The Best Commercial Real Estate Asset To Own Lease Maintain And Manage

[00:00:00] This week's listener of the week is Dream Team Real Estate. Dream Team, DM us your mailing address. And for all of you listening, if you leave us a five star review, you might be next week's listener of the week, week, week. One of my favorite parts about working in commercial real estate is learning from those older than me and more experienced their avenues of investing.

And I had this client for years. He recently passed. And I sat down to lunch with him before he passed, and he told me his story. This gentleman was a war hero, this gentleman was a whippin business man, and he loved his family more than anything. The only thing he wanted to do with his real estate was support his family, which he certainly continues to do

[00:01:00] to this day, even though he's no longer with us. Now, he bought this warehouse. We'll say it's 10, 000 square feet for round numbers here in Denver in the eighties. He bought it for around 30, 000. And what he was doing with the warehouse was housing his business. Like I said, he was a really savvy businessman and he had a strong business.

He bought the property, put the business in the property, and eventually sold the company. And when he sold the company, he leased his warehouse back to the company who had bought the business from him. This term is called a sale leaseback. It can be very common when selling a business where within the sale of the property, there is a simultaneous deal going on with a lease for the property by the [00:02:00] folks who are buying the business.

So this gentleman had sold the business and leased the property to the new tenant whom he had sold the business to and for all intents and purposes collected a check for about 10, 000 every month until the day he died. Running this property for this gentleman, he had to move out of state, and so he needed a property manager, which is where I came in.

And running this property for this gentleman, understanding the numbers, I really... got a clue into hands down the best commercial real estate or real estate asset in general to own, lease, manage and maintain. Like this was a dream for all parties involved. And the reason it was a dream is because there are so many advantages to [00:03:00] owning commercial real estate that I like to say it's just hidden in plain sight.

Like people do not know or understand how much easier commercial real estate is and we're going to get into that. But, you know, everybody thinks I buy a house, I save up for my next house. This is perfect. I'm going to buy another house and I'm going to rent out the previous house. But what they don't realize is the liability, what they're really taking on, and what they're taking on is so much more than this passive income dream.

Residential real estate is not passive. It is 24 7. And while I was managing this property, I actually got to learn what passive income meant and looked like. And it was [00:04:00] owning and managing this warehouse. Now, look, you might have not expanded your real estate portfolio into commercial real estate yet, and that's okay.

You're in the right place, you're learning, you're educating yourself. On this episode, you're finding out the absolute best commercial real estate asset to own, lease, manage, and maintain. And you're already making Mega strides because you have probably realized at this point that commercial real estate is easier on the landlord, has far better hours, has far less expenses to the landlord than residential real estate, is more so based in logic as opposed to emotions, and ultimately, I want you to think back to 2020 when the federal [00:05:00] government placed an eviction moratorium on residential real estate only.

So your local government entities are very, very protective of residential. Less so of commercial, which is really interesting. So it's normal to think this it's okay because until very recently commercial real estate has been heavily, heavily gatekept. And this was all very intentional. You always hear that commercial real estate is you can't get in unless you have a family member, or you know someone, or you're rich.

And yes, that used to be the case. And yes, that is all intentional. Why was that intentional? Because the gatekeepers? It was way more convenient to only give information to their family and their friends and the people who give them money as opposed to doing what you and I are doing today, which is sharing the [00:06:00] information on the Internet. Period, point blank, a new horizon of commercial real estate is among us and you and I are in the front seat and it is going to change a lot of people's lives who both own commercial real estate and never even knew it was a possibility.

In the first place, so the gates are officially open and as you know, if you're here and you know me, I am obsessed with sharing all the secrets and strategies of commercial real estate with you because it's time to level the playing field. So the best commercial real estate asset to own, lease, manage and maintain, in my opinion, is warehousing.

Day in and day out. Yes, the buildings are amazing, but if you can get your hands on an industrial storage yard, it's literally the easiest asset class to manage and maintain. But they all come, you know Industrial storage, warehousing in [00:07:00] general. They're all under the umbrella of what is industrial real estate, right?

Shipping, logistics, storage. These are big boxes my friends. These are boxes with garage doors It doesn't get much more simple than that So what I want to challenge you to do, because a lot of people don't even realize... Warehouses exist, are necessary, that maybe you drive by them, but if you look around in your house, every single inanimate object was once in a warehouse, right?

And societally, we are depending so heavily on Warehousing, because we live in a world of two hour delivery. That the increased need for warehousing is actually something we currently as a nation cannot support, which is essentially why warehouses are sold out for the rest of the year and next year. But, that's a topic for another episode.[00:08:00] 

What you can do, your actionable steps towards grabbing the best asset to own, lease, manage and maintain is to literally start looking at the warehouses. Then start looking at the numbers online, pull up loop net, pull up CREXI, pull up COSTAR, the free ones. If you're ready to buy, call a broker, have the broker send you information from COSTAR, right?

Start to learn the game because if you deploy, we'll say for round numbers, that 10, 000 square foot building. We'll say for round numbers was 2 million, okay? And it was paying 10, 000 a month. How many residential residents would you need for a 2 million dollar property to make that income? And then [00:09:00] what are the headaches associated with that?

What happens when the disposal goes out? No disposals in a warehouse. What happens when the heat goes out on Christmas Eve at 10 pm? That has to be addressed immediately. That doesn't happen in a warehouse. Nobody's in a warehouse at 10 PM on Christmas. These are things that you might have never thought about, or maybe you have thought about it, and this is just reassuring what you already knew.

Although I'm not a financial advisor and this is not financial advice, I'm very excited to share with you here on episode 20 of Commercial Real Estate Secrets, the best commercial real estate asset to own, lease, manage, and maintain if you truly want financial freedom and passive income is industrial real estate.

Period, point blank. So what questions do you have for me? DM me at @avivarealestate or leave a comment [00:10:00] wherever we are. If you want to get started in commercial real estate, I have a free guide in my show notes. It's a really dense document I'm super proud of and normally this is when I tell you what's up next episode on the pod, but this is the end of season two.

Thank you for listening. We'll be back with season three next week. I just haven't written it yet. Thank you so much for two amazing seasons and we'll see you next week.