On how to take advantage of biggest real estate gold rush in 20 years.

[MKHB]

Ask me how to take advantage of the coming tsunami of activity in :

Commercial Development
Landlord Leasing
Tenant Rep Leasing
Asset Management
Property Management
Construction Manager
Asset Management
Energy Management
LEED Consulting
Energy Star Modeling
1031s
Reverse 1031'
Sale lease backs
Build to suits
Creative work space
Live work space
Recapitalization

 

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[MoneyDoc]

Landlord leasing + commercial development.

 

[keiji dan]

Commercial Development

 

[smartman]

why is there a tsunami coming?

 

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[BlakeIC]

I am interested, 2nd thread regarding real estate

 

[MKHB]

why is there a tsunami coming?

@smartman

CRE is at an inflection point.

There has been considerable amount of wealth generated in the last 48 months, with some markets now showing overbought. This will continue because we now have supply in the pipeline because development is back and it takes years for this inventory to get in the system. For every crane (dev. project) you see in your area - there are 6 more in some stage of inception ( finance stage/entitlement/plan check/per permit).


This period creates a tremendous amount activity (selling, buying, leasing, building, recycling,re purposing) a "need" is created where the big players cannot handle all of the activity and creates opportunity for eager, ambitious newcomers to take advantage of opportunities that would not normally be as easily had. Also bear in mind that despite what you may think, big players (CBRE/Cushman,etc.) capture less than 10% of all transactions the rest is performed by non institutional operators.

In other words it is like a stock market run up - winners want to lock in their gains by selling/re-positioning and those still on the sidelines (new capital) is now desperate to put it in place (buy). You have to understand the mindset of the slowlaners in this business (I was one) , this is no place for independent thinking, all you want to do is hide. Buy what everyone else is buying.

It's OK to loose as long as you lost doing the same as your competitors - but if you sat on the sidelines during a run-up your toast.

 

[jon.a]

@smartman
It's OK to loose as long as you lost doing the same as your competitors - but if you sat on the sidelines during a run-up your toast.

What?

 

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[MKHB]

I am interested, 2nd thread regarding real estate

@BlakeIC
Depending on where you are located and what your aptitude and ability/willingness to get in front of people- you could make a considerable amount of money to help fund your fastlane ventures or if your young enough (unlike me) you could bring a new perspective to an industry that ripe for disruption.

 

[MKHB]

What?

@Jon Now I'm talking fund managers, acquisitions guys, corp tools, salaried 9-5ers that are paid to find deals with OPM.

Not private investors with their own money.

 

[jon.a]

@Jon Now I'm talking fund managers, acquisitions guys, corp tools, salaried 9-5ers that are paid to find deals with OPM.

Not private investors with their own money.

I'll go back to lurking.

 

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[MKHB]

I'll go back to lurking.

Somebody has to.

 

[natopotato]

As a general contractor in downtown Chicago, what should my company be doing to take advantage of the commercial real estate runup? We work with individual investors on the West Coast to flip houses for them in the city, but would like to ramp it up to the next level. Thanks for taking some time to do this!

 

[MKHB]

As a general contractor in downtown Chicago, what should my company be doing to take advantage of the commercial real estate runup? We work with individual investors on the West Coast to flip houses for them in the city, but would like to ramp it up to the next level. Thanks for taking some time to do this!

Downtown Chicago - you are ground zero. I am assuming you meant to say west side not west coast.

In any event, if you haven't done significant ground up I would focus on securing TI contracts. I am not that well versed on the Chicago market and do not now the labor rules, I would assume most significant ground up is Union and if you are not a Union shop you don't want to mess with trying to be a "dual gate' operator - that never works.

There are a of tech and progressive companies migrating out of the suburbs and into the loop and downtown areas, you should focus on becoming the a go to techno friendly contractor,i.e., up on all things sustainability/shared work practices/LEED.

Or, become a reposition expert - the Chicago area has a lot of old Class B & C buildings that need to be renovated too compete for credit tenants- become well versed in facade/MEP upgrades/LED retrofits.

Use these value add skills to seek out more third party contracts and eventually leverage your talents for equity participation.

 

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[smartman]

I am going to change my username to Confusedman

 

[BlakeIC]

I am all ears @MKHB i am just confused like everyone else

I am 18

 

[MKHB]

I am all ears @MKHB i am just confused like everyone else

I am 18

@smartman @BlakeIC

I will type really slow, for those still confused...

Commercial Real Estate transaction volume is on pace to surpass the record breaking year of 2007, and of this activity, a lot of the transactions are in the sub 5M range. The deals are too small to get any attention from the big-players (CBRE/Cushman etc.) and are usually handled by the local, part-time, jack-of-all-trades commercial-residential realtor. These part-timers are usually the slowlane types, semi-retired, the soccer mom that does a little real estate in between PTO fundraisers, or old folks that just need something to do until they move to Florida.

And therein lies the need (opportunity); be proactive and reach out to that undeserved segment of the market. They are waiting to hear from you, so you can solve their problem; i.e., my property has gone up...should I sell, should I buy more, should I renovate and sell for more, should I tear down and build brand new, or retrofit to a more popular use???

How does someone with little resources, education, or experience take advantage this? Simple...action.

1. Learn the basics of commercial real estate, youtube, globestreet.com, REIT.com, MIT/Cornell opencourseware;
2. Contact a local boutique brokerage and tell them you're hungry, eager, and want get a real estate license, they will gladly assist you;
3. Get a RE lic. it will cost anywhere from $200-500 for the RE school and the application fees - depending on your jurisdiction.
4. Contact every recent buyer (5 years or less) of commercial real estate in your area and ask them what their acquisition parameters are;
5. Go to the county and get info to build a data base of every parcel of commercial real estate in your area-according to use MF/Office/Industrial/Retail. Make friends with the people at the county - get insight on new or proposed - roads, zoning changes-scuttlebutt.
6. Contact the owners of this RE, inquire about any plans to sell, if so can you meet with them to give them some free, no obligation market analysis;
7. If you do not have a license at this point, inform them that you are working with buyers who are actively seeking and can you meet with them;
8. If you've obtained your license, tell them you are working with buyers and would like to talk about listing their property.
9. Now, if you get any owners interested in selling or you secure the listing, go back to the potential buyers (#4) attempt to secure a buyers agreement from them, if you are licensed at this point. If you are still not licensed at this point you need to secure a finders fee agreement from them.
10. You will be compensated by either commissions (licensed agent) or referral/finder fees (unlicensed agent).

And, after you get a couple of transactions under your belt and you are truly a fastlaner, you can reach out to @Andy Black on how to implement a savvy adword/SEO strategy, and scale it up to the next level (other areas, bigger deals).

This is not an invention, there is no need for a prototype, or significant seed funding or learning code or copyrighting, is simply an opportunity that comes around when the commercial real real estate market overheats-just like it did in 2005-2007. You don't own anything, you're not buying anything, there is no risk, you are simply selling picks and shovels to people coming (buyers) and and people going (sellers).

 

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[DeletedUser397]

Is there any way to get involved in this without having a real estate license? For someone who wants to jump in, are there any legal hurdles or tricky legal issues/taxes to be aware of where to read about them?

Do you think there are any digital/tech opportunities related to this boom that haven't caught up with the technological advancements in other industries? Or is this opportunity mostly confined to going out with a physical, local presence?

Do you see any major problems, annoyances, frustrations or issues with the way this market works, typical lead generation, analysis of a property, buying/selling transactions ...work?

Also, considering your involvement in the real estate market, do you think there's any advantage speaking Mandarin (Chinese)? And if so, how valuable is that... to be able to leverage potential Chinese buyers or is that mostly just overhyped buzz?

Thanks.

By the way, the "globestreet" link redirects to CNN for some reason.

 

[MKHB]

Landlord leasing + commercial development.

Landlord Leasing:
I could go on all day about the opportunities that exist with agency leasing opportunities. Suffice to say the product in demand, e.g., high tech, we work type space, creative office, now accounts for nearly 30% all space in CA, and the rainmakers at all the big brokerages are not the types (like me) that are real savvy on this stuff. For the first time in agency leasing history, (anecdotal observation of course) most of the clients are now younger than the leasing agents. And almost all the new ground up space being built has some technology influence to it.
This creates a an opportunity to secure more agency assignments that a younger person would not of stood a snow balls chance if the Landlords prime tenant base was your typical financial/legal tenant a few short years ago.


Commercial Development
E-commerce: The need for ports to become Panamax capable and the infrastructure costs needed has created added opportunity in towns that are upgrading their facilities, Savannah, Charleston, Jacksonville, Newport News, Baltimore. This ripple effect is creating a demand for new commercial development to serve these areas. Aslo, the need for state-of-the art fulfillment centers and huge data co location facilities to handle the increased demand is creating little boom areas springing up around developments being build by Duke Realty (Amazon) Digital Realty (Data Storage), as well as near remote facilities built by Facebook, Google, and the NSA. In addition towns within the Google Fiber plans are now getting even more interest than usual Atlanta, Charlotte, The Triangle NC, Charlotte and speculators are upping their bets there.
Development success has always been in trying to determine the path of progress, go there and tie up the dirt - now it is a lot easier. All you have to do is call the help line.

Urban Lifestyle: due to the demand from millennials migrating to urban areas and the desire for cities and CBDs to be more environmentally friendly,municipalities are actually up zoning. Large developers (Boston Properties/Avalon Bay/Mack/Federal Realty) are taking advantage of this little known phenomenon and securing entitlements through independent operators out there beating the bush and dong the assemblage work.
That crappy area where the drug dealers and prostitutes loitering in front of the tow salvage yard is now going to be a 7M 200 unit mixed use development site.

Suburban: The suburbs are dead for now. If you own commercial real estate especially traditional office/retail you are fxxxed. Every developer, every speculator, is already aware of this, the only thing that is keeping suburban properties from becoming the next major distressed class is gas. The average gallon sits around $2.50, when China recovers and gas heads north of $3.50 this shoe will drop. So therefore, big money (funds/REIT/Private Equity) are rotating out.
The opportunity lies in securing entitlements for building the next generation more walk- able, self- contained, urban style mixed use developments in the suburbs-bringing the city to the suburbs and with it the demand for that sought after segment 18-35 year olds, all at a bargain price.

 

[MKHB]

Is there any way to get involved in this without having a real estate license? For someone who wants to jump in, are there any legal hurdles or tricky legal issues/taxes to be aware of where to read about them?

Do you think there are any digital/tech opportunities related to this boom that haven't caught up with the technological advancements in other industries? Or is this opportunity mostly confined to going out with a physical, local presence?

Do you see any major problems, annoyances, frustrations or issues with the way this market works, typical lead generation, analysis of a property, buying/selling transactions ...work?


Also, considering your involvement in the real estate market, do you think there's any advantage speaking Mandarin (Chinese)? And if so, how valuable is that... to be able to leverage potential Chinese buyers or is that mostly just overhyped buzz?

Thanks.

By the way, the "globestreet" link redirects to CNN for some reason.

Yeah your right, globest.com, my bad.

Great questions.

Is there any way to get involved in this without having a real estate license? For someone who wants to jump in, are there any legal hurdles or tricky legal issues/taxes to be aware of where to read about them?

This depends on your statutory regulations, but even then they are not that tricky. Just get a RE lic. First thing to do would be contact a local brokerage in your area they will help you get licensed and keep you abreast of the rules. And yes pay all your taxes, but consult your tax adviser on how much

Do you think there are any digital/tech opportunities related to this boom that haven't caught up with the technological advancements in other industries? Or is this opportunity mostly confined to going out with a physical, local presence?

Absolutely there is a new app or service coming on line daily - but I don't have the experience in the really high tech stuff to comment on - I come from a different generation - I can only help you with my experience and how it relates to the asset side of the business and the trends and how they stack up or compare to previous actions or what I think will happen or more importantly (the people I follow, Zell, Simon, Sulentic, White) think will happen.

Do you see any major problems, annoyances, frustrations or issues with the way this market works, typical lead generation, analysis of a property, buying/selling transactions ...work?

There is always room for improvement is that is what you are saying, another great question.
This is a business ripe for technological disruption, but it will probably be different generation that the one that runs it now to come up with it.

Also, considering your involvement in the real estate market, do you think there's any advantage speaking Mandarin (Chinese)? And if so, how valuable is that... to be able to leverage potential Chinese buyers or is that mostly just overhyped buzz?

I would not pretend to be an expert on Sino trends, that might be best gotten from Globestreet (globest.com) or the Wall Street Journal. I can tell what I have been told: almost 30% of all interest coming thru the big brokerages for Class A office, flagged hospitality and very high end condos in NYC/West LA/Vancouver is from the mainland buyers. The new Chinese Gov't rules removing some of the restrictions on offshore investments for main landers has created a real surge. Will the sagging economy hurt this trend...who knows..some say it will only intensify as there is a flight to quality in US hard assets (real estate). I have also heard that Chinese main landers are now even heading into secondary and tertiary markets, where before they would only buy in the Gateway cities (NY/CHI/LA/SF/Miami) along with other strong Chinese areas: Torrance/Irvine/San Gabriel Valley.

do you think there's any advantage speaking Mandarin (Chinese)?

LOL^^^^^^Are you kidding-I would rather speak Chinese than have an MRED fom Marshall (USC)

Great questions feel free to PM me on anything else would love to hear your progress.

 

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[IrishSpring600]

Is there any way to get involved in this without having a real estate license? For someone who wants to jump in, are there any legal hurdles or tricky legal issues/taxes to be aware of where to read about them?

In my state, the most you could earn is $50 for referring a landlord to a property management firm, unlicensed. That's a "finder's fee".

The comissions of $1,500+ start coming when you have a license.

 

[JustAskBenWhy]

They don't call real estate market inefficient for no good reason - it's freaking off its' rocker...lol

I've stopped trying to figure it out. The only way I've ever gotten a deal was to rescue a distressed owner - nothing has changed. The market is overbought if you buy retail. I'd rather sit than pay too much - people have burned this way!

 

[IrishSpring600]

They don't call real estate market inefficient for no good reason - it's freaking off its' rocker...lol

I've stopped trying to figure it out. The only way I've ever gotten a deal was to rescue a distressed owner - nothing has changed. The market is overbought if you buy retail. I'd rather sit than pay too much - people have burned this way!

Just buy residential.

 

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[JustAskBenWhy]

Just buy residential.

I buy apartments. SFRs are scary...

 

[IrishSpring600]

I buy apartments. SFRs are scary...

How so?

 

[MKHB]

They don't call real estate market inefficient for no good reason - it's freaking off its' rocker...lol

I've stopped trying to figure it out. The only way I've ever gotten a deal was to rescue a distressed owner - nothing has changed. The market is overbought if you buy retail. I'd rather sit than pay too much - people have burned this way!

You are a wise man, my guess is this aint your first rodeo.

I don't know much about MF or SFR, but from an outsiders view it seems to have quite a run as of late.

Don't know which way the CRE market will end up, but one thing is sure, there will be a significant amount of churn and plenty of opportunity for the pick and shovel sellers (brokers).

 

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[Lukebrisbane]

I'm a mortgage broker and want to develop relationships with commercial developers for referrals or just to be mentored so I can one day develop myself, how would i approach them?

 

[theag]

Just buy residential.

Whats your experience investing in residential RE?

 

[JustAskBenWhy]

How so?

Too volatile in terms of CF in the Mid-West, with not enough appreciation.

 

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[SteveO]

Too volatile in terms of CF in the Mid-West, with not enough appreciation.

Ben,
You are getting lazy on us.

Real estate investing is very complicated. What works in the west or south may not work in the midwest or northwest. There are few general statements that can be made.

But when it comes to single family, you must either be able to time the markets or buy well below value. The typical landlord that buys and rents for a few dollars of profit a month will be eaten up in the long term by capital improvements. You cannot escape this unless you see appreciation or rent growth.

Some areas lend themselves to growth better than others but there are no guarantees.

I feel like apartments lend themselves to more ups and downs in these cycles. They are also more predictable. Then to top it off, more people screw up the operations on these and end up selling them as a distressed asset.

Then you also have economies of scale. I don't want to take a project on if there is not 200K or more of profit to be made. That is harder to do with single family.

 

[JustAskBenWhy]

Ben,
You are getting lazy on us.

Real estate investing is very complicated. What works in the west or south may not work in the midwest or northwest. There are few general statements that can be made.

But when it comes to single family, you must either be able to time the markets or buy well below value. The typical landlord that buys and rents for a few dollars of profit a month will be eaten up in the long term by capital improvements. You cannot escape this unless you see appreciation or rent growth.

Some areas lend themselves to growth better than others but there are no guarantees.

I feel like apartments lend themselves to more ups and downs in these cycles. They are also more predictable. Then to top it off, more people screw up the operations on these and end up selling them as a distressed asset.

Then you also have economies of scale. I don't want to take a project on if there is not 200K or more of profit to be made. That is harder to do with single family.

I agree with everything you said, except for one thing:

I am not only lazy, but bored too! I get OMs in email and I still look at them. But, everything I've ever bought that turned out any good has been a function of relationships. For me, right now, buying is inherently more risky than not buying. So, I will only take action on something that makes so much sense that I can't let it go. The marginal stuff - not interested

Funny thing is - I still see small deals that 5 years ago I would have jumped on. But, I can't get the same financing I got 5 years ago. And besides, the impact of smaller deals is just too marginal. The result - Ben is bored...what to do?