BiggerPockets Real Estate Podcast - 253: Recession-Resistant Investing & the Benefits of Buying Shopping Centers with David Puchi

Episode Date: November 16, 2017

Most of the guests here on the BiggerPockets Podcast have focused on residential properties—but there is a whole different world to explore in the commercial real estate space. That’s why we’re thrilled to bring you this powerful interview with an investor who’s truly crushing the commercial real estate industry! Our guest today is David Puchi, an investor who owns more than 50 neighborhood shopping centers (“strip malls”) throughout the United States. David tells how he built this massive portfolio and why he believes it is one of the best real estate niches to be a part of. This show will open your eyes to an exciting world you never knew existed. In This Episode We Cover: How David started real estate investing Why he brought a bank guarantor partner into his deal How he turned a shopping mall around What the “Amazon proofing strategy” is What he looks for in commercial properties The challenges of this strategy Who to hire to start investing in shopping centers What synergy is in reference to tenants How one tenant can affect the whole center A passive way to invest in triple net properties Tips on how to finance these deals Where he finds his deals How to analyze a neighborhood for shopping malls Tips for performing due diligence for this kind of deal The metrics you should study to figure out the health of a tenant Where he sees his business in the future And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Marketplace BiggerPockets Podcast 250: Grant Cardone on Multifamily Investing and Why You Should Never Buy a House! Books Mentioned in this Show The Book on Rental Property Investing by Brandon Turner Fire Round Questions I am planning to build a 10~12K sqft strip with 6 units, which type of business will be well fit? What is protocol for charging and collecting overdue rent? How to lease retail store to franchise How to determine value of a commercial property w/ no list price? Adding appreciation to a commercial property Are current tenants a big factor in the sellability? Tweetable Topics: “Having reasonable leverage makes more sense than over leverage.” (Tweet This!) “Basic property management experience is a great launching pad in owning commercial properties.” (Tweet This!) “You can’t rely on the market to force appreciation.” (Tweet This!) Connect with David David’s Company Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 253. There are great neighborhood shopping centers in low-income areas. There are great neighborhood shopping centers in middle-income areas or in high-income areas. So it doesn't really matter the income level because there are tenants to serve that neighborhood. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

What's going on, everybody? This is Josh Dorkin. House to the Bigger Pockets podcast here with my co-host, Mr. Brandon Turner. What's going on, man? So here's a funny story. So last week here on the podcast, at the end of it, you made fun of something you said there was a white sticker on my shirt. I did.

And I looked over and I had no idea what it was. and I sat there looking at it, trying to figure out. You don't have one, don't worry. No, but I go in the house and my wife says, Brandon, your shirt's on Inside Out. So apparently what the sticker was was on like the inside of a shirt. I don't know, like, anyway, apparently for the entire pod,

if you go back and look at the YouTube version, people, my shirt was on Inside Out. That's life with a 16-month-old baby, apparently. That's just, I'll just stop there. I'll just stop there. Anyway, so how you doing? What's it do? Oh, man, I'm good.

I'm good. You know, things are, things are going well. I'm pumped like, you know, it's not every show because we've done the show 250-something time. So, you know, there is some repetition from time to time, at least in terms of ideas and strategies. There's always something new, but. Today is all new. But today, man, yeah, totally, totally new.

Great. Great show. Some cool ideas. I mean, a guy who's got a fantastic strategy scaled a monster. business. Yeah. And just wicked smart. But we have to put it like a disclaimer or warning at the front of the show.

Like like this is one, you know, at the end of the show, you're going to be like, oh, I got to do that. I'm going to go do that. So this is going to blow your mind. You guys are going to love this. So warning, you're going to love this. Morning. Shiny object syndrome.

Yeah. You might want to change your real estate strategy after hearing this. Yeah. It's true. It's good. I mean, it's good. But obviously, you know, the key to success in anything, it's, you know, particularly. particular real estate is figure it out and do it and do it and don't let all the shiny objects

kind of get in your way. Yeah, so this might become my new thing after mobile home parks. I got to try that first. Yeah, there you go. Awesome. All right. Most investors spend more time chasing deals than reviewing their insurance. But a quick coverage check can be fast, easy, and one of these smartest ways to protect and even improve your property's cash flow. As the months get colder, frozen pipes, icy walkways, and seasonal wear and tear can increase the likelihood of claims. And traditional insurance companies aren't always built to handle these claims

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That's n-r-e-ig.com slash B-P-Podd. Now, I think normally we do our little song and dance before the sponsor. Yeah, we got to do it now. So it's our, you jump the gun. Quick tip. Quick tip. All right. Did I ruin you?

You totally wrecked it. Oh, well. Let it go wreck it, Ralph. All right. Today's quick tip. is something we've talked about a lot before, but not everybody takes advantage of it. And we have a really, really awesome marketplace on Bigger Pockets

that is used for both deals and for other opportunities. Product services. Yeah, product services, whatever. Jump in there, check it out. It doesn't take, I mean, everybody on Bigger Pockets, free or paid can go in and surf around the marketplace, see what's in there, see if there's something that works for you. Make sure you set up some keyword alerts for like your city name

so you get notified of Marketplace's deals in your area. But anyway, go ahead and check. check it out. Anybody can do it. And if you are a pro member, you can jump in there. I can make a listing. I can make a list. Before today is over, go make a listing for something that you need, some kind of property you're looking for or... Haves wants, things like that. So jump in there, make a listing. There you go. And one more thing. If you are a licensed real estate agent, you can post your listings for free on the platform. So yeah, get out there and make it happen. It's a great place to get exposure. So cool, man. Well, this is show 235 of the Bigger Pockets podcast.

No, it's not. That's not even close to being correct. 253. Holy. Oh, my God. Total dyslexia. Wow, that was really good. You're getting really old.

It's the show 253 on the Bigger Pockets podcast podcast. Wow. And you can check out the show notes at biggerpockets.com slash show 253. That's 253. Be sure to check that out. Let's get into this, man. Today's, today's guest is a guy I've known for a, number of years. Our kids go to school together. And I've been fascinated by his business model.

And I'm excited to have him on the show. All right, David. Welcome to the show, man. It's good to have you here. It's nice to be here. Yeah. You know, this is kind of weird because normally on these podcasts, like I know the guests ahead of time a lot of times because like I don't know, I traveled more than Josh does. And so I meet people. I invite him on the show. But this is weird. You guys are like BFFs and I don't, I don't know what's going on. So how do you lost? I am. It's weird. I interview. you like this man. You don't know what the hell you're doing. I know. I have no idea what I'm doing, which is actually most of life. So how do you guys know each other, Dave? How do you know Josh? We have children that go to the school together. So I see Josh every morning at the drop off.

Ah, nice. In our underwear. Yes. Wow. Wow. I don't know. This got weird. This got really weird. It's a special school. But you, I'm assuming besides being part of the dad's underwear club, you are also, Somehow involved in the real estate business. Is that correct? That's right, Brandon. I am. All right.

So why don't we... He's got a good voice for radio. I just realized that. I mean, this is quite a Facebook, too. Yeah, that's great. Facebook. All right. So let's go to your story.

I mean, how did it, let's go way back in the day. How did you get started with this whole idea of real estate? Yep, sure. So I came to Denver about 35 years ago and went to the University of Denver for undergraduate and law school. And when I graduated from law school, I worked for a law firm for a few years and then went to work for a private real estate developer. So I kind of left the practice of law and then worked for a guy who bought a bunch of buildings actually after selling a high tech business. So he had a bunch of cash in his pocket and he bought eight buildings and I went to work for him. And my career in real estate went from there.

Okay. So let's talk about your very first deal, like that you did, you know, not for hand, Like for yourself? Like, how did you get into it? Yeah, no. So I ended up leaving his firm and starting a third-party property management company. So we managed retail, industrial office buildings for other people. And one of our clients sold his building.

He had a million bucks and he wanted to buy another building. So my partner and I chipped in the sweat and he chipped in his million bucks. And we bought a building together. And we ended up running it for him. and it was a successful investment for us and for him and venture for us. So we got going with a client who's actually still with us today. All right. So this guy, he's got a million bucks he needs to spend.

He needs somebody who's going to put the time and energy in. You and your buddy, your partner provided that for him. So what did you do? You managed the building. Did you identify it or had he already found the building? Yeah, we identified it. And then we were both former practicing lawyers. So we ended up putting the transaction together for him.

And kind of a funny part of the story, which is a good lesson for us, is that we bought the building. And the next day, there was a moving truck in front of the building. And one of the 25 tenants was moving out the day after we bought the property unannounced. So they basically left in the middle of the night. And we had to go from there. We had to backfill that space and do a little bit more work than we thought. But it ended up working out okay. School of Hard Knox.

Yes. Yep. Yeah. You can never do enough. Yeah, you can never do enough due diligence is the lesson there. Nice. Was that residential then, I'm assuming? No, it was an office building.

Oh, okay. It was a multi-tenant office building. Okay. Now, most people don't get into real estate that I know that we've interviewed anyway. They don't jump into all of a sudden commercial real estate. They jump in, they know, but they buy a house. and then a duplex. And like, why did you skip that whole, that whole phase and just jump into the,

the big boy club? Yeah, well, I was pretty much because of my background, practicing law. I worked for banks and real estate companies, developers and pretty much all commercial, though. So I had that transactional commercial background going into it and really never thought about residential because of that background. Okay. Got it.

Got it. So what did that look like? you know, the million dollar office, it was a million dollar office building, yeah? No, yeah, it was actually three. So he, his million dollars was the equity. Oh, that was equity. Okay. That's right.

And we found a $2 million loan to buy it. So we pretty much put the whole transaction together for him. And, you know, and that's so the sweat that we put into the deal was all of the related functions putting together that transaction and then running the building. Yeah. What I love about this, I want to pull something out here. Like, people often say that you can't do deals without any money. Like, you have to put money into it. No money down is a scam or whatever. But you, this is a good example where, like, you didn't take necessarily your cash. Somebody else brought the cash for the down payment. Correct. And you brought your unfair advantage, which we talk about all the time here. You had something that you were good at. And that was managing properties and being a lawyer. And so you brought that to the table. And that took the place of your cash. Correct. Correct. Yeah, I love that. Whether or not people. Go ahead. Yeah. And. And I would argue that most people when they're getting going start with no money whatsoever and use that unfair advantage to be able to, you know, or bring in an investor. So it's, you know, a lot of it has to do with using other people's money to start a career

and to build off of that career. Yeah. And the way that you did that, I mean, I've structured numerous deals that exact same way. I mean, on a much smaller scale with like duplexes, triplexes, but I'll find a partner who will bring in the down payment. They don't have to have all the money. they don't have to be super rich, but they'll bring the down payment and then get a loan and they'll have, they'll have the ability to get a loan. So when I, when I was struggling, I had no job and no credit,

no whatever. I wanted to buy triplex. So I just found a couple. They didn't even have any money. They had a line of credit though on their house. So they used a lot of credit. We split everything 50, 50 at the end, but I was no money into the deal. And so, like that, that strategy works no matter what level you're at. Well, the everything that we've done and it kind of goes along these lines is that we've had partners come in who have been basically guarantors on loans. So we didn't have the balance sheet early on to be able to finance a property. So we brought in a partner who had the balance sheet. They didn't put in any cash, but they guaranteed the loan, which got the deal off the ground.

And they got a piece of the profits, basically, you know, as we manage and then sold the property. Oh, man, I want to dig it on this because like yesterday had a conversation with commercial lender. And this came up as like, I don't know if I could personally, like I'm trying to, you know, get qualified, you're trying to buy a large property. I don't know if I can do it. I don't know if I have the net worth to be able to justify a large loan. And so I'm, I yesterday was like, oh no, I don't know what to do. And now you brought this up. So I didn't even know that was a thing. You can bring in somebody as a guarant, a guarantor. Is that the word? Yeah. And, yeah. And how does that, I mean, like, what kind of piece do you give a person for doing that?

Well, yeah, I mean, it'll definitely be negotiated. transaction. Ranges, ranges. Yeah. But, you know, I think we did that twice kind of early on. And the guarantor partner received a third of our share of the deal. So, you know, and in our properties or in our business, how we work is that we'll bring in investors, we'll have what's called a promote, which is if we hit certain hurdles of return for the investor, then we see a share of the profits after you sell a property. So these guarantee partners

ended up sharing and our share of the profits once we sold the building. Okay. Yeah, that makes sense. And they didn't have anything to do, really, except for to put up their balance sheet and it ended up working out

to everyone's benefit at the end of the day after we sold the real estate. What's the risk to them for putting up their balance sheet? That the, well, that the property goes under in foreclosure and then the bank goes after them. So they're actually on the,

they're on the hook for it. Yeah, they're on the hook for it. That's exactly right. Yep. You got it. Okay. So, yeah. So what I need to do then is if I'm going to, if I'm going to go get a four or five million

dollar loan on a property, I need to find a, okay. I love that. I love, I love these podcasts. Talk out loud. This is so good. This is awesome because like, seriously, yesterday I got to this point where I was like, I don't know how to solve this problem because I don't have the net worth to justify a four or five million dollar loan.

But I'm considering some properties that are that size. And so what do I do? And, you know, that makes perfect sense. I just never thought about that way. So thank you. This whole thing has been worth it. We can go home now. There you go.

Great. All right. All right. I want to talk a little bit about like, let's go to the end of your story real quick. I mean, like overall, what have you done? Like what's your, what's your thing today? Like units, numbers or or anything like that? What can you tell us about yourself?

Sure. So now over almost 20 years, we've built a portfolio of over 50 properties. And we own primarily, well, actually exclusively now, neighborhood shopping centers. So if you can, envision a 100,000 square foot multi-tenant neighborhood, everyday goods and service shopping center. That's well-located on a good street, good corner, whatever. That's the type of property that we own. So over the, yeah, over these years, we started out, we did some industrial, some office, all commercial all the time. Now we've just gravitated solely into the space of owning neighborhood

shopping centers. Yeah. And why is that? Why do you guys decide that that's going to be the model? Well, we have developed it over time. So I'll go back to our second deal that we ever did. And it actually started with a tragedy that's kind of poignant for today in America. But we bought a shopping center that was the site of a shooting. And in Denver, it's kind of a famous shooting. It's called the Chuck E. Cheese Massacre. A guy went in and gunned down eight of his fellow employees.

So, yeah, and it's just a brutal story. I had a Chuckie Cheese, obviously. So about three years later, we bought the property out of foreclosure, basically from an insurance company that didn't even know that they owned it. I mean, it was a total disaster for them. So we bought it, but it was really well located on an intersection in Aurora, Colorado. So we bought the property. It was in pretty bad shape. The Chuck E. Cheese was still vacant and a disaster.

But we had a couple of good tenants in there that we could build off of. So we ended up turning the shopping center around. and doing what really well financially. We put in a Chapulte, and there was the kind of the beginning of a whole foods. We had a coffee shop, ice cream shop. We had a super salad. So we had really good tenants in it by the time we ended up selling the property. So what it really taught us was if we bought really well-located neighborhood shopping centers

with everyday goods and services in it, they could actually survive even a terrible thing like a shooting. And then as we went along, through the recession of 2008, 2009. We saw that our tenant base was really resilient to recession. So the examples that I use are you still get at your haircut, you know, and good times are bad. You're going to buy a six-pack of beer and good times are bad. You're going to go to the subway and good times are bad. Get your nails done.

Go to the health club. Whatever it is, all that everyday goods and service. So we found over the past 20 years after that kind of inauspicious beginning was that, you know, these shopping centers are really. really, really resilient, and we still see that today. So you've kind of found this Amazon-proof model where, you know, it's not necessarily retail that that could be taken out by these online guys. It's stuff that you have to have a neighborhood.

Like, I'm not going to let my wife cut my hair. I'm going to the barbershop, right? Yeah, that's correct. And Josh, you'll like this, but we have a new tenant in one of our building. It's a pickle shop. Oh. And I swear, they sell pickles. And, you know, I heard just saying it's hard to buy pickles on it.

And it's really, it's a great concept. It's in a shopping center that we have in, in Santa Fe, New Mexico. David, have you ever been out to eat with Josh? Have you ever been out to eat with Josh? This is why he brings up the whole. This is a great pickle incident of October 2017, because there was probably a great pickle incident in September and August and July. I was going to say, like, I've been out to eat with Josh.

numerous times where he says no pickle and a pickle comes. And you should see the belittling he gives the waitress. I do not belittling. It's like, are you the most stupid person? It's not that bad. Well, it's close though. I've seen it. Yeah, it's close.

Hey, listen, we were at a nice restaurant, Dave and I. I was very clear about no pickles. And they had taken, they put the pickle on and then they took it off, which is like the worst side. Yeah, it didn't go well for them. Did you belittle the lady? So Josh is not going to go to our pickle shop. I did get a free meal out of it. I did. I did. Yes, I did. What's funny is that we're not the only ones to have pickle stories with Josh. Like I've heard other people tell me about Josh and his anti-pickle stories. We might want to, we could write a book actually. The pickle stories of Josh. There you go. All right. Stay off on my pickles. Would you?

All right. So this strategy, quote, Amazon proofing is not just though an Amazon proofing of a business model, right? I mean, you're also creating a recession-proof model here, relatively recession-proof model as well, correct? Right. That's exactly right. And as we market our company, we talk about our tenants being both recession-resistant and Internet sales resistant. And, you know, the big story today, really with commercial real estate, especially retail is the decimation of traditional retail. And you read about every day. And, you know, some of the big names that we've grown up with and have lived with are going away. And they probably should go away because their models are, like I love the story of Sears. 80 years ago, Sears was disruptive because they came out with the first catalog.

So it totally disrupted the retail space, right? now they're dead because they haven't been able to really keep up with, you know, everything that's going on with Amazon and such. So, but yeah, that whole side of the retail business is really suffering right now. But the everyday goods and service shopping centers are thriving and small businesses actually thriving in America right now. That's cool. Can you walk me through like the typical numbers? I mean, you can, you can do general stuff. But like, what do you buy a shopping center for?

or what do you have to fix it up? I mean, what does they rent for? I mean, how does that look like? Cap rates, all that stuff. Yeah. So I'll go in a little bit of where we buy because we buy in the middle of the country. So we're not buying on the coasts. As you can imagine, buying on the coast is just more expensive and there's more competition.

So we see less competition in cities like Omaha and Kansas City and Nashville and Memphis and Indianapolis. And if you go into the numbers, we're buying at about at 8% capitalization rate. So that same property in L.A. is much more expensive at like a 5% capitalization rate. In Denver, we actually don't own anything in our hometown because it's too expensive here. It's probably a 6% capitalization rate. So we're buying value kind of right off the beginning. We have the same tenant base, and it's in a great city, but pricing is just cheaper.

There's less competition. The folks in New York really don't know where Des Moines, Iowa is. I mean, they fly over it all the time and they might look down and see whatever, but, you know, they don't really, they don't really care about Des Moines. We do. We love Des Moines. I mean, it's an awesome community. So 8% capitalization rate will typically use leverage. So we'll get a bank loan for, let's say, 60% of the purchase price.

The deal size will be somewhere between $5 and $8 million. It'll be maybe a 75 to $100,000 square foot shopping center. It'll have multiple tenants. So we'll have different businesses in each of our buildings. And that's important because let's say a radio shack goes down. In our portfolio, we had one radio shack out of 40 properties at the time, so it didn't make any difference to us. I kind of joke around that what would really hurt us is if people didn't get their haircut anymore,

didn't buy booze anymore, didn't buy subway sandwiches, and didn't work out at a gym. So if all four of those things happen, then we're in trouble. See under the earth, right. Yeah. But yeah, so that's not going to happen. Yeah, so, I mean, a lot of different things have to happen. When you're looking at these neighborhood shopping centers with many tenants, many businesses, basically many income streams coming out of it.

You know, the other thing that we look for is that we're in, let's say, class B or C centers and not A centers. The theory being that you can buy a really nice A shopping center, beautiful, brand new, $30 square foot rents. But like, where do you take it from there? It's an A. So do you go like to A kind of plus? or how much value can you add. We like taking a C to a B or B my S to a B. Our rents are, let's say, $12 a foot, not $30 a foot.

So if times get tough, then we might discount the tenant to $11 a foot, as opposed to if you have $30 a foot rents, then you might be discounting to $20 a foot. So it's just a less volatile space, I guess you can say, being in the middle of the country with this type of a tenant base. Yeah, that's great. We, you know, we did a show recently. I forget who it was, Brandon, where we, no, it was Cardone.

It was the show with Cardone where we were talking about finding kind of recession-proof housing stock. And it was kind of the same thing. It was that class, Class B, you know, 800 to 1,200 bucks a month rent. Seems like a very similar model except for the retail space. It's great. Brilliant, brilliant strategy. Have you, I know we have a ton of questions I'm looking at that we've been writing as you've been talking, but what are the downsides that have come from this strategy?

You know, what negatives beyond, you know, a radio shack going out of business or something else? Are there any things that people would want to look out for? I think that one of the challenges is how do you manage portfolio like this in different locations, different cities throughout the United States with multiple tenants. So it's a very management-intensive business. You really need to have some type of an infrastructure to do that. Now, what's interesting about what's happening in our business today is that most of the shopping centers that we buy are owned by single owners and their individuals between the ages of 55 and 70. So they're kind of aging out.

And, you know, Joe owned the 100,000 square foot shopping center down the street. And he could do that really well. I mean, as his baby, you know, provided a great income for his family. all good. But, you know, she's getting older or she's getting older. Kids don't necessarily want to manage that shopping center. So I don't really want to take a swipe at the younger generation. But typically the kids want the money.

They really don't want the management headache, right? Like free money, no work, right? Yeah, that's it. Yeah. Was my check for breathing? Yeah. Yeah, that's it. So, you know, as America's aging, right, these shoving centers are owned by individuals,

one at a time. And that's great, you know, but that population of owners is getting older and they're retiring or they're dying or they're doing whatever. So we see good opportunity for a company that has the infrastructure to be able to manage multiple properties to be able to jump into the space. What does your infrastructure look like? Like, do you have a big team? How many employees do you have?

We have 60 people that work with us. And it's been, again, it's management. intensive. So property managers and leasing managers and accountants, other parts of the finance part of our business are huge. So building that infrastructure has been really important. And luckily, I have a partner who is a business guy who was able to build that structure. I'm not so much of a business guy. I mean, I graduated with a political science degree. So, you know, I was- Me too. We know nothing. Hey, we don't know anything. That's exactly right. I think Brandon has a history degree, which I minored in PolySci.

You know, so it counts. Hey, Brandon, Brandon, you're frozen. I don't know why it does it. All right. Sorry. All right. Anyway, I said I minored in PolySai, so I'm halfway there. So.

Nice. That's it. All right. So it's pretty, it's again, just property management intensive of our business. And I mean, that it's just a necessity. So you have to build that infrastructure. So if I was going to dive into this business, where would I start? Obviously, you would go and you'd find the first property and we'll dive into how to find

these types of opportunities in a little bit. But I've got my first shopping center. I'm running it by myself. And I want to scale. I want to get up to 50 like you guys have in your organization. Who's the first person you would hire? And how would you start to internally kind of see the development of the organization? Well, and I'll tell you what we did, which I think makes sense today, is that we hired a really good leasing broker to lease the property for us.

So we hired a guy against this Chucky Cheese property who knew all the tenants and was able to bring in really good tenants to the property. So seeing how he brought tenants to our property and his experience really helped us to be able to get a sense for really what would just is the most important thing is your revenue or your tenant base. And how do you bring them in? How do you attract them to your property? So we were able to do that through hiring a really good broker. You know, the property management side, we had experience in that prior. And I guess it's a little bit more block and tackling. There's maybe less art to it. My property manager is going to kill me for saying that. But, you know, kind of getting that revenue side or getting those tenants and getting the right tenant base, the right synergy between the tenants is so important that I would

start from there with your first shopping center. Got it. And let's talk about that for a second, too. Synergy between tenants. I buy an apartment building. I get to deal with headaches. You know, if there's walls between units, you're dealing with headaches, right? You got tenants complaining about each other.

Do you tend to see that in shopping centers as well? And what is that synergy you're referring to? Yeah, when we buy a shopping center, we'll go about this process. We just call it Weeding the Garden. And we'll take a look at the tenant base and say, okay, well, are these tenants synergistic to each other? Will they help each other's businesses grow? So, you know, if you have a liquor store and a hair salon and a subway and a T-Mobile shop and a health club and an urgent care, if you have that tenant mix, it generates a lot of traffic for your property.

it gets tougher, for instance, if you put a church into a big space and a property, because there's only people there on Sundays. So it's not generating a lot of activity for the shopping center. You know, we have to look at the parking lot and, okay, we have restaurants. They're going to fill the parking lot at night. But during the day, they're not. So the other tenants have the parking lot. So that tenant synergy, having traffic flow, being able to build the tenant base is really important. I love that. It's funny. I know nothing about this business until today, well, until you and I've started chatting about this stuff. And I never even thought about that. I mean, the idea of I've been to, I've been to a lot of strip malls. Is that, is that disrespectful to call the strip mall? Okay. No, I've got to call a strip mall all the time. Yeah. Yeah. That's good.

Not, yeah. So I've been to, you know, tons of strip malls. And a lot of them just get it wrong. I mean, like, you know, the parking, you're right. There's like too many. restaurants that are in this strip mall and there's not enough parking so you're forced to walk a quarter mile or the synergies just aren't there. So you're not going to buy something where those synergies aren't possible, I'm assuming. And you'll buy something where you could change them. If the synergies are busted, you'll get in there and kind of fix it up. Correct. That's exactly right. Yeah. And with the typical mom and pop owner, you know, again, here she has done really good job of creating income for his family or her family, but they may not have been thinking about really optimizing the synergy between the tenant base. And we'll go on there and do that.

We have the luxury to be able to do that because of our structure and capitalization and all that type of stuff. So we can do that. But yeah, we're always, that that's basically how we add value to a property is to not only change around the tenants a little bit, but at the same time, we're increasing lease rates because tenants are more successful so they can pay more rent. we just looked at a property today that the prior owner put a Starbucks in with a drive-thru on the corner and it completely changed the complexity of the property. Now, the owner is sick, so they have to sell. So we're going to buy that property kind of halfway through this process and continue to weed the garden, fix it up, add value. But he kind of got it started by putting that Starbucks in.

So there are different entry points, let's say, into the real estate. Hey, Brandon, I know you have a question before you dive in. I'm curious very specifically about the property you're talking about. What exactly did the Starbucks with the drive-through due to the synergy? It created a, I was going to use a off-color word. It created a lot of traffic flow because it's packed all the time. It's literally packed from opening up 3 o'clock in the afternoon. And the drive-through is packed.

So you have all those people running around through that center now, parking, looking around, seeing who the other tenants are. So that basically is the shopping center's anchor tenants. These are good things. Oh, it's great things. Okay, good. I thought it was the opposite. Yeah, because the more people that you can attract to the shopping center, that's great. And if there's the parking, right, so there's details you have to deal with.

But, you know, this place has plenty of parking. It can fit a bunch of people. Bring in that Starbucks. Just create a whole new level of traffic for that shopping center. Got it. Awesome. So would I assume these are all triple net lease tenants? I mean, they'll take care of.

Can you explain that whether it is for people who don't know what triple net leases? Yeah, sure. Right. So, yeah, triple net lease, the tenant pays a base rate, let's say $10 a square foot. And then they also pay on top of that all of the, their share of all of the expenses for property. So landscaping, taxes, insurance, parking lot maintenance, roof maintenance, all of the tenants share in those expenses. And the beauty of that from a landlord's perspective is that, for instance, if taxes go up,

the tenants pay for that increase in taxes. If, you know, landscaping costs go up, the tenants pay for that increase. So we can build our financial models off of the base rate, knowing, you know, that that's really, you know, that's the set rate. And then the expenses are basically taken care of by the tenant. So we have to administer all that and we have to be competitive to keep our cost down. But it really enters to the benefit of the landlord to have triple net leases. That's fascinating.

I feel like that's where I want to someday get to, you know, because I feel like that's probably the most. I mean, I've always thought it's most passive. And now you're saying it's a very management in terms of business, but that's probably because you have 50 of them. Would that be right? I'm assuming that. Well, yeah. And there's a real passive way to invest in triple net properties. and that's basically to buy a Walgreens bill and it has a tool release, right?

Because you're buying Walgreens credit. You're going to buy it a five cap. You're going to get a 5% return. They pay all the expenses. They pay the taxes for that matter. So you're going to get your check every month from Walgreens. And that's what you're looking for. So there's an easy way to do that, but that's not our business.

And you know, and you're getting 5% returns versus your business. So let's talk a tiny bit about the model. model. I mean, are you, I'm assuming you're doing better than 5% returns on your money here. So how are you getting those returns? I mean, you're buying the lower quality properties. You're fixing them up a little bit, putting better tenants in, raising rents. Is that the basics? Yeah, that is the basics. So as we're going into a property, we want to make sure that we can generate an 8% return to our investors from the get-go. So that's kind of our starting point. And then through all those things that you mentioned, Josh, we're adding value.

So we'll get to a mid-teens type of all-in return as we sell a property, not to the investor. But we've got to add that value. We might sell a pad site, for instance, to a McDonald's in the parking lot. You know, we're going to add tenants. We'll fix the tenant mix. All that type is we'll fix the property up a little bit, make it more appealing, all of that to basically get more rent. Awesome. That's awesome.

Yeah. So you mentioned the 8% return to your investors. Are you syndicating these? Is that how you're putting together the financing on this? Or how does the financing work for these? We have actually a new credit facility, which is kind of interesting. It's very different than what would be a traditional real estate financing facility. It's a portfolio cash flow-based financing facility where our lender will lend to us 60% of the cash flow that's coming from a property.

So it's basically 60% of the value of the property. but they're looking at cash flow as being the underlying kind of collateral for the property. So we've been building our portfolio under this financing facility. Now, it's great about it. And again, you know, it's taking us a while to get here. But it's non-recourse. So there are no individuals on the hook. And it's not secured by the real estate.

So it's basically an operating line of credit off of the cash flow from the whole portfolio. So that, you know, that's kind of 20 years down the line, though. We can grab a facility like that. The normal facility is going to be a traditional mortgage, 60, 70% of the value of the building, secured by the real estate from a normal bank. So that's the more traditional financing. Okay. And are you still using for like, I know it's not traditional, like, but do you have a down payment? Is that where you're bringing investors in as part of the down payment part?

Okay. Yeah, yeah. Yeah. And I think another important part of the model, and for that matter, anybody's model, is to just not over leverage your purchase. So, you know, we're using 60% leverage. So, you know, if it's a million dollar property, we're getting $600,000 worth of financing. And then we're bringing $400,000 worth of equity to the table.

What we saw during the Great Recession is that people leverage things up to 85, 90, 95%. And they were creamed. I mean, they were, it just doesn't work. So having a reasonable leverage in any real estate deal to me makes more sense than over leverage. Yeah. Brandon, when you were at that conference that the Norris is put on out in California. And I think you had said that there was a somebody from Washington who had come in and talked about were at the most leveraged we've ever been, even more so than the Great Recession. Is that right?

Yeah, yeah. I can't remember the economist's name. Some economist. Yeah. So some economy said that we're higher, like residential-wise, like people getting first time, or you know, just mortgages, we're out of higher, higher loan to value average than ever in history, including the great recessions. So like, people are really leveraging high right now.

Which is hard to believe because, you know, you had all the liar loans and all the. Yeah. Yeah. 120% stuff. I don't know. Yeah. How does it. I think it's because FHA got so big.

I think it must be that. Like FHA is really blown up in the past decade. Yeah. Because before they didn't, I don't know, we didn't need FHA. I don't know. That's my guess. But yeah, fascinating. Yeah.

So that makes sense, Dave. I mean, you guys as a means to kind of protect yourself are not over leveraging. You guys are sitting at that 40% into the deal to kind of protect yourself. That's great. So where are you finding these deals? So we have a group of four guys out there scruing around the country, talking to brokers, owners, banks in some cases still, and just trying to track down deals. And we built some systems around that. So, you know, we'll call owners directly. We have very close relationships with the brokerage

community in commercial shopping center space. Brokers control most of the transactions. So, you know, we have really great friends in the brokerage community. And they'll look at a property and they'll say, oh, that's a baseline deal. So they'll show it to us. And we kind of get Again, because we've been out of for a while to the top of the heap as far as seeing pretty good deals, but it's a lot of networking. You know, I noticed just coming in your, you know, one of the mottoes that you have for your firm is to build great relationships, right? And, you know, we have to build great. Yeah, authentic, authentic relationships. So that's what we have to do that.

You know, we're building authentic relationships with brokers all around the country and owners for that matter. So that's really how we find the properties. If you own a short-term rental, here's something worth knowing. Not all landlord policies are built for your type of property. And with holiday bookings, chilly weather, and higher guest turnover, having the right coverage is more important than ever. Steadily offers insurance designed specifically for short-term rentals, covering property damage, liability, lost rental income, and even unexpected issues like bedbugs.

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That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. So what would you suggest again? I'm a newbie. I want to go buy my first shopping center. I love this. This model sounds awesome. what would you tell me to do in order to start building those relationships? Yeah. You know, one of the things that it might be, it's just a different entry point, so just sidetrack a little bit. Sure. There are now through crowdfunding sites and other, primarily through crowdfunding sites,

and even through some of the public non-traded reeds, you know, you can make an investment of a pretty small amount and really learn the business from. that sponsor, whether it's crowdfunding site or the public non-traded rate. If you follow it, you can get a pretty good sense of how these things are run. So that is another decent entry point. And, you know, you're obviously not putting a lot of money in, but I think you can gain a lot of knowledge. And I'm particularly fascinated by some of the crowdfunding sites that have popped up in

the last few years because they're doing a good job of educating people. So that's a really good option. I mean, from there, you know, and I know you have a lot of listeners that own residential rental real estate. I mean, getting that property management experience is huge, just knowing how to run a property. And if it's a house or an apartment or whatever, I mean, you're paying bills and collecting rent. And you need to have vendor relationships. So you need to know the landscaper, the HVAC guy, you know, whatever it is. So that basic property management experience, I think, is a great launching pad.

and owning commercial properties. Awesome. Yeah. Cool. And what about markets? How do you go about, you know, you had talked about looking at properties in the Midwest primarily, as opposed to the coasts for pricing?

You know, the same thing stands in the residential world. Those tend to be the more reasonably priced markets. But how, okay, maybe not how do you pick a market, but how do you know shopping center in neighborhood X is, better than shopping center be a neighborhood X. You know, what are the primary factors? Is it foot traffic? Is it street traffic?

Or is it really, you know, if you get that one tenant that's going to bring everybody in, then that's really all that matters? I think that there are several really important details that we'll look at. So does the property have good access? Can you get in out of it? If you don't have good access, it's, you know, hard for tenants to, succeed? Does it have good signage? What's the traffic count on the street or the corner that the property is on? What does the neighborhood look like? And the neighborhood really needs to be

dense. The income levels could be anything. There are great, there are great neighborhood shopping centers in low income areas. There are great neighborhood shopping centers in middle income areas or in high income areas. So it doesn't really matter the income level because there are tenants to serve that neighborhood. But, you know, we have to just make sure that the kind of these fundamental things are there because it's amazing. I mean, a property can be a half a block off and have bad access to crappy signage. And it's going to fail.

It would be one of these properties that you see that are vacant all the time. There's a reason why it's vacant all the time. And the one across the street is not. So the due diligence part of it is, and we haven't really touched on that, but it's absolutely huge, I think, in any type of commercial property or residential for that matter. I mean, really getting to know the fundamentals of how that property works and making sure that, you know, they fit a model, you know, we have our model, that they fit your model because you have to kind of stick with that.

And so, yeah, the fundamental stuff is really important, Josh. Got it. Yeah. Cool. Any other points of diligence beyond the ones that you covered that you want to highlight? Well, yeah. I mean, you have to look at the physical structure. So you need to know if the roof is failing.

So you either budget for it or have the seller replace the roof. Environmental is important. We run across more sophisticated environmental issues, whether it's a gas station with leaky tanks that was on the property 10 years ago or a dry cleaner that leak dry cleaning chemicals in the ground. That type of thing is very important. That can really sting you if you don't have. Preper environmental due diligence. So the physical part of it, as well as the location,

and then the financial due diligence on every tenant. So we interview every tenant and we want to see if they're going to stay or they're going to go. And we take a pretty educated guess on whether or not they are going to stay or they're going to go. So they're challenging part of our business because some tenants don't speak English and we're more of an English-speaking company at this points. So we have to kind of decipher that tenant and what they're saying, whether or not they're lying, whatever it is. You know, one of the things that we see is that tenants very rarely say, oh, we are doing so fantastic as we're buying a property because they know that that's a cue for us to raise rents. So, right? So I'm not going to say, oh, we're just, we're just hitting it out of

the ballpark. This is the best place ever. There's some, you know, tenants are smart. They know. So that financial due diligence, that tenant due diligence, the physical, all of that is very important. So we have probably a hundred point due diligence list that we go through. Wow. Yeah. So do you have any, like, let's say you're looking at a strip mall and you want to buy one. And there's a lot of tenants in there. You want to know the stability of those tenants, I feel like.

But you, like, you can't go and ask them for their, you know, P&L statements or anything. I mean, like, can you or do you? Oh, yeah. Oh, yeah, we do. And sometimes they'll share. Sometimes they don't. In many cases, the lease will require that the tenant report sales. So, you know, we have metrics behind, okay, you know, what is a good restaurant?

4,000 square foot restaurants should have X amount of sales. So we use those metrics to figure out the health of the tenant. And again, you know, I guess the regional or the national credit type of tenants that you see more often will report. sales, the really small mom and pop businesses, I mean, they might be doing their books on a napkin. So you're not going to really get all that accurate of information. But, you know, we'll sit in the parking lot for a day or two. And so you is busy. And we'll do, you know, analysis on, you know, kind of gaps in the market and whether or not a tenant is filling a gap.

So there's a lot of different things that we've developed to determine whether or not that tenant has some legs to it. Yeah. Yeah. That's also what about evictions? I mean, is that is that a problem? Is that an issue or, you know, rare? Yeah, I know. It's, I mean, so it's probably very different than a typical residential property.

I mean, if somebody doesn't pay the rent, we can kick them out. So now, you know, with that being said, we'll take a look at that business and say, okay, well, it seems like you're struggling. Do you need a little break to get through, you know, the death in your family, your brother getting ill or whatever, somebody else coming down the road. We'll give them a break to keep them going. But if they're failing, we can evict them pretty easily. And is it similar to like a courthouse, you know, you take them to a, you know, like just a

or do you just tell them, hey, give me the keys. You're out. Yeah, we just say, hey, give me the keys. And I mean, you could get into some type of litigation, but that rarely happens because one, Once the tenant's done, they're kind of done. And, you know, everything that we found, though, which is that a typical tenant, let's say it's a liquor store, and they're on a great corner, the last thing that they're going to do is not pay their rent because they want to stay there. Now, they might, you know, Uncle Joe might get fired for a little bit because the business has a glitch. But Uncle Joe can come back a couple of months later, but they're going to still pay their rent.

So, yeah, so what we saw during the recession, I mean, our, our default rate today is 0.02%. So it's, it's amazingly small when you consider, yeah, when you consider our tenant base. So, you know, a fifth of a point, basically, you know, is our default rate. I mean, it's, it's pretty amazing. So we have a pretty solid tenant base. I mean, these people stick around. Yeah. That's awesome. That's awesome. I've said this before, but like, Every time we do a podcast about a new topic, I'm always like, oh, yeah, I'm totally doing this. Yeah. I love this idea. So, well, you got, you got a 1031 coming, but you can't. I know. I get 1031 into a strip mall. I just don't think I can find one for, I don't think I can find one for what I have to 1031 into.

And you've got, what, 20 days? Yeah, I got like 25 days left, you know. I got something. I'll figure it up. Actually, ask Dave. Dave, Dave, Dave will hook you up with a, you know, the stuff that he doesn't pick up. The trash. There you go.

So, Dave, where are you headed in the future? I mean, what do you see a business look like in the next 5, 10, and you personally, in the next 5, 10, 20 years? Yeah, sure. That's a great question. We have this pretty nice growth trajectory ahead of us. And it's because there were so many individuals that own these shopping centers that are aging.

So we're embarking on this aggregation strategy of buying as many of these shopping centers as we can, instituting professional management. And then one day being able to sell maybe the portfolio to a larger institutional buyer or take it public. We have an IPO, basically an IPO exit ahead of us possibly. So but you have to, I mean, our 50 properties is great, but we probably have to have around 150 or 200 in order to get to the size to be able to do a public exit or sell to an institution. So we're on that path. As far as me, I'm 55 and been at this for 20 years and love doing it and love raising money. But I've got a great team of eight other partners.

Three of us are a little older. Now we have six partners who are in kind of the 40s. So there are succession and to help us build a business. So I get to fish a little bit more, which is nice. Nice. Awesome. How many hours a week do you work right now? I'm just curious.

Like, are you a full time doing this, 40 hours? Yeah, I'm full time and I travel a bit. So my part of the company is the capital side. So I'm out raising money. And I mean, it's a lot of fun because I get to meet really wealthy people and hear their stories. And, you know, sometimes they invest with us and sometimes they don't. So I get to travel around the country and now the world meeting really cool people

and seeing if they want to work with us. So that travel and everything is definitely full time. but that's kind of fun because, you know, like I say, I get to see a lot of neat things and meet a lot of really interesting people. Awesome. Awesome. Love it.

Cool. Well, cool. Well, hey, let's shift gears here. We're going to head over to the section of the show, which we call our Fire Round. It's time for the Fire Round. All right, yeah, so this is a Fire Round. These questions come direct out of our very own Bigger Pockets Forum.

So these are questions that our users are asking for help with. And so we thought you could help. Number one, this guy says, I bought one acre of commercial land next to a high school. The high school has got 3,000 students, 500 staff. And I'm planning to build maybe a 10 to 12,000 square foot strip mall with six units. What type of businesses do you think will fit well in that kind of a strip mall? Colorado, marijuana and then restaurants.

All right. So marijuana next to the restaurants. Yeah. Right next to the high school. Wendy's. Right. Right. McDonald's.

McDonald's for marijuana and Burger King. Right. That's it. That's a pretty good setup there. There's no white. We need white castle in there somewhere. All right. We're good.

Yeah. Okay. So I would put restaurants in and then there are these great retailers still like Plato's closet that resell jeans to, you know, high school kids. So it's just targeting that tenant base to the to the user that's around you is what's important. Let me dive in on that. We normally don't dive in on stuff. but I just had a thought here.

So let's say you had a strip mall with a vacancy, and it was a wealthy demographic, the area where the strip mall is a better, better area. And that Plato's closet said they wanted to come in, right? Let's just say somebody that you thought was a mismatch. Would you guys, I mean, you guys take that into account. If they're like gunning to go in and be in that strip mall, you're going to say, listen, we just don't think it's a match.

Sorry, we can't have you in our mall. Is that kind of how that works? Yeah, we would just say no, that's right. Okay. Yeah, it's fascinating. Because like with residential, right, we have to be very, very careful. And maybe you do it with this as well, but like you don't want to violate housing discrimination.

So like it to be, we have to be very careful on who we reject because it has to be for the right reasons that we're rejecting them, you know? Like I could say. Are there reasons that you can reject people or not other reasons? Yeah, I mean, I reject people for. No, no, no. I'm talking about David. Is other reasons that you can't reject people for in, and, and,

this type of space. No, there are no reasons that you can't reject people if that's the right to say that. Yeah. I mean, you're not going to not reject, you're not going to reject people for, you know, probably protected classes and all that stuff. Oh, no, no, no, no, no, no. But yeah, I mean, it's all economics. So it's all about, it's all economics, all about the synergy of the setter. So, and there, you know, and if you, I mean, you, it goes both ways, right? So we have quite a few shopping centers in blue color neighborhoods, you know, we're not going to put a William Sonoma in that shopping center. It's not going to work.

But we will put a dollar tree in. We'll put a save a lot. We'll put tenants that fit the demographic of that neighborhood. And those tenants do great. So it just has to do with the fit into the neighborhood. You're a matchmaker. We're a matchmaker. Yes, we are.

Look at you. All fancy and stuff. All right. Next question. What protocol, what's the protocol for charging and collecting overdue rent? We have, we use the good cop, bad cop philosophy. So our property managers are the good cops and try to get the tent to pay rent. And then if they don't, we turn them over to our AR department or our cons or seal department.

And they hound them to death until they pay rent or we'll sue them. So we'll take the nice approach for a while, but then we go after them. All right. Fair enough. All right. Next question. I like this one. It says, hi BP community.

I just acquired my first mixed use building. Sorry, this might be a stupid question. I want to rent the store to franchises, like maybe a Starbucks or a Dunkin Donuts or whatever. I'm not sure how to start. Duncan. How do I just list the store in the MLS and wait for them to contact me? Should I contact the franchises directly?

Or is there a service out there that will contact them for me? That's a great question. Yeah, it's a great question. So what this person needs to do is to find the broker that represents Starbucks and talk to that broker. Okay. So Starbucks has brokers, Subway has broker. They all have their own brokers.

And so if you take it one step further, you're going to hire a broker that's going to know that broker. So you have to hire a really good broker that knows all of the brokers that represents the tenants. And then, you know, the brokers all know each other. So it's all rigged and they figure out the deal. But you got to hire a broker that knows the broker that has the tenant in tow. Got it. All right.

Answered my next question, which is great. All right. Last question. By the way, I made brokers mad now. So I piss a few thousand people off on every show. So it's all good. Let's see. Well, I'll ask this one.

One of my partners and I purchased a commercial building earlier this year, my first real estate investment. I was wondering if there's any way to force appreciation by doing the bare minimum. Ultimately, I'm looking to cash out and make some large. to make some larger repairs, like fixing the roof, it's currently 100% least. So this guy just, you know, he wants to force appreciation in the quickest and easiest way possible, I guess.

So what suggestions might you have for something like that? Well, I mean, I just don't believe to that. Yeah, I mean, I, there's work involved in all this. Yeah, yeah. I mean, and I got to tell you, more pre-recession, so pre-2007, you know, you look at somebody's pro forma and they were saying, cap and I'm a solid a six cap and I'm not going to do anything.

Well, none of those worked. I mean, it just doesn't work. You have to put some work. I mean, you have to put work into it. You have to add some value by good old fashion work. You can't rely on the market to force appreciation. I mean, perfect. I love it.

That's great. Awesome. Cool. All right. Well, hey, before we leave you, we're going to head over to the last segment of the show, which we lovingly refer to as our famous for. All right, let's get to the famous four. These are the same four questions we ask every guest every week.

Number one, what is your favorite real estate book, like a real estate investing book? Do you have one? That's a good question. I don't think I've actually read a real estate investment book. Wow. All right. I'm a little offended. You haven't read my book, Dave.

Come on. It's David, Brandon. David, David. I'm offended that you, okay, I'll get Josh to give you a copy before you leave. How about favorite business book, non-real estate? David doesn't read books. All right, next question, Jesus, man. Come on.

I kind of rely on the people around me. I mean, I've read business books, you know, good to grade, all that type of stuff. But I can't really think of one that really has hit me as being revolutionary. That works. All right, man, what do you do for fun? Our kids are friends. I know you got a great family. What do you guys like to do when you're not doing the real estate thing?

Well, since I live in Colorado, it's being outdoors. So in the winter, it's skiing in the summer. It's fishing and hiking and biking and just being outdoors. And I just, you know, I love living here and love the fact that we have such easy access to the most, you know, beautiful parts of our country. So try to take advantage of it as much as I can. At 55 you could still bike? Hike? Wow. Well, I did.

Josh, as you know, my Achilles tendon last year and that kind of stopped me for a year, but I'm going to be back this year. See, it's always, and I kid, but it's great because the show we recorded this morning was with a 24-year-old who was making jokes like I was around with the dinosaurs. So, you know, when I get to be one of the younger people, you know, it makes me feel good about myself. So, yeah. Wow.

All right. Last question from me. David, what do you think sets apart successful real estate investors from all of those who, you know, they talk about it, but they give up, they fail or they just never take action. They never get started. I think you have to take risk. So if you're not willing to take some risk, you can't be successful. We took some risk at the beginning going from a property management company, kind of serving

other people to actually be an investor. So you got to take that risk. And then it's calculated, do it smart. But I just don't see how you get anywhere in the business if you're not wanting to push it a little bit and take some risk and go on the edge and do it thoughtfully, but put yourself out there. Awesome. Awesome.

All right, man. Well, before we let you go, where can people find out more about you? How can they learn about your company and how can they reach out if they want to? Yeah, sure. So we have a website and it's baselineinvestments.com. spelled B-A-C-E-L-I-N-E-Investments.com, and that's pretty much the best way to see what we're doing

and what we're all about. Awesome. Cool. Well, listen, thanks so much for coming on the show. Lots of luck going forward. I'm looking forward to watching you guys IPO in the next 10 years. That's great. It'll be awesome.

Yeah, thank you very much. All right. Thank you. All right. Thank you. All right, guys, that was David Pucci. Big thanks to David for coming on the show. Shiny object, huh, Brandon?

Oh my gosh. I'm totally going to buy strip malls. Like, this is like my new thing. I'm going to do it. This is it. Triple net, strip mall. Oh, man. Go make moves.

Yeah, but you're in the West Coast. So you're going to have to go find something in Midwest, right? Yeah, yeah, but you're in Denver, so you got to do it too, you know. That's okay. I'm from the Midwest. I'm from Minnesota, you know. Well, you know, that and you like live in podunk. So I'm guessing you could probably actually find some on your area.

I probably could, but they actually freak me out in my area, like commercial properties in small rural towns freak me out because like when there's a vacancy, it's not for like a month or six months. It's like six years. Like that freaks me out. Yeah. Well, and that's what he had talked about. High traffic areas that have lots of what's what's the word he used. Not velocity, but I don't know. But I know you're talking about it. I'm blanking out, blanking out. But yeah, I mean, you know, location matters. Okay. Jeez, yeah, two, three, five, I can't, I can't get a Right. Yeah, man. So this is it, right? You're going to go from mobile home parks to stripals. I want to sample a lot of different things.

Neighborhood shopping centers. Neighborhood shopping centers. I want to sample a lot of stuff. But first, I got to buy my mobile home parks at the goal beginning of the year. How much time do you have left on your 1031? I don't know. It's like 30 some days. Ah, you're fine. Interesting enough, I'm actually looking at a property in the good old state of Michigan right now that I'm most excited about. So we'll see. Town, Detroit. Not in Detroit, other part of the state. So we'll see. Okay. Okay. Okay. Well, you know.

I'll keep you updated. I get it. They're pushing hard on this Amazon business. I don't know if you saw. There's like all these cities that are trying to get Amazon's new massive. I don't know if it's a headquarters or they said they're going to create like thousands and thousands of jobs wherever they relocate or locate this new facility. During the NFL, apparently there was a on the headsets of some of the coaches.

You could see like this Amazon Detroit, I think it was. hashtag or something like that, which is crazy. Yeah, like, I mean, I know Denver's pushing hard core for it. I mean, lots of these cities that kind of fit the criteria, they're searching for our or vying. Yeah, you never know, man. They could definitely turn around an economy. That is true.

That is true. Well. So, yeah, man. Awesome. Awesome. We'll get out there. Go find a strip mall. And thank you guys for listening.

We hope you enjoyed the show. I thought it was great. I thought it was a lot of fun. And, you know, we got more coming at you next week and beyond. So thanks for listening. I'm Josh Dorkin. You're not going to let me take it out this time? I've been asking for years.

Go ahead. You know what? Start up. Start up. Go ahead. I was just kidding. I don't want to do it now. Now I don't want charity.

You take it. I ain't taking your charity. I have nothing to say at this point. For the Bigger Pockets podcast. My name is Josh Dorkin. Signed off. Well played. Well done.

You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. It's time for it. It's time for it. It's time. The Random Six. All right. Now, before we get out of here, let's get to today's random six.

We don't really have a thing. I don't know. Yeah, there's not a thing. There's not a thing. We do have a thing, but anyway. Well, whatever. We're going to do it. All right.

So these are just random questions to get to know you a little better, completely non-real estate related. So number one, name three things in nature. Oh, we'll say at least one or two. Let's say three. Three things in nature you find most beautiful. Like, what do you just, what's this most awe-inspiring for you in nature?

A river is number one. Wild animals are number two. And trees are not. number three. All right. I like it. There you go. Now are you talking Colorado trees or real trees?

Oh, real, yeah, real trees. Got it. What's a Colorado tree? I know. It's the same old, you know, they don't, they turn one color, blah, blah, blah. Real trees turn like 10 different colors. I was referring to the marijuana, but that's fine. Oh, oh.

Oh, that kind of tree. Oh, there you go. Wow. Wow. You know what I'm talking about in Washington there, Brandon. I, well, I know what you're talking about. I'm familiar with what you're talking about. All right, David.

I don't like the inflection you had there in your voice. If you had one day left on Earth, how would you like to spend it? On a river. Like floating, floating diet? I would be, yeah, no, I would be in Patagonia, fly fishing. All right. Sounds relaxing. What was the last thing you ate?

Is this a random six question? It is a random six question. Curious. Yeah. It was a subway sandwich on the way over here. All right. Recession proof business. Yeah.

What movie could you just watch over and over and over again? The current movie that I do watch over and over again is Deadpool. Oh, I love that movie. That's a good movie. My wife hates it, by the way. I can't believe you're watching that movie again. I'm like, I love this movie. So offensive.

It's so offensive. All right. My last of the random six, Josh has one more, but what size bed do you sleep in? Where are you coming up with these? I type they to Google random questions and I found this. It's a queen size bed. All right. You're one of them.

Yes. Oh, man. All right. I like this question. We ask this every once in a while, but I ask this on every job interview. But if you could sit down and live the life of, if you could live the life of any historic figure, alive or dead, whose life would you want to live? And what day in particular would you want to experience from them?

Oh, boy, that's a good one. I would probably I would probably want to live Harry Carey's life and would have wanted to experience him at a World Series game. The Cubs win.

The Le Cubs win. That's Harry. Oh, good job. I love Harry Carey. Awesome. Obviously you're a Cubs fan. Yes, sir. Yeah.

Yeah. Well, you know, we'll see how it goes. Yeah. All right. Well, thank you, David. Yep. Thank you very much. It was super fun. Yep, thanks, guys. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform.

Our new episodes come out Monday, Wednesday, and Friday. On the host and executive producer of the show, Dave Meyer, the show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk.

So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.