How to Invest in Commercial Real Estate

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Episode #055- How AVERAGE Investors Get BIG WINS in CRE!

by Criterion, Braden Cheek, Brian Duck
April 4th 2022
00:00:00
Description

Today our hosts Braden Cheek & Brian Duck from The Criterion Fund, Joel Thompson from Precision Equity and guest Clinton Taylor on behalf of Woodland Creek Furniture Tulsa discuss how the avera... More

and so to me, the real estate game is super simple, it's networking, it's talking to people um I still call joe all the time and say, hey, you know, I'm looking at doing this, I'm looking at doing this. Um I just want to be clear none of the deals that he's done, I had any part in, he just comes and tells me, hey Joel, I made another several $100,000 and I'm like what can I can I invest with you, be your partner? All right, welcome back guys to another episode of how to invest in commercial real estate. I'm Joel Thompson here with my business partners, Brandon chief brian Duck with the criterion fund. I also own precision equity and we're here breaking down how to invest in commercial real estate. And today we have got a special guest which I'm excited about. Mr Clinton Taylor, how's it going? Good, good, good. So the reason we are excited for Clinton to come on is because we're always trying to figure out how do we get the average person interested in commercial real estate and interested enough to take action. Yeah. Uh and so that's what this is, Clinton and I are friends, but I wouldn't say we're like hang out everyday friends, but you knew I was invested in commercial real estate and I'll let you kind of introduce who you are and then kind of tell us how you got interested in commercial and investing in commercial real estate.

Okay, well like he said, I'm clinton Taylor, owner of Willow Creek furniture here in Tulsa. So anyways um we've known each other for 10 years. I've called you multiple times and we've sat down and we've talked about, you know, my business, your business in 2018, That's still debatable, debatable of when that is. Um, but we talked and I asked you kind of what you had going on and uh, you had some opportunities come up for your investors. Uh, and I wanted to kind of get involved in that. Um, and you allowed me to, to invest in a colonial building here in Tulsa. The biggest thing here is we are always putting together the newest real estate opportunity. Right? So criterion precision equity, we're going and finding these real estate deals, putting the package together and you are on precision is investor list at the time. Right? Just as, Hey, I'm interested in investing, let me know what opportunities you have. And in that opportunity, you know, that sparked interest. Hey, this may be the right time.

This property looks good. These returns. I could deal with whatever it was. And that sparked the phone call with Joel of like, hey man, how do I get involved in this? Okay, so I remember this because that was your first investment. We don't typically take a lot of, a lot of people where they're just like I got $25,000. I want to put it into commercial real estate. The reason we allowed you guys to it because you're a business owner here in Tulsa. Uh and you said hey you know I want to try it out and we talked about this before. Once you put a little money down on an investment, your your I. Q. In that investment goes up right? You begin to pay attention, you begin to learn about it. You want to figure out hey what you got a little money down, I need to figure out what this is about. So you got in on the colonial building, it's a really great property here on Cherry Street, kind of a midtown location. And so you get your first distribution check. What what do you think that's when the lightbulb went off for me and my wife, it was the easiest money we've ever made in our life um as owning a business, You know I do as much as I possibly can to to grow my business and I'm there 24 7.

And with that distribution check I didn't have to see you for three months. Yeah somebody somebody finally paid you money without you doing anything. Exactly. Uh And so that's kind of what sparked my interest and really started my real estate venture moving forward. Okay so then let's just fast forward to, we we may not do all of your deals but like okay so how did you, because people are gonna say okay you got your first distribution check, but then what did you do? So what was your, what was your kind of gateway into into real estate? Um Well, seeing what you guys do listening to podcasts, uh seeing what everybody else is kind of doing uh in real estate. I just started looking for deals is what I did. Um I was on realtor dot com um and opportunity came up for my first deal and keeper my son wanted to go to school there and so I ended up buying that property. Uh and when I bought that property, it just parlayed into a second property uh with a lot of cool little ventures in between. So we'll ask you questions because I want people to get a sense for it. You didn't have to go buy a half a million dollar house.

His first house you bought. Well my first house that I bought was back in 2002 and it was like $15,000. This was in a better area than that, but it still was pretty affordable house. What did you pay for that first one? We paid 55,000 for the first house. Nice. And had a renter, we did have a renter, so it was a calculated risk going into It. You have you have some income now some people are going to say, Okay well I don't have 55,000 cash. A lot of people listening could probably come up with 50,000 in cash to buy the house. Uh if not they could talk to a family member, they could, you know, they could find a way uh knowing that you're gonna be able to put a loan on that at some point and pull that cash out. But okay, so your first house renter, what'd you sell it for? 129,000. Okay. And did you, how much did you put in it? Did you put some fixed up money in The first, it was about 15,000. It was move in ready. I had to put heat and air tile. So You're in at 70,000, you sell it for 130 now you got 60 grand in your pocket. Uh and then you did you did the one next door.

Yeah, so the cool thing about that is the one next door had brand new windows, had siding, brand new roof. And then the guy was working on it inside and when I went inside it was just like a bomb, you know blew off and uh he was underneath the house fixing plumbing and uh met him and just ask you know what what he was doing and you know what his plans are. Uh and uh you know when he told me he wanted out of it, you know, another life. Yeah. Right, great. Um and so I just asked him what he wanted for it. Uh and he said He would take 43 of what he had in it again, new siding, new windows, new roof to me that's another calculated risk because I'm thinking I can buy that worst case scenario, you know I can sell it for what I have in it, right? And so going into that first deal, that was my main thought as well. I had a renter 55,000 Houses were selling for about 129 230,000. And so it was more of a calculated risk.

Um and that's something that and all my deals I've done have been very calculated. Um And so uh you know the next day his wife brought me a contract we signed, I called the you know called the bank. Got got alone because they wanted to know exactly what I was going to do. Um And the cool thing about that is by the time we closed on that deal, I already sold the back half of the properties on both both lots. So they were like they had big bigger backyards than they needed. Yeah so it was a shotgun style. Um And so it was a super long backyard and it backed up into a commercial property. Uh And you know I was driving again, I like to talk to people. So I got out of the truck, a couple of guys were working on their commercial building and I said hey would you guys be interested in more parking? I bought these two houses side by side. They have long backyards that, you know, we really don't need. Um, and so, Uh, just talking to them, they asked me what I would take for him. I told him 25 apiece. He said he'd call me back the next day.

He called me back and said, I'll take it $50,000 right off the top. What I love about that is uh, you know, most people aren't driving down the road looking at real estate thinking, okay, what could I do to generate value there? But it is as simple as that? Like Why do I need a backyard that's 300 ft long? You know, if I carve off the back half of that, you still have a great backyard big enough for a pool. Could someone else use that land? That's just a real simple thought that made you 50 grand. It was. And, and not only that listening to you guys on the podcast, you know, you talked about a commercial, uh, the deal that you have in Vegas, you ended up selling the front parking lot. And so that was kind of the trigger for me to, to be like, hey, I can actually section this off. Um, and then every deal I've done from that point on when I buy a piece of real estate, I make sure I have land that I can split section off and that's appealing to other buyers that want to build their own home or. So it's a pretty hot real estate market, Have you noticed any sort of competitive advantage that you're able to have by maybe offering more for a house than somebody else would because your value is in the land.

Uh That's exactly where I see. All the value right now is where we're at is in the land. Um The house. Uh the houses that I buy now um are beautiful homes that don't need repairs and you know, you don't have to remodel. Um It's really the value is all in the land. Uh And that was a great thing listening to to grant Cardone is he's always like don't buy a single door, don't buy a single door, don't buy a single door. Right. Well what he made a mistake in is he bought a single door mansion, but he didn't buy that mansion. He bought this little hut down on the beach and he said this is why I bought the property. And so now every property that I look at buying, I make sure that there's a piece of a hut that that's why somebody's going to buy the property, whether it be a barn upon. Uh just the the atmosphere atmosphere of that property, That's a really good point because you know if you have a decent sized house and it's on 20 acres. That the house is most of the value?

Let's say it's $1 million 20 acres, it's a big house, but if you carve that house and put it on four acres, it's still worth about a million dollars. Uh And so that's the secret that you've been able to to kind of do tell us um if you want, you know what's the been the biggest deal you've done and what was the profit that you were able to generate? And how quickly did you make that profit? Uh the last deal that I did um was a $1.2 million dollar um investment. That was a cool story in itself. Um Me and the lady negotiated on a price. Um I was going to, this is the house with land. Yes. How much land, how big of a House? Um it was, the house was 50,700 square foot, had a pool. Um it was probably the prettiest a piece of property and all of bixby. And my right your opinion, My opinion. Yes. It had beside it had a beautiful 60 by 40 barn, had about an acre pond on it. Then it had about 13 acres to the side of it. So the house, she just listed the house and the house was like 995 is what the house was.

And so I asked her, I was like, well why why don't you sell the land? Are you interested in selling the land? She said, yeah, we want to sell the land, but when we want to sell the house first. And I said, well I'll buy the house and the land what do you want for the land? She told me she wanted 400,000. Which at the time, you know of me researching every day on realtor, knowing what lands going for. That was a pretty good number. Yeah, that's I mean 400,000 for 13 acres. And that's a deal correct. And so I kind of went back at 1.2 and I was like, Hey, I'll buy it all at 1.2. And she, so that's that's an important note knowing it's a good deal going back asking for a touch more and and it's fun. Right? I mean to kind of see where they're at. Um And so anyways About a week goes by, we settle on 1.33. All right. So I said I'll be there, signed the contract because I think I can still make 2 300,000 just off the land alone. Uh And so I'm heading to her house. And she texted me and she said I just got another offer.

$100,000 cash Ernest escrow, uh closing, you know, 30 days. And And there was a house on the land at a higher price, like 1.6 or something that she wanted. I didn't I didn't respond back. Right waited all day long uh texture at the very, very end of the night like 9 30. And I said congratulations. Hope all goes well. If anything falls through, let me know. I love it. Holding to the guns. Yeah. Yeah. I was, I was pretty, pretty heated. Um, but the cool thing is, she called me a week later and she goes, you won't believe this a week, a week later. He said, you won't believe this. They backed out there from California. I bet they were from, they were probably from California in her mind. Yeah. Which I don't fault her. This is a good trick. If it works, they saved me 100 and $50,000 because I said, well, the only way I'm buying the houses at 1.2, she goes, let me talk to my husband, Call me back 20 minutes will do it. I said, I will be there in 10 minutes. So she had to come because she was the realtor as well. And so uh saved 100 and 50,000, in a week.

I bought the house at 1.2. Um and here's the other cool thing is, is now my dad's kind of in on the deals, you know, as you grow and develop and they start believing in you a little bit more. They want to be a part of it. He's always been a part of it, but now he's actually going to live in these homes. He's gonna pay the mortgage notes. So now again, it's a calculated risk that I'm not paying the note, you know from the bank and so he's living there. It's a beautiful home. It's it's my dream home, not my wife's or we'd probably still have it. Um but absolutely love the property, you don't have to do anything to it. And I bought it at 1.2, uh ended up putting it on the market with the realtor sold it within two weeks of putting it on the market with the realtor at 1.7. That's insane. Well I love that. So half a million dollar profit. Yes and I, you know, I want I want people to appreciate that. I mean just think about this, this is a friend of mine with not very much real estate experience that gets an idea, has a little success.

And you're not just looking in that, looking in the diligence of trying to find the property, half a million dollars on one deal on one house that the whole city of Tulsa had access to this deal because I think the big thing is a lot of people think, well I don't know where the good deals are, if it's marketed to everybody, surely you're not going to get a good deal, it's just a victim mentality that is the victim mentality. And the thing is what my early mentors convinced me of this fact. The deal of the decade comes along once a week and I really took that to heart. I'm like the deal of the decade comes along. They're out there. The deal of decades out there. I just got to find it and people aren't looking at it and you found it and you made, you made years worth of income in three months just because you were looking and that you believed it was possible, which is big and he was able to be steadfast with the negotiations. I mean, that was huge waiting a week and something. I mean, you see the opportunity to see the value, You see everything and they're just like, oh man. And waiting a week. That is insane. Almost makes me want to get back into residential. Huh?

Who's with me? Yeah. So I think one of the big things here is you find these opportunities in residential, you find these opportunities in commercial. I see strip centers, retail strip centers with excess land all the time. You can see all sorts of opportunities with excess land. Um, and, and the value is in your underwriting and where you can find value. We've sold, you know, several out parcels, you guys had a closing on out parcel in Little Rock recently. Uh, we only owned half of it because we shared it with the, there's a big hobby lobby owner. Um, and then it's our strip center. So we only owned half of it, but we sold it for like a million. Two, just the parking lot. No building, nothing. But just the idea that you partnered with a neighboring property owner. You don't even own all of the parking lot, but your neighbors together. Yeah. You couldn't have done it without each other. It's a symbiotic relationship. You said, hey, let's put this thing together. So when you're looking at a property, that could be the competitive edge, that can be the reason you can pay full price. That could be the reason you get awarded the deal is because while everyone else is looking at the house of the shopping center, you're focused on something completely different.

That's huge. I want to go back to the, the idea you walked in this house and it's chaos on the inside, even though they had spent some money on the outside. And the first words out of the guy's mouth is, how do I get out of here? How do I get out from under this? I hate this. And and so for everyone listening, no matter what market you're in, there's that guy somewhere in your market that thought he was gonna try real estate, did it all wrong is super busy. He's stressed out of his mind, He's uncomfortable with the mortgage or whatever it is and he's ready to be done. And, and those are the opportunities that you can find if you're in the market, if you're trying to, if you're calling on houses, you're looking at vacanze, you know, all that stuff. So I think that's a good point is find somebody that's a don't want her. I don't want to be here. I don't want this house. I don't want this apartment complex. Now today's market, commercial real estate so hard. It's kind of hard to find those, those guys. But as the market turns well, we'll find people that got in at the top and they wish they hadn't. You know, I find it's even it's even harder to ask for it.

You know, it's hard to ask for money or a discount or a deal or negotiate. It's hard in in a regular market or a bad market, but in a good market when it's so competitive, you feel lucky just to get the freaking deal. Let alone go back and ask for something more. You feel bad. But asking could be, you know, $30,000, it could be $300,000. It could be this Decision kind of takes me back to when people ask me, well, Joel, I've got 25,000. I got 50,000. What do I do. What do I buy? The thing is I don't know. I don't know what you should buy but the reason I wanted to have Clinton on is because I'm so impressed with what he did with with $50,000 investment. I wouldn't go tell you to buy a small rental house in key for Oklahoma city. It's a it's a real tall, a small suburb of Tulsa guys. Uh I wouldn't I would never be my advice that, but that's why I hate giving that advice is that I want people, I just want to open their minds to what's possible and to teach them that real estate can be a solution for them and then let them go to work and in their sub market in their city with their, with their contacts with the money they have and find out what's gonna work for them because they're one deal away from starting their journey on success in commercial real estate and their one idea away from from having all the money they want.

Yeah, another thing I want to ask you is um we talk a lot about, you know, side hustles and the ability to kind of escape your day job if you don't want the day job and be able to do whatever it is you want to do. So all of this was a decent amount of work. I mean you're wheeling and dealing on the side here with the real estate deals. You started out with, hey, I own a furniture company who's running the furniture company. Um my dad is a big part of that success. Um and then it's, you know, 13 employees who I invest into uh and allow them the opportunity to really grow the business, You know, listening to podcasts again, you know, you you hire the right people uh to drive your business and we've been fortunate with, you know, the 13 employees we have. Um they love what they do. Uh and you know, for me, I've always been there and so it took a while for me to kind of back off because it needs to run itself. I'm going on year 11 12. The real estate just came about 23 years ago. Um and to me that that it is easy.

I mean it's super easy. It's a phone call. Um it's the amount of money that you've been able to make for the hours invested, probably have no comparison to your, your zero. Almost almost zero. I mean, uh and so to me the real estate game is super simple. It's networking. It's talking to people. Um I still call Joe all the time and say, Hey, you know, I'm looking at doing this, I'm looking at doing this. I just want to be clear none of the deals that he's done, I had any part in. He just comes and tells me, hey Joel, I made another several $100,000 and I'm like, what can I can I invest with you, be your partner? That's awesome. But it's networking, right? It's, it's building relationships. Um it's asking questions and it's just researching. I mean seriously? You know, on realtor dot com. I look at it, you know, 15 minutes in the morning, 15 minutes a night, see what comes up, you know, new, what's all around me and I've done all this within three miles, four miles of where I live. And so that's even better, how easy is that?

Money? Money is all around you. If you're listening, it's all around you, but you just have to know what to look for you and put in the consistency and the plan. Right? He had a plan which, you know, we can get into that in a second, but obviously a plan of, hey, I want to get into real estate and you're spending 15 minutes in the morning and 15 minutes a night, Which is uh inconsequential amount of time. We waste 15 minutes All the time, several times a day throughout the day. But you're spending 15 minutes in the morning, 15 minutes in the evening looking at deals. I would say every single one of us is looking at deals at least 15 minutes in the morning and 15 minutes at night. And that's how we're able to find opportunity. Right? If you're not out there looking for the opportunity, it's not just going to smack you in the face. I want to, I want to just plug the furniture store real quick. I won't spend any time at Woodland Creek. Right. Will and creek furniture Tulsa. Ok. It's here in Tulsa. They have awesome stuff, both rustic and modern. Yes. So we have two stories upstairs is very rustic Western Lodge Lake House stuff. Mountain home downstairs is very contemporary, modern, traditional, organic.

So it's two floors truly a destination just to come and enjoy it. Okay, so if if one of our 8.5 listeners wants to come by your store, what they get a discount they say I heard you on the podcast, I want a discount is like a small discount you get for podcast listeners. 10%. Alright, no way. There you go. There we go. If you're listening, go by the store and check it out. Let them know you heard us on the podcast and you get 10% off. That would be awesome. So what are the questions you have? I I think I'm good. Um Clinton, thanks for coming on today man, Congratulations on your journey man. All started with a hey remember what he said, not what I said. It all started with getting a check in the mail. He didn't have to work for, he thought I need to do more of this. Uh those distribution checks will change your life and just getting a little money down. Got you more and more interested in commercial real estate. So we highly recommend either get a deal or invest in the deal and and watch your interest in commercial real estate grow And from there you're off to the races. Yeah. And and just like Clinton, the first step is going to our website how to invest in serie dot tv and hit um investor list or sign up for our investor list.

It'll take you, you thought your name, email address and then you'll get all the opportunities just like Clinton did, and you can invest just right alongside of us. And don't forget to smash the like button, subscribe to the Youtube and, uh, Spotify and all the other accounts. Uh, and I guess we'll see you next time. Thanks guys. Awesome. Thanks, awesome. Thank you guys.

Episode #055- How AVERAGE Investors Get BIG WINS in CRE!
Episode #055- How AVERAGE Investors Get BIG WINS in CRE!
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