  in relatively affordable areas (better ROI on properties).

And those jobs are impossible to offshore because the work needs to be done near the consumers.

Of course, we hope President Trump’s pledge to bring manufacturing back to the United States works out “bigly”.

So we’re watching for the revival of rust-belt markets.  If we see commercial money move in, then residential is probably not too far behind.

But until manufacturing brings the front-end jobs back to the U.S., distribution is the other end of the supply chain.

After all, when all the stuff made in China and Mexico arrives in the United States, it needs to be distributed to the local consumers.

Commercial Investing … Not Just for the Rich

If you’ve ever gone shopping for a warehouse, big apartment complex, or mobile home park, you probably noticed they’re a little pricey.

But you don’t need to feel left out.

The secret to going bigger is syndication.  It’s a way to take your real estate investing hobby and turn it into a full-time enterprise … with a lot of upside.

It’s not as complicated as it seems because you can even hire the experts and mentors you need in whatever niche you choose.

We’ve seen many mom-and-pop investors build big multi-million-dollar portfolios simply by sharing their deals with private investors.

Of course, the other side of the opportunity is to be one of those “silent partners” in a syndicated deal.

So we created the Investor Registry to help private investors find the kind of opportunities they’re interested in.

Looking for Mr. (or Miss) Good Deal

Only the older folks will have any idea what that means … but everyone who’s ever date to find a good match knows it can be a minefield.

And yet, almost everyone does it anyway.

We realize the urge to invest isn’t as compelling as … well, you know …

But the point is there’s some work to do to find the investment markets, sectors, and opportunities best for you.  No one can do it for you … and it won’t happen by itself.

But like true love … when you find it, it’s awesome and totally worth the effort.

Until next time … good investing!


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.

09/20/15: In Search of Yield – Creating Cash Flow from Commercial Real Estate

If you’ve ever wondered how to invest in commercial real estate, this is a great episode to get started with.Commercial real estate is a way for residential real estate investors to expand their horizons and find alternatives to houses and apartment buildings to create passive income from real estate

That’s because there are MANY ways to make money from commercial real estate.

And as we’ve been discussing for the last few episodes, with cash flows on residential real estate tightening, alert investors have already begun to widen their horizons.

In The Real Estate Guys™ radio show studio helping you widen your real estate investing horizons through a look at how to invest in commercial real estate investing:

  • Your wide open host, Robert Helms
  • His horizontal co-host, Russell Gray

Commercial real estate is both a deep and wide topic.

Flitting across the surface of the topic, there are three major categories of commercial:  Office, Retail and Industrial.

But that’s far from exhaustive.

And then going deep into each of the big three, there are all kinds of sub-categories.  And it’s WAY too much to cover in one episode.

So the purpose of this edition of The Real Estate Guys™ radio show is to give you an overview of some of the many options available when you enter the wide, wonderful world of commercial real estate.

How to Invest in Commercial Real Estate – OFFICE

How to invest in commercial real estate - Office buildings are an alternative to residential real estate for creating passive income through real estate investingWhen it comes to office real estate, the first thing most people imagine are office buildings holding white collar workers all sitting at desks starting at computer screens and shuffling papers.

But there’s more to office than just that.  And it’s a good thing.  Because as technology has empowered a virtual workforce, the need for mainstream office space has been affected.

Today, many people telecommute.  That means less desks…or some cases, shared space.

And with more people free lancing, executive suites and collaboration stations are growing in popularity.

Also, with so many records digitized, it’s less important to keep physical records in close proximity of workers.  This reduces the need for high priced office space, while adding to the demand for off-site record storage.

Yes, there are still businesses that retain hard copy documents for many years…often for compliance reasons.

How to Invest in Commercial Real Estate – MIXED-USE

Also growing in popularity are mixed-use buildings where people live above offices or retail space.  Part of this shift can be attributed to younger people waiting longer to start families and move to to the suburbs.

Another factor in the popularity of Mixed-Use is traffic congestion and people’s desire to reduce the amount of time they spend in cars to go to work, shop and socialize.

How to Invest in Commercial Real Estate – RETAIL

From strip centers, to shopping malls, to single-purpose structures like car washes or that coffee kiosk in the parking lot, retail real estate comes in a variety of shapes and sizes.

How to invest in commerical real estate - Retail real estate investing is an alternative to investing in rental houses to generate passive incomeAnd while office has certainly been affected by technology induced societal changes, retail much more so.

So as a retail real estate investor, it’s important to understand how the internet is affecting your tenants, the retailers.

One only needs to consider that Amazon, a company with not a single retail location, has surpassed Wal-Mart in terms of stock market capitalization.

People order MANY things on-line (one of the reasons we love markets like Memphis, Dallas and Atlanta that are distribution hubs).  This means they aren’t necessarily going to the corner store to buy them.

Therefore, a smart retail landlord manages his tenant mix carefully…preferring businesses whose products or services require customers to visit them.  You can’t order a sandwich, a mani-pedi, or a haircut online.

But it’s more than simply making sure your tenants have local customers and aren’t losing business to websites.

A good tenant mix will promote cross-selling.  So when a customer comes to the center to drop off their dry-cleaning, they can get get a haircut, or a teeth cleaning, or massage.

In other words, you are helping your tenants leverage each other’s traffic, by offering a complimentary mix of products and services and getting more of that customer’s spending to happen in your retail center.

How to Invest in Commercial Real Estate – INDUSTRIAL

Although it isn’t glamorous, industrial space can be a stable way to generate long term cash flows.

How to invest in commercial real estate - Industrial tenants often sign long term leases because it's expensive and difficult to move all their equipment to a new locationWhen a business rents a building and loads it up with equipment, whether it’s light manufacturing, auto repair or something else…it takes a lot of time and hassle to move.  So they don’t.

And they’re happy to rent because they don’t want to tie up their money in real estate.  They need it for equipment and inventory.

As you can see the list of commercial opportunities is long and diverse.  And we only scratched the surface.

But as people pile into pile into the the ever more crowded residential space because it’s easy to understand, if you’ll take some time to learn a commercial niche, you may find less competition and more profits are waiting for you.

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

Getting Your Retail Real Estate in Shape

Retail has been a battered sector of late.  It was bad enough that the internet migrated lots of shoppers out of malls and into cyberspace, but then we had to go and have a financial crisis.  When it rains it pours.

Of course, with every crisis comes an opportunity.  And as we’ve been saying for months, when the going gets tough, the tough get creative.

The Wall Street Journal recently published an article about how health clubs have become the beneficiary of and the a savior to a tough retail real estate market.  The lesson is that when the market changes, you have to think outside the box.

If you’re facing challenges with any of your properties, then get around the most creative people you know and brainstorm about solutions.  It may seem obvious, but sometimes we get stuck on a problem and just try thinking harder.  Sometimes it’s more important to think differently.

Albert Einstein (we heard he was a pretty smart fellow) said:

“You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.”

How true!

And if you need a little inspiration, click here to listen to our podcast Creative Solutions to Today’s Property Problems.  Then use our Feedback page to tell us about your problem and creative solution.  Who knows?  Maybe you’ll end up as an inspiration for another investor somewhere down the road!

 

6/27/10: Cashing In on the Changing Retail Market

Retail real estate across the country has been mauled by the recent bear market. Many large retail centers are vacant and dilapidated, while many more are under performing.  What’s next for retail?  More importantly, what’s the opportunity?  To find out, The Real Estate Guys™ call on a big deal hunter who has over 30 years and billions of dollars of experience!

On safari in the studio for this broadcast:

  • Driving the jeep in his khaki’s and bush jacket, host Robert Helms
  • Pushing the jeep in his leopard skin loin cloth, co-host Russell Gray
  • Riding shotgun and snacking on frikkadels, the Godfather of Real Estate, Bob Helms
  • Big deal hunter, special guest Tom Morris

When you enter the jungle of real estate investing to hunt for opportunity, you never know what challenges will cross your path.  Many obstacles and dangers can be avoided.  Others must be met head on.  Of course, when you’re hunting, your objective is to locate the prey and subdue it.  In other words, there’s risk involved.

Shooting fish in a barrel or hunting rabbits is one level of risk…and one level of reward.  Going after the big opportunities often entails a higher level of risk and requires a higher level of skill and experience.  That’s why most investors are well-advised to start small.  It’s also a really good idea to be mentored by more experienced hunters before taking on the big game.

So you can imagine how excited we were when we first met Tom Morris.  He’s been hunting big time real estate opportunity for over 30 years and after billions of dollars of deals, he’s telling us that now is one of the greatest times ever to be a real estate investor. Really?  Okay, we’re listening!

Although he’s very experienced in all types of real estate, Tom’s love is retail.  We’re talking BIG TIME retail – as in shopping malls and retail centers with hundreds of thousands of square feet (on the small side)!  Tom’s been involved in mall projects with millions of square feet and hundreds of retail tenants in a single project.  Wow!  THAT’S big game.  Of course, if a big deal turns on you it can devour you very quickly, so you better know what you’re doing!  Fortunately, Tom tells us there are many things you can do to mitigate risk.

We start quizzing Tom about the state of retail in the wake of the Great Recession. What are the problems?  What are the causes?  Where are the opportunities?  We were SHOCKED to hear how BIG the discounts are on distressed retail assets.  It’s AMAZING how, with relatively little money, you can acquire assets with HUGE UPSIDE potential. (Sorry for all the caps.  We’re just EXCITED!).

BUT…(and it’s a big but), you better have a plan.  And you better have connections.  And you better be able to think outside the big box.  If you do, then there’s BIG money to be made!

Tom shares with us some of the creative strategies he’s currently employing to acquire and re-hab distressed retail properties.  Even if you don’t have plans to be a mall mogul, the principles Tom employs are applicable to other types of real estate.  Besides, any time someone with 30 years and billions of dollars of experience wants to share their wisdom, we think it’s a really smart idea to listen. Our attentiveness is rewarded when Tom reveals the single most important component of his success and the #1 investment of his career.

Not everyone is able to chit chat with a big time investor.  Tom doesn’t do seminars, write books or sell boot camps.  He’s just out in the real world doing the real thing.  That’s why you have The Real Estate Guys™!  Our mission is to hunt down big brains, powerful ideas and great resources that help you succeed.  Your job is to listen, learn and take action.  Plus, we really appreciate it when you tell all your friends about The Real Estate Guys™.  Enjoy!

2/21/10: Commercial Property Update – Woes, Recovery & Opportunity

Many people think that the residential real estate crisis and its impact on banks and the secondary mortgage market have set the table for an even bigger implosion in commercial real estate.  But if you believe that opportunities often come dressed as problems wearing work clothes, maybe that isn’t so bad.

In studio today to take a look at the State of Union in commercial real estate are:

  • Your President and host, Robert Helms
  • Co-host and teleprompter operator, Russell Gray
  • Our Speaker of the House, the Godfather of Real Estate, Bob Helms

With so much focus on the residential real estate and mortgage markets, which is of much greater interest to the main street consumer and news outlets which cater to them, we thought it would be interesting to take a look at the commercial side of real estate.  Many observers think that there are dark days head for commercial properties, but what are the current trends?  More importantly, where are the best opportunities today and in the future?

We start out by taking a look at the sales and pricing trends in retail real estate.  What affect is the soft economy and subdued consumer spending having on retail occupancies, rents and cap rates?  Will money be available to purchase and refinance these properties?  Will there be buyers?  Inquiring minds want to know!

Sticking with the discussion of concerns about the availability of funding, we delve into a discussion of what’s happening in multi-family where government subsidized money has been plentiful.  With the pressure on Fannie Mae, will multi-family residential funding remain available?  What if it dries up?

Another side effect of a soft economy is financially weak or insolvent tenants.  Are commercial tenants starting to walk away from leases like homeowners are walking on upside down mortgages?  And how likely are they to accept rent increases?  It seems to be a tenant’s market right now.

Now there are lots of facets to commercial real estate and we can’t possibly cover them all in one show, so we decided to wrap up with some talk about office – and what’s happening to vacancy and rental rates in today’s “jobless” recovery.  If that isn’t an oxymoron, it should be.  It’s like saying “reliable copier”.

Of course, we can’t talk about all the challenges without remembering that problems often bring with opportunity – for those willing to think independently and outside the box.  As always, there are no magic formulas or one-size-fits-all solutions.  Challenging markets require courage, creativity and the kind of capital that comes as much from time, talent and relationships as it does from credit lines and cash deposits.  The good news is that when the going gets tough, most of the competition goes off and follows the herd to “greener” pastures.  If you believe the real estate “grass” will grow again, then it might be a good time to stake out some new territory.

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