Welcome to the Commercial Real Estate Show! Today’s episode is packed with insights that could help you make millions in real estate. From essential terminology to understanding traffic counts, we’re diving deep into the elements you need to know. Let’s get started!
Agenda for Today’s Show
- The Four T’s of Commercial Real Estate
- Importance of Traffic Counts
- Understanding TCEQ and TxDOT
- Strategies to Make Millions in Real Estate
A big shout-out to our sponsors who make the Commercial Real Estate Show possible:
- Noble Mortgage and Investments
- Match Keep Tracing
- Think Multifamily
- Creative Casual Calm
- Life in Her
Catching Up with Shelby
Discussing Shelby’s Week in Real Estate
Shelby’s had an exciting week. She attended the Berkshire Hathaway shareholders meeting in Omaha, Nebraska, which was a remarkable experience. With an estimated 40,000 attendees from around the globe, the event provided an extraordinary networking opportunity. Shelby, a Berkshire Hathaway shareholder herself, met key industry figures such as the CEO of Clayton Homes and even Tim Cook, CEO of Apple.
Importance of Sending Thank-You Cards
One thing we can’t stress enough in real estate is the importance of follow-up. Sending handwritten thank-you cards can make you memorable. Keep some handy in your car, fill them out after meetings, and mail them immediately. People appreciate the personal touch that comes with handwritten notes.
Mentoring Shelby
Encouraging Viewers to Take Action
Viewers have reached out from places like Georgia and Brooklyn, taking actionable steps inspired by Shelby’s journey. They’ve identified properties, made offers, and are well on their way to building their real estate portfolios. It’s proof that learning without action is incomplete. So get out there, identify opportunities, and make those offers!
A pro forma is a crucial tool for real estate investment. It helps you project the financial performance of a property. For example, if you’re eyeing a property worth $350,000 with expected annual rents of $60,000, your pro forma will detail expenses, revenues, and potential profits.
Identifying Shelby’s Target Demographic
Knowing your ideal client is pivotal. National retailers, for instance, have specific demographic requirements, often including traffic counts, income levels, and employment figures. Comparing your target demographic with that of successful players like Orange Theory can provide valuable insights.
Commercial Real Estate Terminology
Cap Rate
Cap Rate is the net operating income of a property divided by its price. Aim to buy at a high cap rate and sell at a low cap rate. For example, a property generating $100,000 annually bought for $1 million has a cap rate of 10%.
Triple Net Charges
Triple Net (NNN) leases involve tenants paying for property taxes, building insurance, and common area maintenance, in addition to rent. This can make your investment more predictable.
Double Net
In Double Net (NN) leases, tenants cover property taxes and building insurance, but the landlord takes care of structural elements and the roof.
Letter of Intent (LOI)
An LOI is a non-binding document that outlines the basic terms of a deal before moving to a formal contract. Always include a “non-binding” clause to avoid legal entanglements.
First Right of Refusal
This grants tenants the first opportunity to purchase the property if the landlord decides to sell. This can be a powerful tool for securing future investments.
TxDOT (Texas Department of Transportation)
Importance of TxDOT
TxDOT data is invaluable for real estate investors. It provides information on access drives, road construction, and how they impact property values. Knowing about future road projects can help you make informed purchasing decisions.
TxDOT Website
The TxDOT website offers a project tracker, real estate listings, and traffic counts. For instance, a property on a road with 25,000+ cars daily is more attractive to national tenants.
TCEQ (Texas Commission on Environmental Quality)
Soils Test and Contamination
Conducting a soils test is essential to identify any contamination on your property. For instance, a dry cleaner across the street could be polluting your site. Addressing these issues proactively can save you future headaches.
Brownfields
Brownfields are contaminated sites that can be redeveloped. These sites, like the 72-acre American Airlines area in Dallas, present hidden opportunities. Government grants and tax incentives can make these projects financially viable.
Resources
Visit the TCEQ and EPA websites for detailed information on environmental quality and brownfield opportunities. These platforms provide data, funding options, and more.
Finding Shelby’s Second Location
Using Mapping and Demographics
Mapping tools can help identify prime locations by displaying household incomes, competitor locations, and more. For Shelby, comparing sites of successful fitness centers can guide her to the ideal spot for her second studio.
Identifying Potential Locations
We’ll examine household incomes, traffic counts, and other demographics to pinpoint locations. For example, areas with high-income households, similar to clients at SoulCycle, would be ideal for Shelby.
Visiting Potential Sites
Visiting sites and talking to current tenants will offer practical insights and help Shelby make an informed decision about her second location.
Propelio Event in Grapevine
Join us tonight for the Propelio event in Grapevine. It’s a fantastic networking opportunity for anyone interested in real estate. We hope to see you there!
Recap and Closing
Taking action based on the information and resources available is crucial for success in real estate. Utilize platforms like TxDOT and TCEQ to gain valuable insights. Stay tuned for next week’s episode, where we’ll continue our journey to find Shelby’s second location.
Thank you for tuning in! Don’t forget to subscribe and stay updated with all our latest content. See you next Tuesday at 3 PM for another exciting episode of the Commercial Real Estate Show!
