Category: Jewels of Wisdom Newsletter

I’ll be in Orlando Jan 31-Feb 2 at this Commercial Academy Mastermind Event. Want to meet me there?

Register Here

Here’s Why I Attend:

• Network: There are more than 100 Commercial Real Estate investors attending-most seek JV Partners who can bring them deals.
• Knowledge: There will be 9 presentations of recent & active projects. There is no other place to get this level of “behind the scenes” details-most CRE investors are highly secretive and NEVER share any of their strategy. I may be one of the 9, I’ll keep you posted. 
• Deal Flow: I own a shopping center, several storage facilities, 2 mobile home parks, and some flex industrial – all deals which discovered at these events.
• Orlando, FL: I love the warm weather this time of year in Florida!!

Register Here

Here’s today’s agenda:

• For Sale – 33 Real Estate Investor Deals 
• For Sale – 3 Warehouse Deals
• Self Storage Investment – 22%-30% IRR Target
• Meet me in Orlando on Jan 31?
• A Major Blind Spot in (CRE)Commercial Real Estate Underwriting

First Time Reading?  Sign Up Here

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Doing a Deal with Diamond Equity

Quick shout out to Rick Panlilio & Stacie Kidwell Sandoval for referring a few deals over this week. APPRECIATE YOU BOTH!

Here’s What I’m Buying:

• Small Bay Industrial 20K sq. ft+
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
• Industrial 8,500 Sq. Ft+ on 3+ Acres
• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Prefer value-add: either low rents OR vacancy, or both
• Prefer that you either Own, or are Direct to the Owner

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Allocation Closing this Friday, January 24, 2025

Last chance to invest in this Self Storage Deal.  If you’d like to invest, or review the investment presentation you can reply to this email or Schedule a Call 

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A Major Blind Spot in CRE Underwriting

Underwriting commercial real estate deals is where the money is made or lost. Underwriting is deciding the price and/or terms you are willing to pay for the risks involved in buying/owning the property. Honestly, I prefer “napkin” underwriting, where I am scribbling the current rents, current expenses, potential rents, capital improvements, etc. on a scrap of paper already full of other notes inhabiting my desk.

Honestly, my desk is always cluttered with 6-12 sheets of notes from my interactions on the phone/zoom daily. I ALWAYS take notes on EVERY call I schedule, no matter the other parties skill level, wealth level, or even my own expectations from that meeting. And I’m always surprised to glean a jewel of wisdom from EVERY call/meeting I join.

This week, with one of my partners in our Commercial Brokerage, Henry Eisenstein, we underwrote two deals live, on video. We will both publish these in a few weeks on our YouTube channels. The Major Blind Spot we highlighted on these examples was the insurance cost. These costs have gone WAY up & that’s assuming you can even find an insurer to “buy” the risk (meaning write the policy)

Insurance Cost is a MAJOR Risk in the Future Profitablity of CRE

When I bought my first 3 large apartment buildings, I didn’t even pay attention to that line item for insurance. I simply moved ahead with the deal and got lucky-that I was able to find insurance for the same cost, or less, than the Seller was paying. I underwrote the deal using the insurance costs provided by the seller and believed them.

Now, many sellers have older policies with lower insured amounts. Once you buy at the new, much higher value, you’ll also be wise to buy insurance at that higher amount. This costs more. Not only that, many of the commercial sellers in today’s marketplace DO NOT EVEN CARRY INSURANCE!! In fact, this IS THE REASON THEY’RE SELLING NOW. 

To be clear, now is NOT the best time to sell commercial real estate because the interest rates are so high. If the rates were to drop, more deals will close at slightly better prices. However, if a seller owns a $2M-$10M property with NO insurance, perhaps NOW IS THE BEST TIME TO SELL.

Why do these Sellers Have NO INSURANCE?

Right now, on the heels of inflation, hurricanes, & wildfires, insurers are paying out large claims. In the process of evaluating the risk they hold (policies they wrote, which they may have to payout), they are either dramatically raising insurance rates (I’ve seen 150%-300% increases issued to renew) OR simply dropping the property altogether, leaving the owner with no option but to go uninsured. Terrible situation for that seller.

I’ve also seen a deal where the Seller made a $500K claim for wind damage and was dropped the following year. I offered $8M on the deal, he wanted $11M. I may have paid more, but when I called my insurance broker to quote the policy, we could not find a single company willing to issue the policy at a price that would make the deal work.

The Insurance Cost is Deducted from Your NOI, Reducing the Value of Your Property

The cost of insurance is an expense, which reduces your NOI & ultimately the actual value of your property. For example, if you’re using an 8% cap rate to value your deal and your insurance cost is $35,000/year HIGHER than you expected, or paid the prior year, that reduces your value by $437,500. If this happens again next year, and the year after that, you might be $1.3M less valuable than you projected. I don’t know about you, but I’m not excited by losing $1.3M in value…

KEY TAKEAWAY: If you’re buying a commercial property, ask for the “loss run history” for the property as part of your DD package. This shows all the claims made. If there are recent claims, you may have trouble finding insurance at all, and certainly not at reasonable rates.

ANOTHER KEY TAKEAWAY: ALWAYS shop your insurance very early in the contract cycle. Confirm your insurance cost assumptions before your DD expires. Your deal may not actually be a deal you should close on…

U.S. flags at half mast because former President Jimmy Carter passed.

37,000 acres & 12,000 structures burned, & 11 dead so far. Still, these fires in California rage on. I’m praying for rain. And for everyone affected to get through this.

I got to Florida for the Winter this week and saw the destruction wreaked by the two hurricanes that swept through a few months ago. There is a lot of work to be done. Compared to last year, this place is a bit of a ghost town. Nearly empty restaurants-for those that are open-and a lot less traffic than usual.

Let’s just take a moment of silence this week for those facing these challenges (or any other catastrophic challenge not listed here).

Commercial properties are going to be worth less because of these disasters. Insurance costs are sure to rise yet again, eating further into the NOI of any property NOT on triple net leases, leaving lower valuations in the wake.

Here’s today’s agenda:

• For Sale – 34 Real Estate Investor Deals 
• For Sale – 4 Warehouse Deals (One, in IL, is Off Market)
• Self Storage Investment – 22%-30% IRR Target
• Meet me in Orlando on Jan 31?

First Time Reading?  Sign Up Here

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Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
• Industrial 8,500 Sq. Ft+ on 3+ Acres
• Prefer value-add: either low rents OR vacancy, or both
• Prefer that you either Own, or are Direct to the Owner

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Storage Development Deal – Open Allocation closing Jan 2025
Want to Co-Invest with Me?

This is a picture taken outside of the Wilkes Barre, PA storage development project. We are building a similar project in Lawrenceville, GA and breaking ground in Jan 2025. We have about 1/3 of the $4M allocation available for investment. You can watch the Investor Presentation with Fernando Angelucci & I here. (reply to this email for the access code) 

NOTE-I have an apartment building currently under contract and awaiting closing. Once that closes, the cash from that deal goes straight into this deal, and the allocation will be closed.

Interested in Investing? Or have further questions?  Schedule a Call 

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I’ll be in Orlando Jan 31-Feb 2 at this Diamond Inner Circle – Commercial Academy Event. Want to meet me there?

Register Here

Here’s Why I Attend:

• Network: There are more than 100 Commercial Real Estate investors attending-most seek JV Partners who can bring them deals.
• Knowledge: There will be 9 presentations of recent & active projects. There is no other place to get this level of “behind the scenes” details-most CRE investors are highly secretive and NEVER share any of their strategy. I may be one of the 9, I’ll keep you posted. 
• Deal Flow: I own a shopping center, several storage facilities, 2 mobile home parks, and some flex industrial – all deals which discovered at these events.
• Orlando, FL: I love the warm weather this time of year in Florida!!

Register Here

Good Morning my Wise, Constant Reader!

Here’s today’s agenda:

• For Sale – 36 Real Estate Investor Deals 
• For Sale – 4 Warehouse Deals (One, in IL, is Off Market)
• Self Storage Investment – 22%-30% IRR Target
• Meet me in Orlando on Jan 31?

First Time Reading?  Sign Up Here

2025 RE Predictions
2024 Wins & 2024 Losses

2024 Wins

• I got married this year!!
  • Without my wife, Caity, I would not be in this place I am today, both personally & professionally.
• My daughter, Keeley, graduated college with a Criminal Justice degree. 
  • I dropped out of Villanova University in my 2nd year. I am impressed at her ability to stick with it & make it look so easy!!  Congratulations Keeley!!
• We got a new dog! 
  • Charlie was one of our wedding gifts.  “Thank you Aunt Kristin & Uncle Brian, we LOVE Charlie!!”  – Me & Caity
• We wrapped 2024 closing 259 deals. 
• We have 104 deals in inventory with projected profit of $7M+.  
  • This figure does not include any commercial real estate deals. This is the strongest inventory we’ve ever had in January. January normally reflects the slowdown which begins Nov 1st & runs through January 2. Now it’s raining leads & many deals will follow.
  • We are going to double the Gross Profit in 2025 and need a few good Deal Makers to join our team. It is NOT an easy job, and NOT easy money, but an intelligent & hard worker can expect to earn $200K+/year. The upper end of the yearly income achieved by someone on our team now is  just under $500K/year. Careers.DiamondEquity.com

2024 Losses

• Grandmom Breslin passed at 94 years old.
  • Just before Thanksgiving, my dad’s mother passed away peacefully, in her sleep, and her own bed. My dad retired in 2024 to care for her instead of sending her to a long term care facility.
  • On the day she died, Diamond Equity closed our highest grossing profit deal (high six figures) I like to imagine she played some role in that behind the scenes, in the afterlife we contemplate at times like this.
• A Few Bad Deals. We are 2 very sticky rehab projects we’ve owned now for 2-3 years.
  • Risk is Real with High Volume House Flipping 2 days before closing with our owner occupant buyer, the gas company shut off the gas. This wasn’t for non-payment, but a sudden requirement on their behalf that we install a new gas line. Coordinating that new line with them took 6 months alone-very frustrating. I’ll omit the dozen other roadblocks we faced on these 2 deals for now.
  • We will sell them both this year and face the reckoning… When you do a few hundred deals, every so often one will turn sour. The cure?  DO MANY DEALS!! Offset those losses & make them inconsequential by racking up 6 & 7 figures worth in profits!

2025 Predictions

• Commercial Deal Flow will be abundant this year. 
  • Flat rents across most asset classes & higher interest rates for longer will cause more sellers to exit. This will produce transaction volume & quality deals.
• Tax Code – Bonus Depreciation.
  • Everyone expects Trump to reinstate the Bonus Depreciation tax benefits. When this occurs, Buyers become MUCH MORE MOTIVATED to transact, as they receive large tax deferrals for doing so. This will spur development and large scale syndication activity in the $1M-$10M price range. This segment has been EXTREMELY challenging as the current Bonus Depreciation tax break has been sunsetting (60% in 2024, 40% in 2025-unless changed back to 100%).
• Residential Deal Flow will increase this year. (See the inventory increasing in the chart below)
  • More inventory = less price appreciation. As homes aren’t going up 10% per year, those sellers become less emotionally attached and more willing to sell. This current era, a Buyer’s Market behaving like a Seller’s market, is coming to a close. Prices will hold this year, but I wouldn’t build in 5-10% appreciation anytime soon.

Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
• Industrial 8,500 Sq. Ft+ on 3+ Acres
• Prefer value-add: either low rents OR vacancy, or both
• Prefer that you either Own, or are Direct to the Owner

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Storage Development Deal – Open Allocation closing Jan 2025
Want to Co-Invest with Me?

This is a picture taken outside of the Wilkes Barre, PA storage development project. We are building a similar project in Lawrenceville, GA and breaking ground in Jan 2025. We have about 1/3 of the $4M allocation available for investment. You can watch the Investor Presentation with Fernando Angelucci & I here. (reply to this email for the access code) 

NOTE-I have an apartment building currently under contract and awaiting closing. Once that closes, the cash from that deal goes straight into this deal, and the allocation will be closed.

Interested in Investing? Or have further questions?  Schedule a Call

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I’ll be in Orlando Jan 31-Feb 2 at this Diamond Inner Circle – Commercial Academy Event. Want to meet me there?

Register Here

Here’s Why I Attend:

• Network: There are more than 100 Commercial Real Estate investors attending-most seek JV Partners who can bring them deals.
• Knowledge: There will be 9 presentations of recent & active projects. There is no other place to get this level of “behind the scenes” details-most CRE investors are highly secretive and NEVER share any of their strategy. I may be one of the 9, I’ll keep you posted. 
• Deal Flow: I own a shopping center, several storage facilities, 2 mobile home parks, and some flex industrial – all deals which discovered at these events.
• Orlando, FL: I love the warm weather this time of year in Florida!!

Register Here

Happy Holidays fellow Real Estate Investor!

With the New Year just days away, everyone I know is already thinking about next year. I’ve found that asking the right questions as I plan helps produce the most desired result. Here are a few I ask as I evaluate my own goals & plans:

1. What is the #1 skill I have now which produces the most results? Can I expand this further? 80/20 rule, 80% of results come from 20% of our actions. IDENTIFY the 20% most impactful actions
2. What are some things I do, which cost time, that produce little, or even no results? Can I say “No” to these things next year to growth my results in other areas? 80/20 rule again. This time, I’m cutting out some of the 80% of actions which only produce 20% of the results
3. What will life be like a year from now if I recreate certain areas of my life around my current/future goals?  This is a visualization, with eyes closed, SEEING myself living life one year in the future
4. For any goal on my list, am I willing to pay the price to achieve it? Every goal has a set of actions, beliefs, and time/money investment required to achieve. It is important to understand the cost up front, when setting the goal and deciding whether or not you actually want to do/believe/pay to live out that goal

My goal for 2025 is to double the gross profit of our company. That means either every Ac Mgr on the team will also double their income (already avg $150K/year+ each)  OR we have to hire a few great Deal Maker’s to help carry the load. I’m sure we will have a combination of those 2 scenarios in reality.

The cost to achieve this goal is more & better leads for the team to work. Using the 80/20 framework, we are focusing our lead gen machine at the 20% of lead sources which have created 80% of our results. We’ve our own AI model to do this and, because of our 250 deals per year and industry leading data structure, we have an industry leading data set with which to train the AI model. These are the Glengarry leads!!

Want to work these with us in 2025?  For details on joining Diamond Equity please go to careers.diamondequity.com 

Here’s today’s agenda:

• For Sale – 36 Real Estate Investor Deals 
• Self Storage Investment – 22%-30% IRR Target
• Meet me in Orlando on Jan 31?

First Time Reading?  Sign Up Here

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Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
• Must be value-add, either low rents OR vacancy, or both

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Storage Development Deal – Open Allocation closing Jan 2025
Want to Co-Invest with Me?

This is a picture taken yesterday outside of the Wilkes Barre, PA storage development project. We are building a similar project in Lawrenceville, GA and breaking ground in Jan 2025. We have about 1/3 of the $4M allocation available for investment. You can watch the Investor Presentation with Fernando Angelucci & I here. (reply to this email for the access code) 

Due to Diamond Equity’s office operating in the Atlanta Region for the past 8 years, we have had a front row seat on the explosive, yet sustainable growth present in the Lawrenceville, GA market. We also have experience in large scale residential sub-division development in the region.

The terrain of Georgia creates a perfect storm for long term Self Storage demand. Due to the rocky, hilly terrain found in the Atlanta region, many houses must be built on slab-which means there is a large portion of new home inventory which does NOT offer a basement. No storage in the home creates the need for professionally managed storage space.

This facility will be built on Lawrenceville Highway, with full frontage. From the data sourced from my other facilities, we know that more than 50% of storage tenants come from road signage. Lawrenceville, GA is tough to get development approvals, which we have. This creates a barrier to future competition-and another reason we moved forward on this project.

Interested in Investing? Or have futher questions?  Schedule a Call 

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I’ll be in Orlando Jan 31-Feb 2 at this Diamond Inner Circle – Commercial Academy Event. Want to meet me there?

Register Here

Here’s Why I Attend:

• Network: There will be more than 100 Commercial Real Estate investors attending-most seeking JV Partners who can bring them deals.
• Knowledge: There will be 9 presentations of recent & active projects. There is no other place to get this level of “behind the scenes” details-most CRE investors are highly secretive and NEVER share any of their strategy.
• Deal Flow: I own a shopping center, several storage facilities, 2 mobile home parks, and some flex industrial – all deals which discovered at these events.
• Orlando, FL: I love the warm weather this time of year in Florida!!

Register Here

Happy Sunday!!

As we are all now settling down for the Holidays during these final weeks of 2024, many of us are planning our goals for 2025. One of the guys on our team here currently has $1.3 Million in profit working it’s way through renovation, sale, & closing across 12 deals. Most of this will close in 2025-but I assure you he’s aiming much higher than that for 2025.

I share this not to brag, but hopefully to inspire! I hope the other 22 people who share his role & title (Acquisition Manager) read this and contemplate what’s possible for themselves in 2025. Or perhaps you read this and also are inspired as you plan your 2025. Or, even better for you, you see that number and remember setting & achieving goals like this in years past-and will blow way past that again in 2025, without question.

The fundamentals in commercial & residential real estate support our strong 2025: lower interest rates, still record-high pricing, and mostly tight inventory that’s expected to let up some this year. This will break the logjam and allow us real estate investors & professionals to get back to our strong volume again.

Here at Diamond Equity, we have the reasonable expectation to double our business in 2025 due to improvements in every facet of our business. The major issue we will have is being understaffed-especially in Acquisition Managers.

To handle the increase in volume, we are looking for Acquisition Managers in each of our offices: Atlanta, GA (Roswell office), Phila, PA (Folsom office), & Chicago, IL (Chicago/Schaumburg office-we’ve moving soon). If you want to join us for 2025, reply with your resume & why you believe you’re a great deal maker.

Also, if you’re already crushing your business, and have no interest in joining the team, I’ll ask a favor:  If you know someone with a strong ability to sell & close deals, would you mind making an email introduction to me personally? My email is [email protected]

*Real Estate experience is not necessarily a plus here. Our current team members who joined with construction/roofing sales, car sales, or other high ticket sales experience actually perform much faster than people with only real estate experience. Our most profitable deal was closed by a former car salesman in the high 6 figures.

Here’s today’s agenda:

• For Sale – 44 Real Estate Investor Deals 
• Rehabbed Warehouse-Flex Space For Sale $425,000 ($56K NOI)
• How to Tell if Someone is a Successful Deal Maker

First Time Reading?  Sign Up Here

Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.
• Must be value-add, either low rents OR vacancy, or both

For Sale 3147 Louis Sherman Dr,, Steger,  Illinois

• 3,950 Sq. Ft Warehouse + Office
• 6,500 Sq. Ft. Fenced, Paved Yard
• Taxes Approx $9,420/Year (2024)
• Insurance approx $2,600/Year
• Recently Rehabbed
• Tenant Ready to Sign at $5,750/month MG
• Projected $69,000 Gross, $56,980 NOI
• M1 Zoning (map) See pg. 57 for uses allowed
• Buy it Now Price $425,000 (Value with signed lease: $670K @  8.5% cap)

This warehouse has been completely updated and ready to move in. Perfect for contractors, storage, certain auto repair, warehousing etc. This place would be ideal to store a car collection, boats, jet skis, etc.

This week you have the chance to buy a nearly-turn key warehouse deal. We are very close to accepting a lease for $5,750/month, or $56,980 NOI. Once this lease is signed, the value at an 8.5% cap rate will be $670,000.

Buy this all cash, sign the lease, and refinance $469,000 cash back out at 70% LTV. At 7.25% int. and a 25 year amortization schedule, you’ll have all of your cash back (inc closing costs & a check for $20K or so) and about $500/month cash flow. Not bad for NO money in the deal and NO rehab necessary. Your deal gets even better if rates drop or the market provides a lower cap rate.

One thing here: once we sign the lease, the price goes up to $500,000. You can buy now for $425,000 because you’re accepting the vacant property risk and you earn the reward ($670K value). Once this lease is signed, that vacancy risk is removed, and so is some of that reward!

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I’ll be in Orlando at this Commercial Academy Event
You Can Register Here

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Successful People Like My…

Successful people like my text messages. Let me explain. I send a successful Deal Maker a text and they almost immediately “like” the text. Or send me a reply quickly. Successful Deal Makers “like” the text to acknowledge what I’ve sent-it’s like a read confirmation, but with more attention provided. I KNOW they’ve seen what I sent.

On the other side, people who procrastinate, don’t pay attention to their phone, don’t do anything. Maybe I get a reply, maybe not.  No “like”, no acknowledgement. Probably no action on their part.

Successful People are ALWAYS Testing You

That reply, that “like” of my text is a actually a small test! SUCCESSFUL PEOPLE ARE TESTING YOU based on their speed of reply. I’ve hired contractors, brokers, loan officers, inspection companies, & even Acquisition Managers based, in part, on their responsiveness.

Believe it or not, some people are simply not responsive. Perhaps they simply turn off their phone at 5:00-or all weekend-because they have more important priorities than being responsive. It’s ok if they have other priorities and care more about their quiet time my business, but if I’m going to layout sums of MY cash in your direction, I honestly want you to care highly about MY business. 

I see it like this: if I’m hiring a broker to sell one of my commercial properties, and they don’t reply to my text, will they reply to the inbound text from our buyer?

If I hire a mortgage broker to procure a loan, and they don’t reply to my text in a timely manner, will they delay underwriting with that same procrastination? Will the delay put my (sometimes 5 or 6 figure) EMD in jeopardy later when requesting an extension because their delay caused a delay in funding?  Will they cost me that deal & the EMD if that seller doesn’t agree to extend?

We are in the real estate business. There are large sums of money at risk at all levels of this business and at every stage of every deal. There times when a call on a Sunday afternoon, or 7:30p on a Friday wins you the deal. Or a text during those same times keeps your deal alive. Even Steve Schwarzman talked about several deals made on a Sunday in his book, “What it Takes.”

I am not saying you must be on-call all the time, life happens and there are legitimate reasons for a slower reply. The trouble begins when the slower reply become the habit, and then eventually no reply happens. This “no-reply” is absolutely unacceptable. Better to reply quickly than be labeled as a “no-reply” kind of person.

Perhaps there are successful people out there who turn their phone off at 5 and don’t care to be bothered at certain times. Perhaps they’ve earned that right by earning an 8 or 9 figure portfolio and don’t need to be responsive anymore. Real Estate is tricky because for many, this is the end goal: Get Rich & take it easy.

Well, this isn’t me, and it is not how the team at Diamond Equity has already closed 245 deals this year. I personally enjoy the game-the business of transforming the Earth, one deal at a time, one parcel at a time. This is my lifestyle, my hobby, even my purpose.

We have a small allocation remaining here. The minimum investment would be $50K and open to accredited investors only.

Here’s today’s agenda:

• For Sale – 42 Real Estate Investor Deals 
• 6  Warehouse Deals for sale: www.DEICommercial.com
• Blackstone’s $39 Billion Deal with Sam Zell
• The REI Diamonds Show podcast has come to a Close…

First Time Reading?  Sign Up Here

Doing a Deal with Diamond Equity

This week’s shout out goes to Rich Lauletta for presenting an Off Market Retail deal this week. This was off market, which is ideal, but is 93% occupied and most rents are at market-so there isn’t much value to add here. This is a good deal for a 1031 buyer or even a Retail Fund seeking stable product. I’m looking for more upside/risk in a deal-like 20%-30% vacancy or more, or rents which haven’t been brought to market in more than 4-5 years

Here’s How You & I Make Some Money Together:

1. You buy a profitable deal from me to run yourself. 42 Available Now
2. I pay you 10% interest & 2 points to fund my rehab deal.  www.FundRehabDeals.com
3. We partner on a larger, longer time syndication deal.
   1. I invest my cash in syndications and am always looking for great operators.
   2. I operate syndications where you might invest. There is a small Self Storage Development allocation remaining. Target IRR 22.6%-30.6%. Reply to this email for the Investor Presentation.
4. You find me an Industrial or Retail value-add deal 40,000 sq. ft or larger located 4 hours drive from either Atlanta, Philadelphia, or Chicago, where our physical offices are located. Email me the details.

For Sale 5522 W. Division St., Chicago, IL 60651

• 8,800 Sq. Ft. Warehouse
  • 12″ Clear Ceiling Height
  • Vacant & Cleaned Out-Move Ready
  • For lease $8,800/month MG
  • More Photos Here
  • Contact Oscar at 708-970-5983
• Price $649,000 Now $549,000 

6 Warehouse Deals for Sale:  www.DEICommercial.com

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Blackstone Wholesaled $19 Billion of their $39 Billion Purchase from Sam Zell

Chicago native Sam Zell (d. 2023) was arguably one of the greatest real estate investors of his time. In 2006, right at the peak of the market, he exited Equity Office Properties (EOP) to Blackstone for $39 Billion. A great deal for Sam.

Blackstone is arguably the greatest real estate investment firm of our current time, you might recognize them as Invitation Homes – HUGE buyers & owners of single family homes.

On the day Blackstone closed the deal with Sam Zell, they immediately sold more than $19 Billion worth of the portfolio. THE SAME DAY. Many, if not all, were assignment of contract deals. Sam Zell even knew what they were doing-he was happy enough getting his price (as most sellers should be right now, at the record high pricing mostly still found in the market).

For the full story, I suggest listening listening to Chapter 19 of Stephen Schwarzman’s (Blackstone Founder) “What it Takes” audiobook on audible. This is an incredible look behind the scenes of both the most prolific real estate firm in the world AND a tour through the economic downturns which occurred during our career. Shout out to Ian Wallach for referring this one to me last week.

For extra credit, you might also check out Sam Zell’s “Am I Being too Subtle” for his side of the story in this deal-and the same walk through the history of his prolific career AND the historical context of the market cycles.

The R.E.I. Diamonds Show has come to a Close for 2024

The REI Diamonds Show, my podcast, has come to a Close… for 2024. The season is over. I appreciate your time in tuning in over the years.  Keep your eyes out-the next episodes will be released in Q1 2025.  For now, I’ve personally backed off to get the Diamond Equity Machine supercharged going into 2025.

December & January are a slower time in real estate. There is simply lower transaction volume. I’ve historically used this time to think, plan, & program our business model for the coming Spring market. I am doing this again and my goal is to double our business.

You might do the same if you’re a flipper-by buying as many deals as you can find right now. Renovate while they’re slow and sell into the busy season, which I predict will begin in March and run through July 15. This is when retail buyers will be out in force and prices will hit their peak. Have Faith, buy now, & be ready to reap the harvest you deserve.

Here’s today’s agenda:

• For Sale – 33 Real Estate Investor Deals 
• Delusional Optimism
• Podcast on Earning $50M+ on a Single Deal

First Time Reading?  Sign Up Here

Doing a Deal with Diamond Equity

This week’s shout out goes to Rick Panlilio (Condo De-Conversion Specialist) for introducing me to Jamie Brandenburg of The Real Equity Group. Jamie and his team are brokers and operators of Industrial real estate in Tennessee. As you probably already know-I love industrial real estate and I’m bullish on Tennessee long term.

Jamie made an offer on this deal I have below, but also referred me to his contractor-who we will likely hire to complete the renovation on this one-assuming it doesn’t sell before that. Thx Rick! Thx Jamie! You’re both rock stars!

Another shout out goes to YOU-my weekly Jewels of Wisdom email newsletter reader. There are over 11,000 each week who open & read this email, of 25,000 or so on the list. I appreciate your interest in Diamond Equity & my weekly newsletter.  Thank you!

Writing this isn’t about the numbers though-it is about the one on one connections created when we find a way to do some business-like Jamie & Rick above.

Here’s How You & I Might Work Together:

1. You buy a profitable deal from me to run yourself. 33 Available Now
2. I pay you 10% interest & 2 points to fund my rehab deal.  www.FundRehabDeals.com
3. We partner on a larger, longer time syndication deal.
   1. I invest my cash in syndications.
   2. I operate syndications where you might invest. There is a small Self Storage Development allocation remaining. Target IRR 22.6%-30.6%. Reply to this email for the Investor Presentation.
4. You find me an Industrial or Retail value-add deal 40,000 sq. ft or larger located 4 hours drive from either Atlanta, Philadelphia, or Chicago, where our physical offices are located. Email me the details.

For Sale 203 E Trigg Avenue, Memphis, TN 38106

• 30,658 Sq. Ft. on 8.94 Acre Industrial Lot
  • Up to 40″ Ceiling Height
  • Seller may Consider Seller Financing 
  • Railroad Spur (dormant)
  • Offering Memorandum
  • For details, contact Henry Webb at 901-526-3100
• Price $985,000 

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Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

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Delusional Optimism

Last week I wrote an article titled “How to Turn $100K into $3.2M. It was an example of the power of compounding and there wasn’t a single catch-THERE WERE TWO! First, you had to patiently live, wait, & invest over the 25 year time period. Second, each of the 5 year deals had to successfully double your money each time.  To be honest, this is probably Delusional Optimism…let me explain.

Delusional Optimism is different than Realistic Optimism. And also different from evaluating Risk (pessimism, if things go wrong).  All are critical to successful investing. Delusional Optimism is counting the “Luck factor” in a deal. You can count on it, you shouldn’t expect it, but you should be aware of it going into a deal. If there is none, is the risk still worth it?? Maybe-but this is deal dependent.

Before I make an investment, I ask myself, “If things go well, and we get lucky, how much upside might be in this deal?” Delusional-because I cannot get lucky every time. But if I’m risking my money, I need to see some “luck” if I’m going to take the risk. I do every deal “hoping” for a superior outcome. Here’s an example:

My First Passive Syndication Deal – Las Vegas
My “Delusional Optimism” as a Passive Investor

The first time I invested passively in a syndication, my Las Vegas Shopping center, (currently listed at $17.9M) there were 3 major moments of commitment. These were heavy moments, as I decided to move forward at each step.

1. I had to say out loud, “I’ll do it, I’ll invest my money.”
2. I had to then sign the subscription docs. I remember having second thoughts at this moment. Should I sign? Should I do this deal? Is this the right thing to do? I decided, yes, it was, and I signed the docs.
3. Wiring the money was the biggest & final step. I had some hesitation here too, but after just a moment, I sent the money.

That was it. That was all the work I did on my 1st syndication deal. No more emails, no phone calls, no decisions, & no further checks out of my pocket. It was quiet for about 14 months, receiving only my quarterly updates. Now that the distributions have started, I’m glad I made the deal. But this is still reasonably good, not yet hitting the level of my Delusional Optimism.

My Delusional Optimism – Getting Lucky in Las Vegas

My realistic optimism on the Las Vegas Shopping center deal is that I receive my money back and maybe 8%-12% IRR. My Delusional Optimism is that we get lucky, sell the deal around that $17M+ listing price, and my passive investment will generate about 1.8X the initial amount-in less than 3 years, or a 26% IRR.

Delusional Optimism – Flipping a Single Family House

You build a fix & flip deal on a $40K profit spread. You hit the Spring market perfectly at about March 17 and you get 3 offers in the first 3 days. (Right now would the perfect time to buy that flip for the Spring Exit) You call highest & best and the resulting contract & closing nets a $65K profit. That $25K is the result of luck. If this were evaluated on the way into the deal, the $25K represents my Delusional Optimism in the deal. I’m hoping for this every time. I’m counting on the $40K-Reasonable Optimism.

Underwriting Deals with Delusional Optimism

I NEVER write down the Delusional Optimism expectations-it’s only in my head. It is important to never build a deal solely on Delusional Optimism. Far better to be conservative and create deal structures and forecasts on realistic optimism with a careful eye on the risks of a deal.

My final takeaway here is to do deals with 2 levels of Optimism & one level of Pessimism. Reasonable optimism that you’ll hit an acceptable profit target and Delusional Optimism that counts on luck to deliver an outsize return.

Here’s today’s agenda:

• For Sale – 31 Real Estate Investor Deals 
• How to Turn $100K into $3.2M
• Georgia Self Storage Development
• Podcast on Building a Portfolio of Mortgage Notes

First Time Reading?  Sign Up Here

How to Turn $100K into $3.2M

First, let me begin by stating that I am not an attorney and not an accountant-this is NOT legal or investing advice. This is my own experience and the way I view my own retirement and investment philosophy. My goal is to turn every $100K investment into $3.2M by the end of my investing career. I’ll call this 25 years.

Syndication deals are partnerships where money can be placed by Limited Partners and the day to day activity of that partnership is run by General Partners. At this stage of my career, I prefer these investments over the actual ownership of rental property because I can keep my focus on my main business, Diamond Equity, which is where I derive my income & investment capital.

I Need to Win 5 Times to Reach My Goal

I choose deals where I am expecting to double my money in 5 years or less. Here’s how the math works if I can win 5 times in 5 syndications over 25 years:

The Math, if the Investment is Made in a Self Directed IRA;

• Deal 1, invest $100,000 and receive $200,000 in return
• Deal 2, invest $200,000 and receive $400,000 in return
• Deal 3, invest $400,000 and receive $800,000 in return
• Deal 4, invest $800,000 and receive $1,600,000 in return
• Deal 5, invest $1,600,000 and receive $3,200,000 in return

The Math, if my Investment is made after paying 20% long term capital gains on each profit, assuming  no tax code change, over my 5 deal, 25 year time horizon:

• Deal 1, invest $100,000 and receive $200,000 in return
• Deal 2, invest $180,000 and receive $324,000 in return
• Deal 3, invest $324,000 and receive $583,200 in return
• Deal 4, invest $583,200 and receive $1,049,760 in return
• Deal 5, invest $1,889,568 and receive $1,889,568 in return

Most of my personal syndication investments are done in the latter example, where I am paying tax at each profit event. Not optimal, but I didn’t come into the real estate business from another career – owning an IRA from a previous employer. If you want to learn more about self directed IRA’s, check out this podcast I recorded with Damion Lupo.

Yes, this plan assumes optimal performance across 5 deals. Challenging, maybe, but not impossible. I keep about 1/3 of my portfolio in real estate owned, 1/3 in syndication deals like this, and 1/3 in cash which I lend in short term Private Mortgage Investment Opportunities.

Below you’ll find details for my most recent syndication deal where I am investing my cash & also acting as a general partner. This means I am actively managing this project with Fernando and the construction team. If you’re interested in investing in this deal alongside me & Fernando, please reply to this email and I’ll send over the replay of the Investor Presentation we did a week or so back.

Wreaths of LUV – Order Yours today & Support Chicago’s Youth

These Holiday “Wreaths of LUV” are hand-crafted by the paid interns at the LUV Institute. Every year I order a few dozen and have them shipped to my friends & family all over the U.S. Order yours here.

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Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

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Accredited Investors – Just over $1M Remaining for this Raise
Lawrenceville, GA – 87,068 Sq. Ft. 3 Story Storage Facility
Reply to this if You’re Interested in Investing

I am building this facility with my partner Fernando Angelucci and his team at SSSE. Fernando has a background in engineering and has closed 53 Self Storage deals across 24 states with more than $230M in value. This project will be his 3rd Class A facility being built ground up. You can view his 2nd Class A facility-nearly completed here (located in Wilkes Barre, PA)

This current project is projected to run for 3 years, to allow 9-12 months for construction followed by 24 months to stabilize (rent), then sell the project. The buyer for the completed project will likely be one of the publicly traded Storage REITs.

Sometimes these REITs buy projects at CO (certificate of occupancy) and complete stabilization on their own. If this were to occur at a favorable price, this project may return capital much earlier than the projected 3 years. This would be good, but may or may not occur.

We already have the full $4M capital committed for this deal, but are opening up just under half of the deal from our own portion to accredited investors in our network.

I’m personally doing this deal for this reason: 

1. This deal is heavily in favors the investor/limited partners and offers superior potential returns than my 4.51% money market accounts.
   1. 80% of the profits go to the Limited Partners (The $4M capital raise)
   2. 20% of the profits go to the General Partners (who build the deal, guarantee the loan, and co-invest)

As a general partner, sharing a very small portion of that 20% with our team, this deal would not be worth my time. We construct deals like this as a place to multiply our own capital by investing our cash on the LP side of the deal. That’s why 80% of the profit goes to those partners-because it is the same people running the deal on both sides. These are the type of syndications I look for-where the general partners are running the deal to keep their money working-not simply to generate management fees for themselves.

Here’s today’s agenda:

• For Sale – 35 Real Estate Investor Deals 
• Timing the Real Estate Market
• Georgia Self Storage Development
• Office & Retail Real Estate with Joe Brady – Podcast

First Time Reading?  Sign Up Here

How to Time the Real Estate Market

With the holidays upon us, the real estate market has slowed to a crawl. Due to the lower activity, you can buy your best deals right now. Then you can patiently renovate those deals through the Winter and sell in the Spring, when activity is ramping up again.

Properties needing work listed on the MLS are one of the best sources of deals right now. We have 35 available here. People are motivated and offers are not abundant. Go against the trend, schedule showings, and MAKE OFFERS. You’ll win some, find your next project, and position yourself perfectly for 2025.

Wreaths of LUV – Order Yours today & Support Chicago’s Youth

These Holiday “Wreaths of LUV” are hand-crafted by the paid interns at the LUV Institute. Every year I order a few dozen and have them shipped to my friends & family all over the U.S. Order yours here.

---

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

---

Accredited Investors – Just over $1M Remaining for this Raise
Lawrenceville, GA – 87,068 Sq. Ft. 3 Story Storage Facility
Reply to this if You’re Interested in Investing

I am building this facility with my partner Fernando Angelucci and his team at SSSE. Fernando has a background in engineering and has closed 53 Self Storage deals across 24 states with more than $230M in value. This project will be his 3rd Class A facility being built ground up. You can view his 2nd Class A facility-nearly completed here (located in Wilkes Barre, PA)

This current project is projected to run for 3 years, to allow 9-12 months for construction followed by 24 months to stabilize (rent), then sell the project. The buyer for the completed project will likely be one of the publicly traded Storage REITs.

Sometimes these REITs buy projects at CO (certificate of occupancy) and complete stabilization on their own. If this were to occur at a favorable price, this project may return capital much earlier than the projected 3 years. This would be good, but may or may not occur.

We already have the full $4M capital committed for this deal, but are opening up just under half of the deal from our own portion to accredited investors in our network.

I’m personally doing this deal for this reason: 

1. This deal is heavily in favors the investor/limited partners and offers superior potential returns than my 4.51% money market accounts.
   1. 80% of the profits go to the Limited Partners (The $4M capital raise)
   2. 20% of the profits go to the General Partners (who build the deal, guarantee the loan, and co-invest)

As a general partner, sharing a very small portion of that 20% with our team, this deal would not be worth my time. We construct deals like this as a place to multiply our own capital by investing our cash on the LP side of the deal. That’s why 80% of the profit goes to those partners-because it is the same people running the deal on both sides. These are the type of syndications I look for-where the general partners are running the deal to keep their money working-not simply to generate management fees for themselves.

Here’s today’s agenda:

• For Sale – 35 Real Estate Investor Deals 
• Conyers Single User Warehouse-For Sale
• Georgia Self Storage Development (Zoom Link & Time)
• Short Term Rental Strategy – Podcast

First Time Reading?  Sign Up Here

Doing a Deal with Diamond Equity

Thank you Rex Gravitt for making the introduction to Greg at Piedmont Bank.

For Sale 1314 Olympic Ct, Conyers, GA 30012

• 6,600 Sq. Ft. on 18,731 Sq. Ft. Industrial Lot
  • Up to 19′ Ceiling Height
  • 2 Overhead Garage Doors
  • 1 Year Sale/Leaseback ($4,400/mo) Or Vacant
  • Offering Memorandum
  • For Lease at $6,000/month
• Price $635,000 

This warehouse is move-ready and includes a 1,600 sq. ft. Upper Office area already built out. If you’re in need of higher ceiling height, you might demo that area. The ground floor plate is 6,600 sq. ft., however there is 8,200 sq. ft. of usable space if you include that office area.

Seller is willing to lease back for 1 year at $8NNN-which you might prefer if you’re buying this for strictly investment purposes. This allows you time to be patient in finding your next tenant.

If you’re buying and wish for immediate occupancy, we can arrange this property to be delivered vacant at closing.

Conyers, GA is Southeast of Atlanta. It is experience the same growth curve as most of the sunbelt region of the U.S. Small warehouse product is in high demand and there is little inventory available. This dynamic will very like create rising rents in this building for years to come.

Please connect with Hannah Branham for details at 404-754-5829

Wreaths of LUV – Order Yours today & Support Chicago’s Youth

These Holiday “Wreaths of LUV” are hand-crafted by the paid interns at the LUV Institute. Every year I order a few dozen and have them shipped to my friends & family all over the U.S. You can order yours here.

Below is a photo (circa 2016) of Aaron Lockhart (runs Diamond Equity, Chicago), myself, Cosette Wilburn (founded & runs LUV Institute), & our friend Joshua Walls. Pictured top right is an example of the Wreaths of LUV. This photo is from a few years ago when we had to physically pick them up. Now with nationwide shipping, it’s much easier to Spread the LUV this Holiday Season!!

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Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

---

$1,500,000 Remaining Capital Raise 
Lawrenceville, GA – 87,068 Sq. Ft. 3 Story Storage Facility
Zoom Presentation, Q&A Thursday, 11/21 at 12ET/11CT

I am building this facility with my partner Fernando Angelucci and his team at SSSE. Fernando has a background in engineering and has closed 53 Self Storage deals across 24 states with more than $230M in value. This project will be his 3rd Class A facility being built ground up. You can view his 2nd Class A facility-nearly completed here (located in Wilkes Barre, PA)

This current project is projected to run for 3 years, to allow 9-12 months for construction followed by 24 months to stabilize (rent), then sell the project. The buyer for the completed project will likely be one of the publicly traded Storage REITs.

Sometimes these REITs buy projects at CO (certificate of occupancy) and complete stabilization on their own. If this were to occur at a favorable price, this project may return capital much earlier than the projected 3 years. This would be good, but may or may not occur.

We already have the full $4M capital committed for this deal, but are opening up just under half of the deal from our own portion to accredited investors in our network.

I’m personally doing this deal for this reason: 

1. This deal is heavily in favors the investor/limited partners and offers superior potential returns than my 4.51% money market accounts.
   1. 80% of the profits go to the Limited Partners (The $4M capital raise)
   2. 20% of the profits go to the General Partners (who build the deal, guarantee the loan, and co-invest)

As a general partner, sharing a very small portion of that 20%, this deal would not be worth my time. We construct deals like this as a place to multiply our own capital by investing our cash on the LP side of the deal. That’s why 80% of the profit goes to those partners-because it is the same people running the deal on both sides. These are the type of syndications I look for-where the general partners are running the deal to keep their money working-not simply to generate management fees for themselves.

Are You Interested in More Information?

Fernando & I are hosting a 60 min. Zoom Presentation for Potential Investors

• 12ET/11CT this Thursday 11/21
• Zoom link: www.REIDiamonds.com/zoom
• Please mark your calendar right now