Show Notes
Are we becoming a group about commercial properties?
The way we are going, it seems that way.
However, when planning a property portfolio I always like to look forward and see what the “Ultimate Goal” is.
That conversation usually ends up being “I want cashflow to support my lifestyle without having to work,”.
This is typically (but not exclusively) done by building a property portfolio of good solid growth and cashflow properties. Then transitioning into commercial when the person has enough equity and growth to do so.
This is why I believe its good to look at Commercial Property, because you can learn about an asset you’re potentially going to buy.
Plus, its bloody amazing what you can do with commercial to value add.
This is why we got an cracking commercial property expert Andrew Bean.
For all those value add folks out there, Andrew will be going into the logistics of how you can find, negotiate and secure a cashflow machine while also boosting equity through value add.
Who is keen for this session?
Topics we’ll be talking about include:
- Step by Step how to find your next Deal! This one is bound to be juicy and actionable.
- Insights on how commercial market is performing – with a focus on Self Storage.
Episode Highlights
5:55 Quote of the Week
12:03 Introduction of Andrew Bean
17:50 How to add value to commercial property?
22:08 How do you fund Commercial property purchases as they require higher deposits?
24:03 How much more complex is commercial property compared to Residential?
26:40 What happens when biz goes down n tenant wants out with 4 years still on lease?
29:55 The Commercial property market in Coffs Harbour
32:42 What kind of checks and balances do you do When you are visiting a location?
37:29 How do I actually know where I should be looking for commercial property?
40:28 What minimum time should I spend to know the market before buying commercial property?
41:15 To understand how to add value you need to understand how it is valued
42:59 Finding Under Rented Property is the best way to add value
47:04 What are some of the shortcomings of commercial property?
50:26 What is a Cap Rate?
53:56 Difference between Cap Rate and Yield
1:02:50 What is the main value driver in commercial property?
1:06:20 What Drive Net Income more than anything else?
1:14:18 Value Add Strategy 1: Split Property into multiple tenancies if you have multiple roller doors.
1:19:34 Value Add Strategy 2: Close in an open space to create more NLA & start charging rent for it.
1:23:28 Value Add Strategy 3: Add a shed or garage to the under utilised hardstand creating more NLA & start charging rent for it.
1:24:59 Value Add Strategy 4: Add multiple sheds to an under utilised area along a boundary (Self storage style) & have multiple tenants paying you each month
1:33:42 Value Add Strategy 5: Add a mezzanine (Seriously its that FRICKING simple!)
1:35:30 Value Add Strategy 6: Identify under rented property & raise the dam rates
1:37:57 CP data
1:47:12 What’s an acceptable/common dd period?
1:51:10 What does a tenant who is late / missed payments do to your value – assume its a drastic reduction?
1:53:28 Where people can learn more about you?
Episode Resources
Connect Andrew Bean: https://www.commercialpropertyshow.co…
Connect Joe Tucker: https://propertyprinciples.com.au/
Join Aus Property Facebook Group: https://www.facebook.com/groups/Auspr…
Join the Newsletter: https://propertyinvesting.substack.com/
SUBSCRIBE: https://www.youtube.com/channel/UC2Hq…
Other Guests On Our Lives
Chris Gray, Amanda Farmer, Steve Palise, Nathan Birch, Todd Sloan, Cate Bakos, Mike Mortlock, Lloyd Edge, Karen Baldwin, Rob Flux, Kent Lardner, Charley Valher, Bernadette Janson, Pete Wargent, Melinda Jennison, Bushy Martin, Michelle Lewis, Peter Koulizos, Jane Slack-Smith, Joe Tucker, Jordan De Jong, Scott Aggett, Belinda Smith, Jef Miles and more.
