Breaking into Commercial Real Estate Without a Degree: Our Success Story

If you could go do another career, what would it be? Because I think we think that that's off limits for us. Like, oh, if I wanted to switch careers now, I'm 30 I'm, I'm 40. I can't do it. But you know, we're examples of uh learning a whole new industry without college education, without training and being very successful at it and you can do that too. All right, what is up and welcome to how to invest in commercial real estate. We're back. It's been a while. It's been a while too long, man. People are getting busy, man. Summertime, you know, running out of topics to talk about all of it. I know I've had so many people contact me and say, where's that next podcast? Yeah, they're just blowing up your phone. Like three people called him. Well, we, we have been busy. Uh nevertheless, we're buying stuff, buying all kinds of stuff. Um We just closed on a big deal out in Saint Louis. Super excited about that right next to a, a Target. It's got a little two tin out parcel in there with a, a panda Express and a Chipotle. So our plan is to parcel that off and sell that. We think we're gonna get some immediate uh arbitrage there just in, in the value of it separated off from the rest of the big box retail and then we've got another 80,000 square feet of big box retail back there.

Um and it should be a great long term cash flowing investment. Yeah, closed on that last week. And then we've got another deal closing in Amarillo. I think around July 10th here in a couple of weeks. So super excited about that. And then after that, we've got a pretty good size deal down in Houston. Yeah, actually we're a week to due diligence on that one. It is a grocery anchored center in Houston, like you said, um can millions. Yep. So uh ST Louis was uh almost 11. Uh Amarillo is gonna be like five, I think four, maybe four. Amarillo is kind of a piece of shit, but it's close to $30 million. And uh you know, in, in two or three months, let me clarify. Amarillo is a piece of shit. So everybody needs to invest. Dude. I'm just saying, I mean, Emeril is kind of like, no, it's a small cash flow gem. It's one of those, one of those. It is a value add. I mean, it's an older center. It's a little bit of a workforce area of town per, you know, owners haven't taken care of it, but we're getting it at the right price. There's room to raise rents.

We're gonna be fixing the roof, we're gonna be fixing parking lot. We're gonna make this thing into a nice dinner. Yeah. And, and we were just talking about that article I read from Kar national average occupancy of neighborhood retail shopping centers is 95%. So, um, yeah, being able to go into a retail market right where there's good healthy occupancy, there's good thriving business and you can go in and pick up a shopping center at, you know, I think like 50 or $60 per square foot is our basis in this when the cost to develop is hundreds of dollars per square foot. So developers just aren't bringing the, the retail market and there's still a massive demand, which is a really great thing. Yeah, you don't see a lot of strip shopping centers being built around the country right now, right? We're doing it. Yeah, we're doing a few, not, not a ton, but anyway, so we got, we had a lot of stuff going on and uh I don't know today, what are we talking about? Well, today we thought we might talk about how uh knowledge can combat fear. And obviously we're gonna talk about how uh it's the fear of jumping into commercial real estate, how knowledge can help that. Yeah, when we think about topics for the show, we're always trying to think about what an average listener that, that doesn't know anything about commercial real estate is thinking about getting in and what we hear, uh, more often than not is, man, I, I'd love to get into real estate.

I'd love to get into commercial real estate. I, it just seems scary to me. I just don't know that much about it. And, uh, today we wanna kinda, kinda dig into that and like you say, the kind of the topic is knowledge, combats fear. It's something I've been saying for a long time. Fear is, is part of the equation in, in commercial real estate and starting your own business and putting money into any investment. Right? There's gonna be some element of fear but, and we've talked about it a little bit before, uh, you know, how do you combat that fear and experience and knowledge are how you combat it and if you can get, you know, comfortable with the risks and, uh, the unknown, right? It gives you just enough courage to, to follow through with, with getting into the game. And so, uh, I think what we were gonna talk about today though is why is it that, that so many adults kind of had this negative, uh, place this negative value on learning something new. Well, I think a lot, a lot of times it comes down to, they think, well, I don't have a lot of time, right? So I'm not gonna get started. Commercial real estate is complicated.

You know, I think a lot of people, if, if they can just sit in front of their computer and read, uh, one article on a certain topic they're like, oh, I've got 30 minutes or an hour to learn on, you know, to, to teach myself this but it's, it's sort of a dedication. If you wanna learn commercial real estate. I think people know it. Um, but it's, but it's not that difficult. Right. Yeah. I think learning has a negative connotation because people don't associate it to how broad of a term it actually is. Right. And when I think about learning, I think people's most learning that they do out through the graduate school is a hobby. Right. Oh, that, like, right now I'm really into wake surfing behind a, a wake boat on a lake. So, I'm, I'm learning how to do that through doing it. I'm learning how to do it through watching youtube videos, through, watching my friends do it through, like, it's the process of learning. So, for me personally, it's super easy to learn things that I'm interested in doing. So that's, that's a, that's a great step. Right. Like, find something you're interested in and it's less like learning or what you think of as learning, even though it's still learning. Your example is not too much different than what we tell people in real estate is, is jump in now now you gotta get some knowledge first and we've we've kinda had episodes on that but, but just jump in and do it well, you know, I, you know, I, I'd like to add this kind of unique idea that I think a lot of adults maybe struggle with or even, you know, subconsciously struggle with is they, they have such a, a negative pain point with learning new, new things and I think it kinda goes back to, you know, the 1st 8, 1822 years of our lives where you're in high school, you're in college.

And I don't know about the rest of you guys. I was an engineering major but uh you just pummel students, right? We're learning so much in such a short amount of time that it's a burden. I, I'm trying to learn, let's say calculus and I've got to do it in four months in one semester and then I gotta go on to calculus two and then I gotta go to calculus three. And so, you know, that's the problem with, with learning is that we associate it with why I take six courses of subjects that I really don't have any interest in learning. And I gotta, I gotta learn all there is to know about that or most of it in this four or five month window of the semester, you're staying up all night, you're cramming for tests. And so we associate this learning engineering or learning, you know, whatever your degree is, accounting, business with these negative emotions and all this negative stuff. So then when we get our job as an adult, we're, we kind of oh man. Fuck, I can relax, you know, II I can, I'm gonna learn my job but I'm not gonna spend every night till 2 a.m. learning. I'm just taking a break. But the problem is a lot of us never pick it back up. And then when you're presented with like commercial real estate or whatever else, I think a lot of people think, oh man, it's too, it's too complicated.

It's too much because we're, we're associating it with having like learning stuff in college. And the great thing about it as an adult is you have way more than four months to learn whatever it is you want to know, right? You can take three years, OK? You can do it on your own time, you can do it casually, you can pick subjects that you're interested in, you can pick media that you're interested in. Instead of reading a textbook, you can watch youtube videos, you can talk to experts. There's all these ways that we can learn. And uh I find, you know, I, I learned a whole new industry, commercial real estate on the side. Uh But that's because I got onto this concept that I can learn a little bit every day in something I'm interested in and years go by and slowly I become an expert in something that I had no training in. And so anyway, you guys have any thoughts on, on that kind of that kind of concept. Yeah. Yeah. I mean, learning for most people is, is painful. Right. They associate it to a waste of their time. I mean, I remember sitting in Azor thinking, oh, my gosh. I'm never gonna use this, or, like, in calculus. I mean, there's a, there's a lot to that because it was, it was kind of forced upon you. College isn't necessarily forced upon you except by social, you know, peer pressure, I guess.

Or, or your ability to want to succeed or nobody goes to college because they're like, oh, man, I just, I, I'm so excited to go into calculus. Typically it's later on in their major and then when you are, are doing that you're envisioning that career and that career is, you know, uh, uh, a whole life, right? It's a home, it's a financial future, you know, you're envisioning all that. So it makes it more tolerable. And I think that's what it is for me in, in commercial real estate, right? Like securing my financial future and securing my wealth and being able to do, uh, whatever I want with my family, hopefully when I want to do it and be able to be able to provide for them as a hobby. So I enjoy doing things that, that add to that story that add to that, you know, mental picture in my life. So, yeah, nobody's asking you to go learn calculus. That would suck. I wouldn't wanna do that. Nobody really wants to do that. But you've, you've got to find some sort of purpose. I've explained mine and then just go through it and then the other really important thing for me is to not get stuck in the learning phase. And I think a lot on this show, we're talking about actions we're taking and, and how to get in and maybe we're not so focused on the learning.

Learning is super important, but you have to learn how to learn while taking actions. You can't just be stuck in this phase of, of not doing anything and trying to become an expert and know everything because you're not, you're not gonna know everything. You're not gonna become an expert without, without actually doing it. So you've got to find people that you can go into business with where they, they know you're learning and they're, they're willing and eager to teach you, right? Probably because they're making more money than you on the same deal. So that, and you're just, how are we doing this? Why are we doing that way? You're just trying to stay informed, but really you're learning, right? And then eventually you may be able to add more value to the next deal. So you're getting more ownership, you're getting a bigger fee, you're, you're doing property management and leasing where you're, you're finding it, you found the lender, right? All, all of these things are, are helping add more value. But you've got to be at some point, you've got to dive in. Right. And we always talk about that. It's a good point. You gotta find the balance between when you think you have enough knowledge and when you, you want to jump in and, and we've always talked about well, jumping in doesn't have to be all by yourself, right? You've got a team, you can contact us, you can get partners.

Um but that's a good point, right? And you gotta, there's, there's a balance between learning and, and, and doing, we're gonna continue to learn, like you said. So I got an idea here uh that I'll try to articulate, um, you know, you have people that are sitting around and they're saying, man, I'd love to, to do commercial real estate. It looks like super lucrative, you know, but man, it's, it's too hard, it's too much. I want to remind everybody that went to college that you paid probably $100,000 for that degree. And you studied full time for four years to get the job that you have. And, and let's just say that job is accounting and you're making 90 grand a year. Ok? I, I don't know. We're just guessing you paid, you paid 100 grand or even more and you studied full time for four years to get a $90,000 a year job or $100,000 year job. Yes. That first year maybe covers your education. Uh, and, and so when we, when we think about trying to encourage people to learn the real estate game is it's gonna be way more lucrative? Ok.

But is it gonna take time? Yeah. But it's not even gonna take four years full time and, and the learning doesn't even have to cost you anything. I mean, it may cost you, I paid for some of my mistakes but it doesn't have to cost you anything. Most of the information out there is free or in books that cost 1995. Uh and it won't take you four years and at the end of it, right, you may be making 100,000 a year in real estate passively and, and so that's what we wanna encourage people is like, like you were saying you have a vision, you know, you have a reason you have a why what's motivating you? Uh But if you can get a hold of what commercial real estate can do for you, the amount of money and freedom that it can give you, then you're gonna say, OK, I can dedicate, I can dedicate five hours a week to this 30 minutes a day. Uh And over time, if you commit 30 minutes a day to anything uh in, in two years, you're, you're gonna be totally proficient in it. Guys, it's ok to be dumb. Like it's ok to be dumb. You just can't be dumb and proud. Right? So let's, let's dive into that. Right. Like I'm not an attorney, I'm dumb when it comes to legal stuff, I'm getting better.

Right. Because I read a lot of contracts. I read guys, I read a lot of contracts and sometimes I want to bang my head up against the wall, but we're not gonna get into that. What we're gonna focus on is me being dumb in that area. I, I kind of stay up at night. We, we raise a lot of money. I, I've, I've probably personally guaranteed close to $100 million worth of debt. It's a big number. So we sign a lot of documents and I couldn't do that without our attorney. So we, we hire amazing attorneys. There's, there's, there's multiple of them. They look and touch and do everything. We, we sign and raise and, and file. So it's so it's done, right. So we don't have to be attorneys. So we don't have to go to law school. We don't have, we don't have to be experts in it. Right. Like anything. So accounting don't have to do that. We have those people. Yeah, we file taxes. I'm not a CPA. There's no part of me that wants to be a CPA. I can promise you there's no part of you that wants to be a CPA. Just knowing you, Brian, the jury. Brian's basically a rocket scientist. I could see I could be a CPA. Yeah, you kind of look like a CPA. I'm not gonna lie. Thank you. Anyway, a compliment. You, you've got to be able to hire out what you're not comfortable with and, and before you can do that, you've got to be able to say you're not comfortable with it.

You've gotta be able to say, hey, this is over my head. I need to ask for advice. You can email and call us, but eventually you're gonna have something that's over your head and you're gonna have to go in and say, hey, I don't know how this works, right? Like it could be, hey, I'm looking at buying this $5 million shopping center. I know I don't have to buy this thing in cash. What does a loan look like? Right? Do that five times. You're gonna learn way more about commercial real estate lending from those five lenders telling you what they need and your mind's gonna be blown. It's gonna teach you more than any book on commercial real estate lending. Ever. Could I promise you that? And you're gonna feel like an idiot. It might be smart. If someone's thinking about it again, it might be smart to go back and watch our episode on, on partnerships. Remember when we said you need, here's, here's the team you need or the team concept, right? So go back listen to the team that we've assembled and then go, you gotta learn the other stuff, but there, there's a bunch of stuff. We, you don't have to learn that, that we're outsourcing. So you can figure out exactly what it is. You need to learn to start taking those first steps and, you know, it doesn't have to be commercial real estate. Ok. Hopefully this episode while we're talking about it, it gets you interested.

You know, what is it that you want out of this life? You know, what is it? What if you, if you could go do another career, what would it be? Because I think we think that that's off limits for us. Like, oh, if I wanted to switch careers now I'm 30 I'm, I'm 40. I can't do it. But, you know, we're examples of, uh, learning a whole new industry without college education without training and being very successful at it. And you can do that too. But it has to start with, with daily discipline, uh, a little bit a day, uh, forcing yourself to learn. But I promise you, it's not like that learning you did in college where you're trying to learn a hard subject in a matter of weeks or months along with six other hard subjects that you don't even like. This is something that if you find a passion and you decide what you want out of life, you can do it, you can go get it and hopefully it encourages you just to start taking those steps and yeah, you're not gonna do it overnight, but 34 years from now with some dedication, you could be doing anything you wanna be doing doesn't have to be commercial real estate. So questions, questions get answered right? Whether it's from other people or yourself, your mind will go to work answering your own questions.

So I would, I would just challenge you to continue humbly asking questions that, that you're interested in, right? And other people will answer them if you ask them, uh you will try to find the answers yourself. Like I was saying, you just, you have to be able to willingly go out and say, hey, I'm interested in commercial real estate. How do I do this? How would I buy a shopping center like this and talk to a bunch of people about it and it will, you'll learn super easy. So I'm gonna leave you with a thought and uh it's, it's incorporated into something else I've been working on, but you can have exactly what you want out of this life, not what others tell you you can have. So just let that sink in, start like thinking about life on your terms. What do I want out of this life and not what other people tell me I can have and just go for it, man, because life's too short to be doing things you don't want to do. And I know we push commercial real estate because it's given us freedom, but it can be anything that you can put your mind to. So I think it's a famous Will Smith quote that people spend money. They don't have to impress people. They, they don't like, they don't know and don't like, it's just funny.

Anyway. Anyway, uh we actually are shooting another podcast tomorrow, so we will be back next week with another super exciting interview with Kmart. Alright, thanks guys. See you.