Category: Jewels of Wisdom Newsletter

Jewels of Wisdom Newsletter – Mastering Commercial Real Estate Investing

Good Morning!

Before we begin, I’d like to mention that I’m looking for an Acquisition Manager to work the North New Jersey region based out of our office in Folsom, PA. We provide leads, training, & capital. Go to Careers.DiamondEquity.com for details on how to apply.

Here are today’s highlights:

37 19 Unit Portfolio For Sale, plus 24 Fix & Flips
10% Passive Returns with Short Term Loans
Creating $10M+ in less than 18 Months on One Deal (podcast)
Commercial Academy is August 23-25. You coming?

First Time Reading? Sign Up Here

Kiavi makes Hard Money Loans Starting at 9.64%
Get $350 Credit on Your First Loan – Begin Here

Private Lending Offers Secured 10% Returns with NO Work

Private Lending Webinar Replay – Podcast Coming Soon

Last week I hosted a Private Lending Webinar covering both the Fix & Flip Investor & Private Lender’s perspectives. I also recorded an REI Diamond Show episode with my dad as the guest. He’s been a private lender for years.He and I also discuss the founding of Diamond Equity Investments back in 2006 & his experience in making a few dozen private loans himself.

This episode, along with the Private Lending Webinar replay will be released. Keep your eye out! For the earliest notification of release, follow the REI Diamonds Show on iTunes, Spotify, YouTube etc.

Right now I have a Private Lender who needs his capital back on a project we are constructing in Berwyn, IL. The loan amount is $380,000 and the property is going to sell for $535,000-$565,000. We are paying for additional construction out of pocket, so the loan of $380,000 is going back to the original lender. This loan pays a 10% interest balloon payment when we return capital, likely in 6 months. Email me back if you’d like to fund this loan.

Creating $10M+ in less than 18 Months on One Deal (podcast)

If you’ve been following this newsletter, you probably already know the name Saul Zenkevicius. Saul & Rafik (last podcast released) have bought, redeveloped, and are leasing up the Piqua Center-a 500,000 Sq. Ft. dying mall (pictured below). Saul shares the exact method used to turn this deal around and create more than $10M in value in less than 18 months. Check out Saul’s REI Diamonds Show episode here.

Cleveland Commercial Academy Event August 23-25

Rafik, Saul, & I all network and study commercial real estate at the Diamond Inner Circle Mastermind, which begins each even with the Commercial Academy. If you register as my guest, using this Commercial Academy Registration link, you may attend for just $897. After you register, please send me an email so that you & I can connect at the event.

At this event you will meet & hear how many people are doing deals with profits in excess of $1M. I invest in commercial real estate deals for scale & simplicity. Large amounts of capital can be placed, managed intelligently, and create large returns. I prefer this over my single family & apartment portfolio-which is why my units are now for sale. See below:

37 Unit Chicago Portfolio For Sale

15 Units @ 9211 S. Laflin Street, Chicago IL 60620 $1,249,000(Sold)
10 Units @ 6221 W. Wabansia St., Chicago IL 60639 $1,149,000
3 Units @ 871 N. Richmond St, Chicago IL 60622 $699,000
3 Units @ 9235 S. Brandon St, Chicago IL 60617 $279,000(Sold)
6 Units @ 1843 W 54th Street, Chicago IL 60609 $399,000

These are all listed on the MLS individually, but may sell at a discount if you buy as a complete package. For additional detail, please connect with Jason Marcordes, IL broker, at 630-842-5557 or [email protected]

Prefer Flipping Houses? Or Rentals? 24 More Deals Available at www.DealsWithROI.com Atlanta, Chicago, & Philadelphia Regions

The Decision to Get Rich

My mentor, Dan Kennedy, told me that if you want to get rich, you have to first make a decision to get rich. Then you have to develop the mindset that people who are already rich have developed. He then went on to recommend several books which, when read correctly, would create that same mindset for the reader.

I’ve created a list of the most impactful of those recommendations, along with a short description of each big idea while reading. You can view my reading list here.

BTW, these are required reading for the team here at Diamond Equity. In fact, I hesitated to share this list publicly because these books have been a superpower for us, a competitive advantage. That said, this list is now yours and I sincerely hope you become rich yourself. (or even more rich, if you’ve already made it!!) Happy Sunday!

Jewels of Wisdom Newsletter – How to Successfully Invest in Real Estate

Good Morning!

Before I begin, I’d like to mention that I’m looking for an Acquisition Manager to work the Philadelphia region based out of our office in Folcroft, PA. The Acquisition Manager is the leader on every deal we do at here Diamond Equity. We provide leads, training, & capital. Go to Careers.DiamondEquity.com for details on how to apply.

Here are today’s highlights:

37 Unit Portfolio For Sale
Your Property Insurance may NOT Pay Out for Catastrophic Claims
Getting Buyers Excited to take Your Call
How to Successfully Invest in Real Estate – Source the DEALS!

First Time Reading? Sign Up Here

Kiavi makes Hard Money Loans Starting at 9.64%
Get $350 Credit on Your First Loan – Begin Here

3 Ingredients Needed to Successfully Invest in Real Estate

Deal – A property you can buy & operate for a profit
Capital – The money to close & operate the deal
Operations – Includes renovation, management, and/or sale

First off, operations-actually running the deal through to completion-is a LOT of work in some cases. A great operator might be a great rehabber with solid subcontractor resources and attention to detail. Or they might be a great leasing specialist – like Saul Z, who was on the REI Diamonds Show recently-keep an eye out for that episode being released later this week.

Most people getting started in the business think the Capital is the hardest part. I used to think I had to save up enough cash for a down payment before I could get into the business. Turned out, once I found my first deal, I found a way to get the capital to close it out.

More experienced investors know that the Deal is the most challenging to come by. You have to hunt, make offers, follow up – WORK HARD to keep moving deals into your pipeline. It turns out, once you get some momentum, there is always a way to get the capital if you have a solid deal.

Successfully investing in real estate requires all 3 of these ingredients to come together. You can be good at all 3, or, in my case, partner for the pieces I was missing. Since I didn’t have capital at the beginning or much experience in operating the deal, I decided that I would become the source of the deals. No one in the world would find more deals than Dan Breslin. I still believe this.

If you haven’t yet found the success in real estate investing that you desire, evaluate which of these 3 ingredients you bring to the table and which you might be missing. Either partner with someone who can bring those missing pieces or resolve to learn the missing skill. Or, if you’re starting from the beginning the way I did and you don’t have any of those 3 ingredients, resolve to become the source of deals.

The Real Estate Broker Every Investor LOVES

I’m going to be honest here. I love people and I love real estate agents, but, as a buyer & investor, if you call and have NO deal to discuss, it’s hard to keep the conversation going. As I noted above, every successful investor is on the hunt for deals. The real estate broker everyone loves is the one who can bring a continuous source of deals for consideration. Resolve to be the source of deals.

When you call a buyer and you have a deal they might have interest, that buyer is happy to take your call. When you call without a deal, the buyer is wondering why you bothered to call? Having an actual deal to discuss becomes this valuable piece of information that changes everything. Then then you, the caller becomes a welcomed guest instead of an unwelcomed pest.

I can help you with this, as many of our deals throughout the U.S. are fix & flip deals. The kind of deals most investors are looking for. Whether you’re a investor looking to flip a house, or an agent looking for real deals to present to clients, I suggest you check out our available deals at www.DealsWithROI.com You can discuss these deals on the calls you make to your buyers this week.

Your Insurance Company may NOT Payout for Catastophic Claims

The most shocking fact I’ve discovered in 2024 is that insurance companies often deny claims for catastrophic property loss-such as fire. Let’s face it, one of the best reasons to invest in real estate is because the large value of the asset is insured-or so I thought.

Many policies are written (and signed off on by the insured – YOU) so that they may actually be in a default state from day 1.

One example is a rehabber who gets a landlord policy for their fix & flip deal. Well, this policy can legally deny your claim because the property policy would be a vacant house OR builder’s risk policy. Many flippers don’t know that this policy exists and often insurance agents don’t ask or don’t know themselves-but are motivated to simply sell you the landlord policy and collect their commission. Fire occurs, insurance company discovers half-completed renovation and denies the claim. Not good.

For a deeper dive into properly purchasing insurance, I suggest listening to these two REI Diamonds Show episodes by Andy Gurzak, claims adjuster, & Galen Hair, insurance claim attorney.

Jewels of Wisdom Newsletter – On Redeveloping Dying Malls

Good Morning!

Here are today’s highlights:

25 Unit Apartment Portfolio for Sale
How to Redevelop Dying Malls (Podcast Released)
On the NAR Buyer Agent Settlement (I LOVE Paying Brokers!)
Private Lender Webinar Details & Registration

First Time Reading? Sign Up Here

Private Lenders -vs- Hard Money Lenders

Last week I asked if anyone was interested in attending a zero cost Private Lending Webinar and the response was strong. The Hard Money industry has stolen the term “Private Lender” and used it in place of “Hard Money Lender” to dupe investors into calling them with excitement-thinking they’re calling a real Private Money Lender. Here’s the difference:

Private Money Lenders are private individuals with the cash in the bank to simply wire the money into closing. The terms set between a real Private Money Lender and you, the borrower/flipper/investor. Hard Money Lenders normally have set terms which are not flexible and cannot be influenced by you, the borrower.

Hard Money Lenders – They Set the Terms

Monthly Payments
Down Payments 10%-30%
Underwriting of Tax Returns, Credit, Etc.
Appraisal Contingencies

Private Lenders – You Set the Terms

Balloon Payment Upon Sale – No Monthly Payments
100% Funding of Construction & Purchase
No Underwriting Necessary
No Appraisal Necessary

In a volume flipper’s business, there may be a place for both Private & Hard Money Lenders. I can get Hard Money for 1 point and 9% interest, yet I choose to pay 2 points & 10% interest to my Private Lenders. I do this because they’re easier for me to deal with and I enjoy sharing double digit returns with my Private Lenders.

Private Lending Webinar – Friday 7/12/2024 @ 1:00p ET / 12:00p CT

This Friday I am hosting a no-cost, high value Private Lending Webinar. I am doing this to help those on my buyers list become even better buyers than they are right now. When more people have access to Private Money, more people can buy our deals. Here’s what we’ll cover

From the Borrower/Investor’s Perspective
- Presenting a Deal for Funding
- Where to Find Private Lenders
- Setting Favorable Terms
- Offering Additional Security for the Lender
From the Private Lender’s Perspective
- Where to Find Borrowers
- Underwriting the Investor AND the Deal for Risk
- Setting Favorable Terms
- Obtaining Additional Security from the Investor

If you’d like to attend the Private Lending Webinar, please complete this registration form to be added to the list. Attendance will be limited to those that register. BTW-I’m selling nothing here, no pitch-just powering up my buyers so that they can buy & invest in more of my deals.

Are Buyer Brokers Commission Going to Disappear?

The NAR has been on everyone’s mind recently. Many speculate that buyer broker commissions are going away. You can read the details on the NAR website and realize that this is not the case. Agents & brokers will simply need to arrange a new structure for how to get compensated. The main item I notice is the removal of the Buyer Commission field from the MLS.

Well here’s the good news: If you’re representing a buyer from a deal I send you, we normally offer 2.5% and have no intention of changing that. If I am paying a commission, that means I have received an acceptable offer. Very often, the strongest offers I receive are made through a skilled buyer’s broker-who surely helped that buyer figure out how to offer the right amount to win them the deal.

Buyer brokers provide priceless value in guiding clients to make correct offers and navigating them to the closing table. Some investors and buyers can do this on their own, but in my experience 99% of buyers in the US real estate market need a bit of a push to trudge through transactions and actually close. I appreciate the real estate brokerage community and will gratefully show my support by continuing to make commission payouts at closing!!

Podcast Just Released – Redeveloping Dying Shopping Malls Part 1

Rafik Moore, of Brait Capital & I discussed the process of buying & redeveloping Dying Malls around the US. What does it take to stabilize a 511,000 sq. ft. commercial real estate deal? How much does it cost to buy a deal this size? Rafik & I cover this, and more in this week’s REI Diamonds Show episode. Keep an eye out for his partner, Saul Zenkevicius’ REI Diamond Show episode being released next week. You’ll hear the other side of this dynamic dou’s story.

Rafik & I met at the Commercial Academy event held back in 2022. Since that time my idea of “a good deal” has changed dramatically. Six figures became seven. Rafik & I will both attend the upcoming Cleveland event – August 23-25th. If you’d like to be my guest, please email me using the subject line “Commercial Academy”. The cost to attend is $897.

25 Unit Chicago Portfolio For Sale

Interested in Either of these Apartment Buildings Below?

Call or Text Jason Marcordes at 630-842-5557

10 Unit Apartment Building

6221 W Wabansia Ave, Chicago, IL 60639 – Price $1,149,000

10 Legal Units, Each 2 Bed 1 Bath
Current Gross Income $150,000+
Galewood Neighborhood
$500,000 Capex in Past 4 Years
Separate Electric & Gas/Heat Meters
9 New HVAC Units
Room to Raise Rents
View Offering Memorandum

15 Unit Apartment Building

9211 S Laflin St, Chicago, IL 60620 – Price $1,299,000

15 Units (1 is non-conforming)
Current Gross Income $190,000+
Brainerd Neighborhood – Near Beverly
Separate Electric & Gas/Heat Meters
Includes the Parking Lot
Room to Raise Rents
View Offering Memorandum

Price $1,149,000

Prefer Single Family Flips & Other Below Market Deals?

View 19 RE Investor Deals for Sale in Atlanta, Philadelphia, & Chicago MSA’s

Jewels of Wisdom Newsletter – How to Fund Deals With No Money Down

Good Morning!
Here are today’s highlights:

30,000 Warehouse on 8+ Acres for Sale
The Best Short Term Rental Market in the U.S.
Any interest in attending a zero cost Private Lending Webinar?

Here’s How I Did My 1st No Money Down Deal with a Private Lender

It was September 2006 the market felt a lot like it does right now in 2024. We had peak pricing just in the rear-view and the prices were holding mostly steady. By this time, I had closed 3 wholesale deals, strictly assignments, and made a few bucks doing real estate deals. Still, I hadn’t fulfilled my dream – to begin fixing & flipping houses.

I met Craig in May by cold-calling his “house for rent” classified Newspaper Ad and trying to buy his house. We met in person at the local real estate networking group and kept in touch at those events. I found a deal I believed I could buy, clean out, and resell to a retail “handyman” buyer for a quick profit, but I didn’t have the $120,000 necessary to close. While a straight private loan would have been the most profitable route for me, I chose something better-and less profitable in the short term.

I assumed Craig had the money to close, and I was hoping to build a close working relationship with him. For this reason, I brought the deal to Craig with my plan: he brought the money, closed in his LLC (giving him control & safety in the deal-considering I was a relatively broke 26 year old…), I ran the cleanout and we split the profit 50/50. It was a smooth deal and we whacked up $38,000 on that deal. It was a good start.

Then on deals #2 & 3, I proposed he simply lend me the money to fix & flip them on my own. He reviewed the deals and agreed. I am still humbled that he took that chance on me back then. Both of those deals ran about 8 months and returned his points, interest, and principle – all in a single balloon payment – as well as netting me solid profits. This was only the beginning of the longer-term profits in that relationship with Craig.

Since 2006, Craig & I have partnered on over 500 profitable deals together and he is a key partner in Diamond Equity Investments. He’s also become a close friend and great mentor over the years. I am grateful that Craig is in my life and he took those chances on me back in 2006.

If you are looking for your first Private Lender, you might consider instead seeking a partner who can solve that issue for you. Every real estate deal has 3 components: Money to Close, The Deal, & Operations (renovation/management). Finding the Deal has been my superpower and aligning with partners for the money & operations has led to scale.

Private Lending Webinar

In the next few weeks I am considering hosting a Private Lending Webinar where I’ll cover the Private Lending from both the Lender’s Perspective & the Rehabber’s Perspective. If you’d like to attend the Private Lending Webinar, at no cost, please reply to this email and let me know you’d like to attend.

When it Comes to Short Term Rentals, Location is Everything

Well, that’s no secret, right? Location, location, location is THE real estate dictum in use for all of history. I’ve never been bullish on Short Term Rentals, at least in the Airbnb sense of short term. In my experience, there is one market I love for short term rentals.

Below you’ll see an Airbnb listing from-which is a great location for rental income, and for taking vacations – since it’s 15 mins to Clearwater Beach, FL. It’s a great house too, since it has the pool, putting green, pool table, etc. There is one problem with this location though-the neighbors aren’t keen about the Airbnb in their $700K+ neighborhood.

Long term, the risk to most Short Term rentals are neighborhood opposition. That often leads to the outlawing of such property uses through zoning restrictions. I’m not comfortable with this type of long term risk for short term cashflow.

Click to View this Florida Airbnb Listing

Which brings me to a better location for short term rentals – the Jersey Shore. I grew up outside of Philadelphia and there is no better feeling than rolling down the windows as you cross the bridge into any of the shore points and smell the Atlantic Ocean for the first time of the season. That feeling, that smell-THAT is summertime to most of us who’ve grown up on the East Coast.

The Jersey Shore includes most of the barrier islands along the coast going up to New York, but me, being from Philadelphia, think of this area as the Jersey Shore. Sorry Snookie-to me, “Jersey Shore” is NOT that TV show on MTV…

The reason I believe beach houses in NJ are a better location for short term rentals than Florida is that all of the neighbors already know what’s going on. People have been renting houses for a week at the shore FOREVER. No neighborhood opposition -it’s always been a Short Term rental town. There is near-zero risk of the towns outlawing short term rentals here.

Podcast Coming Soon: Redeveloping Dying Shopping Malls Part 2

This week I interviewed Saul Zenkevicius on the REI Diamonds Show. Saul is the founder of Z Equity Group, a commercial redevelopment firm currently focused on bring dead malls back to life. Saul is Rafik’s Partner-you might remember me mentioning Rafik last week. Saul runs the leasing machine which drives the value of Brait Fund & Z Equity Group by quickly leasing 200K-300K of Sq. Ft. every 6-12 months.

Saul & I were in business flipping houses in Miami back in 2017, but he graduated to very large industrial properties to obtain scale Saul actually invited me as his guest to the Commercial Academy back in 2022. I will attend the Cleveland event – August 23-25th. If you’d like to be my guest, please email me using the subject line “Commercial Academy”. Aside from ICSC, the Commercial Academy is one of the only places I know to meet commercial operators, developers, and even passive investors. The cost to attend is $897.

30,000 Sq. Ft Warehouse Deal for Sale – Memphis, TN

Interested in this deal? Call or Text Hannah Branham – 404-754-5829

203 E. Trigg Road
Memphis, TN 38106

30,658 Sq. Ft. Warehouse
Up to 8.94 Acres Available (Survey Below)
Railroad Spur (currently buried, not in use)
Zoned EMP (Industrial)
Delivered Vacant at Closing
Small 2nd Position Seller Financing Available
Full Set of Photos

Price $1,275,000

This site is located in South Memphis along South 3rd Street (bottom left of photo) which is a raised roadway. This provides an element of privacy from the region while offering the potential for signage with 16,940 cars per day. This property offers nearly 5 acres of vacant & flat land which might be developed or used for Truck Parking or other Industrial Outdoor Storage.

203 E. Trigg Road, Memphis, TN 38106

Up to 8.94 Acres Available – Zoned EMP (Industrial)

Jewels of Wisdom Newsletter – Here’s Why am I Personally Investing in Commercial Real Estate

Why Commercial Real Estate

Back in 2006, when I first dreamed of doing a real estate deal, my mentor at the time owned 40-50 rental houses in the neighborhood I grew up in outside of Philadelphia. That became my goal too. Last week when he & I were talking he mentioned that he has since sold them all. Now he’s the chairman & founder of a hedge fund with about a billion under management-and a lot of that is commercial real estate. His goal now, in his 60’s, is to simplify his personal portfolio in advance of someday leaving it as an inheritance. This is my plan too.

This illustrates the reason I am investing in commercial RE-to consolidate & simplify my portfolio over time. I have houses in Philadelphia & apartment buildings in Chicago and I’m going to sell them all and doing a big 1031 exchange into a new build beach house in Avalon, NJ. Do you happen to have a tear down for sale? Ideally Oceanfront?

***About Avalon-for our readers around the U.S.*** – The name “Avalon” comes from the King Arthur mythology and was the island where the Excalibur sword was forged. In modern history, in New Jersey, Avalon is a town on an Island shared with Stone Harbor. If you vacation here you might meet a commercial real estate developer in the line behind you waiting to get ice cream – this actually happened when I was there last week. He shared that his house on the Island was the best investment he’s ever made in his life.

Commercial real estate investing offers consolidation. Instead of my 25+ tax bills, insurance bills, mortgages, etc, I’ll buy a house, tear it down and build a high end vacation home which will rent all summer long for $25,000 per week, or more. One tax bill, one mortgage payment, one insurance company. And I might even get to go down and stay there every so often. I guess this is actually still a house, but the cost basis above $4M feels more like commercial to me.

Here’s One of Our Recent Shopping Center Deals

Here at Diamond Equity, we buy retail & industrial property, but would consider any commercial property offering value add potential. Every deal must have an immediate pathway to significantly increase the value of the property within 24-36 months.

Right now we own this 62,346 sq. ft. retail center in Vegas. It was 55% occupied when we bought it and is now 93% occupied. This deal has worked out well for us so far over the past 36 months of ownership – it took about 18 months to stabilize, but now pays consistent monthly distributions.

I’d buy this type of deal again located in any U.S. market with 50,000 people within 3 miles, Household income of $50,000 or more, and 22,000 vehicles per day or more. It’s just gotta have some upside!!

Do You Have a Deal For Sale?

Here’s our Buy Box

Retail Strip or Shopping Center
Industrial or Flex Warehouse20,000 – 200,000 Sq. Ft.
Population 50,000 or more in a 3 mile Radius
Bonus: Located 3 hours from any of our offices: Atlanta, GA, Chicago, IL, or Philadelphia, PA

Podcast Coming Soon: Redeveloping Dying Shopping Malls

This week I interviewed Rafik Moore on the REI Diamonds Show. Rafik is the founder of Brait Capital, a commercial redevelopment firm currently focused on bring dead malls back to life. One of these projects closed about 18 months ago is now 75% occupied through his repositioning strategy. This podcast will be released in the next two weeks, so keep an eye out.

Rafik is also a friend whom I met through the Commercial Academy Mastermind. We will both be attending the Cleveland event – August 23-25th. If you’d like to be my guest, please email me using the subject line “Commercial Academy”. This group has been instrumental in Diamond Equity’s rapid results in the Commercial Real Estate arena. It’s another level compared with flipping houses!!

Development Deal for Sale – Marietta, GA

Interested in this deal? Call or Text James Harris – 770-861-3311
23XX Powder Springs Road SW
Marietta, GA 30064
4.65 Acres on the Hard Corner at Wood Meadows Road
Demographics:

3 Mile Population 62,329
3 Mile Daytime Employees 18,631
3 Mile Median HH Income $69,891
2022 Powder Springs Traffic 22,247 vehicles per day

Price $865,000

The site is currently zoned for single family residential, and works at this price. Successfully rezoning this parcel will either yield more units (townhouse upzone) or 2 commercial pad sites with residential townhouses in the rear (see 2nd photo below).

23XX Powder Springs Road – 4.65 Acre Parcel, next to Retail Strip Center