The Future of Commercial Real Estate Investing in Major Cities with James Nelson

 

The Future of Commercial Real Estate Investing in Major Cities with James Nelson

 

Guest: James Nelson is an industry expert in commercial real estate with over 20 years of experience. He is a Principal and Head of Tri-State Investment Sales at Avison Young, one of the world’s fastest-growing commercial real estate services firms.

 

Big Idea: In this podcast, James Nelson shares valuable insights into investing in commercial real estate in major cities like New York and Chicago. He discusses the challenges and benefits of doing business in these cities, the importance of thorough due diligence, and the potential for value-add opportunities in “tired” assets. Nelson also emphasizes the significance of location in real estate investing and provides guidance on navigating current challenges in the industry, such as the shift towards e-commerce and the need for more flexible office spaces.

 

 

    

 

Dan: So I was going to make a little bit of a perception of the New York real estate market from around the country, right? Oh, it’s overpriced, it’s outrageous. The price of land in Manhattan and those kind of things that we all hear around the country, it’s like, who could ever buy anything in New York, anywhere in the city and be successful at the way the prices are? So that was growing up in Philadelphia, James, so that’s my perception, right? We would get the New York buyers who would come down and see Philadelphia as just like discount bargain just pay cash for it. Who needs a mortgage kind of a market. Well, when I got to Chicago, Chicago had a similar, very priced out type of feel to it coming from Philadelphia. And long behold, it does work and you can’t make money.

Sometimes those high price points offer things like high commissions and high profit spreads and 8,9,10%, or even 3 or 4% appreciation on a larger number is larger numbers at the end of the day as well. So I’ve gotten more comfortable with the higher price points myself personally. And I’m curious, as we kind of get into today’s show, I imagine cut your teeth in the New York market, and it’s a high price point market we all know that. I’m excited to kind of hear today’s show with that frame, if you will.

James: Sure, yeah. New York certainly is a place to live. It is very expensive. So a studio apartment here is $3,000 a month. The median apartment sells for, I think it’s 1,000,00.

Dan: Wow.

James: So yes, it is certainly expensive. When you’re looking to buy here on the commercial side yes, the barriers of entry are high because there is global demand looking to purchase properties here in New York, when we talk commercial, I’m talking multi-family with five or more units. I’m talking retail, office development, industrial, and there’s only about in Manhattan about five or 600 of those sales that happen a year. So there’s always this supply demand imbalance. And so the New York terms here are very challenging, especially for kind of the first time investor because most of our deals are signed with a 10% hard deposit due diligence done prior to contract signing. So that’s pretty daunting to jump in and have to put in hard money day one, really tough when you’re buyer, but when you’re looking to turn around and sell again, the market is liquid. So there are challenges to break into this, but once you’ve been able to secure an investment, if your business plan is to resell, you’re going to have a much easier time exiting when the time is right.

 

This Episode is Also Sponsored by the Lending Home. Lending Home Offers Reliable & Low Cost Fix & Flip Loans with Interest Rates as Low as 6.49%.  Buy & Hold Loans Offered Even Lower.  Get a FREE IPad when you Close Your First Deal by Registering Now at  http://REILineOfCredit.com

 

Resources mentioned in this episode:

https://JamesNelson.com/

 

For Access to Real Estate Deals You Can Buy & Sell for Profit:

https://AccessOffMarketDeals.com/podcast/

 

James & I Discuss:

  • The challenges and benefits of investing in commercial real estate in major cities

  • The importance of thorough due diligence in real estate investing

  • The potential for value-add opportunities in “tired” assets

  • The significance of location in real estate investing

  • Navigating current challenges in the industry, such as the shift towards e-commerce and the need for more flexible office spaces

    

Relevant Episodes: (There are 218 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

Dani Beit-or: Leveraging Repetition and Reinforcement in Real Estate Investments

 

Dani Beit-or: Leveraging Repetition and Reinforcement in Real Estate Investments

 

Guest: Dani is a 20-year real estate investing veteran with extensive experience in the US market. He has collaborated on nearly 5,000 transactions since 2004 and has helped hundreds of investors cultivate robust property portfolios across a variety of metropolitan areas. Dani’s investment strategies have been refined from his experience during the 2008 market downturn, and he now leverages his expertise to help investors at all levels, from novices to seasoned professionals, optimize their real estate investments.

 

Big Idea: Dani Beit-or shares his 20+ years of experience as a real estate investor. He discusses the need to have each property standalone and pay its own expenses, the power of repetition and reinforcement and the kindness of those in the real estate industry in helping one another. Additionally, Dani explains how he uses his real estate investments as a 401K. This podcast is an invaluable source of advice for anyone looking to venture into real estate investing.

 

 

    

Dan: Cool. So I’m here in Chicago, listeners know I’m back from Florida, spent the winter there. It was pretty cool. I wish I was still there because it’s not quite done being winter in Chicago yet. But one of the things most of the listeners probably know, I think we were talking about before the show started, so I buy, sell. Buy, fixi and sell, I own rentals, and I do that in Philadelphia, originally. I moved to Chicago in 2015, so I could be near my daughter who was heading into late middle school at the time. So I was like, oh, it’s now or never. She’s back in Philly now at college. I’m still in Chicago. That’s how I ended up in Chicago. And then I met someone who we opened up the Atlanta market and we did a lot around the country.

And I say all that as kind of a setup, Dani. I never would’ve probably left my backyard in Philadelphia because flipping houses, making money. I know the market, the brand, people know me, they’re bringing me deals, my contractors are there, my money partners are there. And I was afraid that when I left, the whole thing would crumble when we would go away now. And I was okay with that if that happened when I got to Chicago, but grace of God, the business grew and things continued in all three areas. So that was my catalyst for looking around the United States at other real estate markets. And we’re now eight years later and I feel like the thing that’s most exciting to me right now is market selection and paying attention to the nuances of this huge variety of markets throughout the United States.

I guess I need the challenge of having to underwrite new markets. But I think it was really cool because I was able to see a market like Atlanta. Seeing like, let’s say 8% to 10% or 12% appreciation for several years. And then a market like Chicago, which maybe it had 3% or 4% and probably a 10% bump during COVID or something like that and there’s opportunities in each of those markets. But I would imagine for buy and hold investors, and I’ll allow you to encapsulate your business model here in a moment, but for buy and hold investors, I’m getting in getting out in a 12-month period or less. So it doesn’t matter how much the appreciation is unless it’s significantly negative one year. But to a buy-and-hold passive investor probably has another career or has a lot of rental properties. That appreciation component’s going to significantly drive or hinder the total IRR. So with that setup, I’ll pass it to allow you to describe what you do in the evolution of your business model.

 

This Episode is Also Sponsored by the Lending Home. Lending Home Offers Reliable & Low Cost Fix & Flip Loans with Interest Rates as Low as 6.49%.  Buy & Hold Loans Offered Even Lower.  Get a FREE IPad when you Close Your First Deal by Registering Now at  http://REILineOfCredit.com

 

Resources mentioned in this episode:

https://SimplyDoIt.net/

 

For Access to Real Estate Deals You Can Buy & Sell for Profit:

https://AccessOffMarketDeals.com/podcast/

 

Dani & I Discuss:

  • Making each property standalone and pay its own expenses

  • The power of repetition and reinforcement

  • Using real estate investments as a 401K

  • Selecting the Best Markets to Invest-No Matter Where You Live

    

Relevant Episodes: (There are 216 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.