Episode 137 - Maximizing Profits with Ground Leases: The Million Dollar Strategy Explained

Then, you know, you need to get $60,000 in ground rent, uh in order to be able to place that $60,000 ground rent on the market and someone, uh, you're gonna offer out a six cap, someone's gonna pay you a million dollars for that ground lease. So that's how you get a million dollars for your piece of land where you may not have, uh, you may not get that million dollars for a while by sitting there waiting for someone to come buy it for a million. But if you can get that, that, that uh Dunkin Donuts lease, well, now you can sell it like that as soon as they're on and that income stream is there someone's gonna pay you a million for that. What is up and welcome back to how to invest in commercial real estate. And we have an awesome show today before we get into it. We're gonna, we're gonna do a quick update which I like. It feels like it's been a minute since we've recorded an episode. Yeah, I mean, it hasn't, we just, we kind of booked a couple in advance so you guys could go out of it on vacation and we help me. Yeah, Braden, you were in Aspen. I was in Aspen. That was a ton of fun and I was in uh Mexico. I'm tanner than you guys. I did notice that a little bit of tan. This guy got a free room upgrade. Yeah, that was sweet. That was literally, that was ridiculous.

Yeah. But anyway, um this year and, and really kind of the last couple of months has been insane um in, in terms of deal flow and I I know for like the last four months we've been working on a lot of land acquisitions to do um several developments which are coming up. I know we've got a learning experience in Burleson coming up. I know we're about to break ground on our learning experience in Princeton. We have a learning experience in Riverside. So those three, we've got um a black bear diner in a Costa Vita in Fort Worth that we're building and then another little strip center in Owosso that we're building. So on the development side, what is that? Five developments probably gonna launch in the first quarter all but we got, we got one closing tomorrow, one closing tomorrow. Yeah, that's the Calloway's Nursery in Houston. Uh We were supposed to close on that last month but a lender literally re traded us at the closing table. Um So we were just like screw you guys. We'll find another. I hate that by the way, like at the closing table, that's a one way ticket for me to never use at all.

Yeah. And they were basically like, hey, we'll close today, but we'll fund after you meet these conditions and we were just like, yeah, pass, we'll find somebody else. So we did. So we're closing that today or tomorrow. Feel really good about that. Um February 8th is the Jacksonville Starbucks build the Suit. Um That one got delayed for very similar reasons, you know, credit union kind of kicking it around, but we have full loan approval on that. So we are closing on that February 8th. Um Both of those deals have already been fundraising if you're involved on both of those deals, be out, um be on the lookout for some information. We'll send an an announcement out when we close and everything like that. Um But yeah, so two closings coming up in the next week, right? We've got five developments that we're gonna be funding all, you know, plus or minus a million dollar equity raise. Um Those will come out, I mean, in the next 6 to 8 weeks, we'll start launching deals super exciting. Um Those million dollar checks typically sell out very fast. Um As always, if you're on the sidelines and listening right now and saying, hey, how do I get involved in the next criteria development deal? Don't wait until shoot us an email.

We'll get you on the waiting list. Yeah, we, we'll plug you in before we even launch it just to make sure we get you a spot. So um send us that information now. Um but some exciting news for 2024 is we're seeing a little bit of transition in our strategy back to cash flowing assets and we're super excited about those. We've got a huge gas station deal. That'll be a massive equity raise. That'll, that'll take all hands on deck to get done. And then we have three or four shopping centers that we are about to get under contract. And you may say, well, well, you guys didn't buy many shopping centers last year. You did a bunch of development deals. Why are you doing shopping centers now? And so I just wanted to give a little bit of color on that, you know, like we've talked about, we used to buy around 8, 8.5 cap. We get debt at four. That spread allowed us to get all the returns, the investors needed to invest with us. Uh But as rates went from 4 to 7, now, those 8, 8.5 cap rate deals are not really a great deal to get the cash on cash yields we wanted. So uh over the last year though sellers, there would be a seller here that needs to sell a seller, there needs to sell and it starts to push those cap rates up.

So now, those same 8, 8.5 cap deals are now 9, 9.5, even pushing 10 and, and guys, these are the same properties we were offering on, uh, nine months ago. Some of them. Right. And they've still sat in the market and we're getting the calls. Hey, uh, do you remember that shopping center? Are you still interested at all? And where, what we didn't want to do before is, is buy at an eight and 8.5 cap, borrow at a 6.5 7 because we didn't actually know where rates were going. And if rates keep going up, that means the value of the properties in the short term is gonna go down. Uh, and so what we've got a situation now is we think prices have come down, meaning the cap rates have gone up. Uh, but we think rates have stabilized. So now we don't think there's any more rate increases in the near future, which will not devalue the properties further. But we do see, uh, in, in this year, probably 2 to 4 different rate cuts by the feds. So those rates coming back down are gonna start pushing prices back up. So we wanna make sure we're in front of that curve, right? And we, you know, normally we get debt that we can pay off whenever we want.

And so we're, we're gonna buy it 9, 9.5 cap maybe 10 cap, put 6.5 cap debt on it. So there's still a spread and we think we can still cash flow. But as the rates come down over the next year to two, right, we can refinance and then we're really gonna be in the money. So that's why you're seeing a slight shift in our strategy with some of these existing shopping centers. I would say there's also a big common theme. I mean, the refi is not the only value we're adding. I would say there's a big theme of us buying out parcels or properties with excess land or properties with existing out parcels and, and we think we can split those off very fast even in, in today's market right to reduce our basis and the remaining um space similar to what we did on the Plaza West Deal, right, where we can return a portion of the equity or all of the equity and keep, you know, 50 or 100,000 square feet. Um A lot of these properties we're looking at have that possibility. So you said out parcels, so are any of those out parcels on ground leases? Um some of them are on ground leases but, but before we get into that, there's right, several deals.

So we have one, 123, we have four deals that will be in contract in the next week or two, right? Four deals each that have an equity raise of a million, 5 to 3.5 million. And what kind of deals are those? For instance, specific names maybe, but multi-tenant shopping centers and decent locations. A lot of them with out parcels, which I love, I think, I think it's important to say that we don't, our strategy isn't to buy now and then hope that the interest rates are going down. We're buying quality projects right now that pay and have a high iir right now as they are. Yeah, it's, it's also a very interesting note. A lot of times we're doing um 506 B I think it's 506 B, right? We can take non accredited and accredited, but we just can't advertise it. Right. That's why we can only offer these investments to our investor list, which if you're not on the investor list, go to the website hit, join our investor list, sign up for that. That's how you get these offerings. But we have so many deals under contract right now because we've been approached by so many equity brokers saying, hey, Kim and I raise equity for you guys, can I help fund your deals?

Yada, yada, yada and our deals have just been selling out so fast. We haven't had enough deal flow. So we're going after a ton of deals right now. A ton of deals. If everything closes that we're looking at just in the first quarter, we'll raise right about $20 million right. 20 million. That's crazy. And I want to take a second just to give a shout out to our Fort Worth office and Andy, who is uh doing an awesome job, both finding uh equity sources, but also uh helping the deal flow pipeline. So he's doing an amazing job. He can't always be here on the podcast with us, but he's a big part of what we're doing. Yeah. So, and, and abs, absolutely Andy and, and, and Russell both and a lot of our joint venture partnerships, a lot of these seeds that we planted over the past couple of years are, are really, you know, becoming amazing. Um But anyway, because we're doing so much, so many deals, so much deal flow, we're raising so much capital. Uh The next few offerings might be accredited only because we're starting to advertise some of these deals. So, like the um the gas stations we're acquiring, that's a $12 million equity raise. So 99% sure that we'll advertise that one and you'll have to be an accredited investor uh to do that.

And, and all that means is you have to say you're an accredited investor, right? You fill out a form if a check box uh is applicable to you. I I'm not sure. Actually, they can just say they're accredited, there has to be some due diligence on our side. They're allowed to self accredit themselves under 506. It's a fact anyway. So just know if, if you're in and you see you are not a credit investor, you may not be in that offering. But like I said, we have so many deals, there will definitely be one open for non accredited investors. Uh So don't worry, you're not gonna be excluded. There's plenty of deals coming up, deals coming up, so many deals coming up anyway, we are super busy. We're gonna have an amazing first quarter. We're gonna have an amazing second quarter. We've got a ton of developments that we funded last year that are starting to finish up. I know we're getting Lois on some of the developments that are on the market, so be on the lookout for more information on those forthcoming. But without further ado today's topic is ground leases all about ground leases. Why people ground lease um and kind of more information on ground leases because it can be confusing.

It was confusing me before I got in before I got in. We've only, we've only done a couple right. Uh Salad and go and Owosso. Is that right? Yeah, we've done uh a salad and go and Owosso, we've done a salad and go and seven brew in Princeton. We've done a couple in Wichita. We, yeah, we did one in Burleson to Hawaiian brothers, I believe. Um Yeah, Wendy's Wichita. Um Yeah, a decent amount. So Brian in essence, what is a ground lease? A ground lease would be uh an agreement between a, a landowner and a developer where the uh developer uh agrees to pay a certain uh rent to the landowner to make improvements on the land. Yeah, I mean, I think it's even more broad than, than you don't have to be a developer. Literally a land lease can be for any use. Now, in the terms of what we're talking about, we're, yeah, we're thinking commercial real estate and retail real estate. So yeah, most likely it would be a big retailer or a developer. Yeah, but there's, there's hunting, uh, land leases right where you have the right to go on and hunt on the land.

There's, there's farming land leases where you have the right to put cattle on there, you have the right to hate land. So mobile homes the right to put your mobile home on, on 100 percent. So there's, there's leases for land for a variety of things and just like most leases or, or purchase contracts, you can restrict them, um, any number of ways in, in that lease like, hey, I'll lease this land to, to shoot deer. Hey, I'll lease this land to, to put a shack that sells salads or coffee or, or whatever that is. Yeah, it's just like the retail shopping students we have when a, when a tenant comes to me and they say, hey, I wanna sell smoothies that does not, I mean, they get the right to sell furniture. We, we restrict the use for retailers just like you can restrict uh the use of the land when you're providing a land lease. So would you actually put that in the lease that you're really only allowed to smell, sell smoothies? Only if you're smart, you would do that. Otherwise you open yourself up to not know what's gonna happen. It can do anything with that. You always want to restrict the use uh because it gives you as the landlord more flexibility and the tenant less flexibility.

Yeah, you can put it in um the deed as well. You can put a deed restriction on there. You can, you can really restrict it. I know at our property at 96 and Garnett we're doing several developments there. Um Dunkin Donuts is like a block down the road and they have an exclusive use for coffee for the entire all of the commercial land around it, which is not uncommon, which means they were early in the process. They were early and they paid a hefty rent to be able to, to get that exclusive and retailers like this aren't, you know, they've been known to sell these exclusives right to another user. So Starbucks could come a few years down the road and say, hey Duncan, you know, I'll pay you a quarter of a million dollars if you drop that exclusive and let me, you know, go over here and they still have to do a deal with the landowner, they're just paying off the exclusive. Right. So, it's very interesting. Yeah, it's smart for Duncan to do that. It's not so, really, not so smart for the, uh, you know, for the landowner to do that. He's really limiting himself and he wants to, and Duncan, you say they can sell that to Starbucks later. Uh, because, you know, they're probably gonna both be able to coexist on that same corner.

Uh But that's, that's something the landlord could have made additional money on. But he gave that right up. When he gave that exclusive, it's all leverage, right? He either got more money for it or nobody was looking at it and Duncan was the only one. I mean, there's something there but retailers are gonna ask for everything, right? And if you don't know to say no or at least try, I mean, so that's what I was gonna ask, what are the reasons that uh a landowner would do a ground lease instead of selling it? And what are the reasons that the developer would not buy the dirt? Let's say we'll start with the landowner, I suppose. Yeah. The first one is they're not a seller, right? Think about how many people you'd know like there's a guy locally, uh you know, Bump Garner, that guy doesn't sell anything. He's never sold anything. He'll ground lease the shit out of a ton of stuff. He'll develop some stuff, but he he's just like, I don't know if he's ever sold something in Tulsa. Right. So there's people who are just not sellers, they're real estate collectors. They're gonna pass it down generations and generations, whatever it is, it's an amazing piece of land. They're never gonna sell it. Think of Utica Square thing's never going to be sold as an owner.

I think it's a great option because what you get to do is you get to make money off the land. But while you own the land, just like any other commercial real estate, you get the benefit of appreciation over time. Uh And so, uh you know, you have this land, it's in a great location and you can sell it for 2 million dollars, but you know, 30 years from now that could be worth $6 million. And so the ground lease allows you to monetize that value today, but also retain the value for the future. Uh And so that's a huge benefit in addition, uh depending on the ground lease is that if you ground lease it and they put some awesome building on it, uh You, you limit the time they get to have that ground lease when that ground lease expires, all those improvements, stay with the land. So if they're going to put something that is valuable or increase the value the land because of the building, they're going to put on it, then you've increased the value of your land. While getting income. So there's a lot of benefits for a landlord. So go ahead, it's not taxable, right? So like the rent you get is taxable, but it's, it's, you know, maybe 57 to 8% of what you would get on a sale price. So you're paying the taxes over a longer period of time.

Um Once the tenant goes in and you have that lease, you have the ability to leverage it up, right? Because of that lease and the improvements of the tenant and the cash flow that it's producing that could, you could leverage it up and, and pull out the money tax free that the sale would produce anyway. And then reinvest that money. Right. That's an amazing pro um, for the landowner. Yeah, renting land seems, or leasing land seems really easy, right? Compared to leasing your, your house or something like that. I mean, there's, there's almost nothing that you have to do right to land and let let. Ok, so, not always. Right. I've seen a ton of ground leases. Sometimes this turn, hey, I'll take it as is, sometimes it's uh pour all my concrete, put the landscape in, deliver utilities, stub it up to the pad. Sometimes it's just grade the site. There's a, there's a lot of different types. Um, and when you look at that, you said easy and I think that's the big word here when you're looking at a build a suit or, or some of these other options for a tenant to come in. There's risk associated with that because they may want you to invest $5 million in a building that they want leased back to them. Right? A piece of land that you already own and you're not doing anything to it or you're getting a dozer out there and scraping the grass and making it level.

That's a substantially less risky position to be in than building you a building. Hoping you pay for it like the rent, you're gonna have to pay me for a building is just obviously more than just the land. So if you're a landlord and you're saying, hey, I'm just gonna lease the ground and they have to spend all the money on the building easy and, and virtually risk free for the landowner. But then what Brin was mentioning and we'll describe what is a build a suit. Well, it's when uh let's say a retailer says, hey, I'll lease the ground for a higher number, but you have to build me the building that I want cost wise. Now, of course, as the owner of that ground lease, eventually you'll get that building back. But if you, if you spend $2 million building them a building and then they default on that lease, you just spent $2 million and you're not getting any rent until you can lease it, ok? Under that idea. So the ground lease and the building lease are all tied up together and you're leasing it for one amount or you're leasing the land and then they, they get a loan and they pay you back for the building. What, how does that work? They're separate, separate. Not necessarily, um, well, if it's a build to suit, it's all tied in.

Right? Like if you're doing a build to suit, it's, it's one number on building a building on the land. You, you pay to rent the building on the land. If it's a land lease, then you're just paying me for the land. You worry about the building a lot of the times the tenant will finance that as well or build it in cash and then finance it after it's done, there's, there's various number of ways they could do it. But the general idea is on a land lease, they're doing everything improvements wise or 90% of it, improvements wise. Once they have the land, right, a bill to sue, you're, you're doing all of the improvements and then you're leasing back all of the improvements on the land to them. Is that, did that answer the question? So, um I talk about what's beneficial for the landlord. I was gonna say, what's the benefit for the developer or the or the tenant? Why would they want to lease land instead of instead of buying the land? Well, several reasons go ahead. Yeah, very similar to the owner, not having a taxable event for millions of dollars and just getting a portion of that, they're not having to outlay millions of dollars to pay you for the land. They're just paying a small portion every single year in exchange to lease that. Right.

And then typically they're handling their own, they're handling their own improvements and they're leveraging those as well. Right. They'll go get a loan from a bank to build the building, um, on top of the ground lease that they're paying us. Yeah. So, uh to be more specific, let's say you're a retailer and you want to be at this prime location and the, the land is really expensive. Well, uh ok, if you buy that land, let's say it's a $2 million piece of land, you may get a 60 70% loan on that land. So now you gotta come up with 30% 40% $600,000 to buy that. Well, companies that are in rapid like Dunkin and Starbucks and they're trying to open thousands of stores worldwide. And so each time they have to put that much money down means they can't open another store and, and their stock price depends on how many stores they can produce and how much revenue they can generate from those. And so they really don't want to put out any money. And so the best way for them to do that is to lease the ground, uh that way they're out. No, money on the land. And then they, they, they get, uh, they get a loan on the building and usually if you, if the land is already taken care of they can almost get 100% financing on that building.

And now they're almost in no money and they can open these stores without any outlay of money. Yeah. So, let's talk about a Starbucks, right. Big round number of Starbucks is a million, half 2 million bucks for the, for the improvements, not the land. So when you think about that, that Starbucks has hundreds and thousands, I mean, hundreds or like thousands and thousands of locations, they have tons of locations, right? If they had a million and a half on their balance sheet for every single location, the amount of equity they would need to grow would be huge. It would be absolutely massive, right? And also when you look at the margins of these retailers, right? Like a chicken place, a smoothie place, a coffee place, whatever it is, they're trying to get, you know, 20 30% plus, uh net margin on, on their volume, their sales, right, their revenue. We're not getting that in real estate. We're not getting that as, as real estate investors typically by owning the real estate, you know, on leverage, that thing's making six or 7% in cash, they're making triple that by selling coffee, chicken smoothies, haircuts, whatever it is. So it, it's not a good business decision for these people that own real estate.

It's not fast for them to own real estate. You, you see it in companies that just wanna be super safe. Either that or that are massive, right? Like Target Target owns a lot of real estate, right. Walmart owns a lot of real estate. But I've, I've seen, I've seen a Target, I've seen a Home Depot on a ground lease. Oh, for sure. 100%. And another benefit for these, for these uh big retailers is uh you can't depreciate the land, more money they have tied up in non appreciable assets, increases the taxes, they have to pay on their profits and once they pay those taxes, they can never get that money back. And so what they want to set up is a situation where they can grow really fast, not outlay cash, use that cash for operations and growth and then get themselves in the best tax position possible. And so by leasing the land that lease payment is 100% deductible uh or you know, able to, to write off against their income, is it harder for? Let's say somebody wants to build a building and they have a land lease. Is it harder to get a loan because you don't own the land, you only own the building?

And what happens if they default on the loan to the bank? Great questions. It, it can be more difficult. Um I think this is where you get into the subordinated versus non subordinated ground leases. It's gonna be deal by deal basis. It's gonna be how the tenant is financing the building, I think on like a salad and go or a seven brew where they're, or a Dutch brothers, right where they're, um, you're delivering a pad with utilities most likely and they're essentially setting a modular building on that. Those are probably non subordinated in the sense that they're not leveraging those up or the, the uh if they are, it's such a little loan balance that they're not worried about getting the entire thing as collateral. I would think the bigger the deal gets or the worse credit the tenant has. That's when you start getting into where they want it subordinated and they want the right to, I guess, be in first position over you as the landowner, which, you know, obviously is not ideal. Um It just comes down to the leverage in the situation, I guess how bad you need that deal and, and what the credit of the tenant looks like. And it's a good question because I'm not sure that I'm educated enough to answer exactly how the loan differs because I've never uh purchased uh a building that was on a ground lease.

Uh You know, it's, it's a much different, much more complicated evaluation to buy a building uh that is on a ground lease and let's say the, you pay $5 million for this, this building that is subject to a ground lease. Uh, so now you're getting, you're getting rent but, uh, you only have 15 years or 10 years left on that, that ground lease. So, when that time's up your building, if they don't extend that ground lease, they take that building, you have nothing. You don't, you don't own the land, you don't own the building, you don't own anything. And so it's, you really have to evaluate exactly uh how to, to maximize profit there. And that, and that's why uh a, a property subject to a ground lease is, is going to be and must be on a higher return profile because at the end of it, you're working your way to zero. where on the flip side, you're buying fee simple where you own the land and the building. Uh at the end uh 10 years, 20 years from now, you still own the land in the building and that has gone up in value due to due to inflation where on a, if you're subject to a ground lease, that may not have any extensions, you're working your way down to a, a property that's worth zero.

Because that landlord, if he doesn't extend that ground lease, he just takes it. And you're talking about, I just want to be clear, you're talking about buying a building that's subject to a ground lease, not buying a garage lease that has a building on it. They're very distinct things. Buying a ground lease that has a building on it is the, is the inverse relationship, right? When that lease expires, you have all of the leverage because you own their improvements. You can just say, hey, pound sand, uh it's double, right or whatever it is. That being said, Brian and I were kind of chatting about this while you were in the bathroom, a salad and go or a seven Brewer or something like that. They're probably penciling in the cost of their improvements over the initial lease term. So they're probably not that like, they're probably not hurting that much. If there's a location right across the street, we see Starbucks do this all the time, like they'll quick trip, you know, we see a lot of these people do it all the time. They'll just move right across the street. Hey, it's a little bit of a better location or it's not a worse location and I can get cheaper rent where, you know, whatever it is. Um, what else? Um, what about, uh, if you, if you own some property, how do you evaluate the lease rate?

Is it just like if you own a multi-tenant property and, and it's based on credit worthiness and location? I mean, is it, is it really similar charge? There's a calculation, let's just say you own an acre of land and you win a million bucks for it. Does that sound good. You win a million bucks out of the acre of land. Somebody says, hey, you know, I wanna, I wanna ground lease this piece of land. You still probably want a million bucks. You're just trying to get a million bucks out of it. But instead of selling a raw piece of land for a million bucks, you're, you're selling a ground lease worth a million bucks. So what you do is you get a broker's opinion of, of value. A bov on what we think a ground lease for that tenant or that creditworthiness would sell for on the open market. And you need to do this before you send a lease because they're gonna tell you, hey, if you get it around this rent or if the total cost is this much, um, or the credit worthiness or the lease term, all of these things are big things, um, when you're negotiating it, but they'll say, hey, if you get a, a 15 year lease and $100,000 I can sell that for a six cap, right? So then you just go to your calculator already did it 60,000 bucks on a six cap, son of a gun.

60,000 bucks. That's good. Um, wait, 100,000 dollars, 60,000 divided by a six cap is a million bucks, $60,000 is on a six cap if you want a million dollars for that. And you've got, let's say, uh, a Dunkin donuts, uh, and they're, and they're selling on a six cap on the open market, then, you know, you need to get $60,000 in ground rent, uh, in order to be able to place that $60,000 grounder on the market and someone, uh, you're gonna offer out a six cap. Someone's gonna pay you a million dollars for that ground lease. So that's how you get a million dollars for your piece of land where you may not have uh you may not get that million dollars for a while by sitting there waiting for someone to come buy it for a million. But if you can get that, that, that uh Dunkin Donuts lease, well, now you can sell it like that as soon as they're on. And that income stream is there someone's gonna pay you a million for that because they didn't buy a piece of land. I want to make that clear. They bought a piece of revenue and they got a piece of land for free, right? That, that's how they're looking at this. And um man, there was something else I was gonna say and, and forgot about it. Oh, another pro right is a lot of the times the value on the open market from the lease is worth more than the raw land.

So don't sell yourself short if you win a million dollars for a piece of raw land, that may be a million five for that ground lease, right? You, you, you're playing the game, right? And if you have a piece of land that you're interested in ground leasing, you see ground leases next to you, call, call brokers, ask about rates. Hey, how mu how much are you paying for this? What did you get this deal done at? I mean, I think people forget to negotiate sometimes and just think like, oh my God, I get an lo I from Chipotle. I have to take it. You don't. Yeah, you gotta evaluate all the options and we, we have a piece of land on the market right now that we're trying to get a ground lease on and we haven't done that yet, but just going back to the Vegas example where I had this piece of parking lot and we could have sold the piece of parking lot for maybe a half a million. It was less. It was like a half an acre. See now he said it's half an acre. Freaking. No. Last time I said it was half an acre. You're like, oh no, it's acre. We're gonna pull this shit up and overdub it. Now. He said it's half an acre. It's definitely an acre. I know now, I don't know what it is, but in any event, uh, we probably could have gotten $20 a foot for whatever size it was. Ok. And, uh, we got Dutch Brothers on the hook on a, on a 10 or 15 year lease at 65,000 bucks.

And the great thing about that is they're pretty hot in the market out there. And so we didn't sell it for a six. We sold it for like a four and a quarter or, uh, and so 65,000 divided by a 0.0425 is 1.529 million. So literally 20 bucks a foot on an acre is 871,000. So it's almost double. So we almost sold it for uh $40 a foot all because we did, we did a little bit of extra work, got a great credit tenant on there with some ground lease rent and now boom, we got double the amount that we could have just sold the raw land for. That's the power of a ground lease. So I just love them because they're super easy. They're way easier than to build, to suit. You don't have to build them anything. You don't have to vet construction companies. You don't have to draw a building. You don't have to, it's just so much easier to sell a ground lease uh to build a like everything about a ground lease is easier initially from my experience. Yeah. So, you know, I know we, there's a lot of nuances we didn't cover with regards to a ground lease. Uh but, you know, we're already pushing, you know, kind of a uh the limit for what we like to put on the show.

So if you have questions about ground leases, you can email us and we'll help you find the answers, we may not know them or you can use the internet and find the answers yourself. Uh There's a ton of information online, but it is an effective tool uh to selling real estate or to maximizing the value of that real estate. Um So if you own a piece of land, if you think you have access to a piece of land and you want to explore that ground lease might be a good option for you. Yeah, and, and just to circle back, right? Like we've got nine, I think nine or 10 deals literally uh you know, under contract that we're trying to find that will all that should all close this quarter, right? So 10, 3 months, I mean, we're already done with the first month. So I mean the next 90 days is gonna be insane if you're not on the investor list join now, if you are on the investor list, watch your email, there's gonna be deals popping out. Don't give FOMO, there's gonna be way there's gonna be a ton of deals, right? We're gonna get everyone involved if you've got friends that want to get involved. Now is the time colleagues now is the time. So yeah, we're excited a lot of deal flow. Alright guys, thanks until next time. See you.

How to invest commercial real estate.