All right. What is up and welcome back to another episode of How to invest in commercial real estate and breaking news. Os U won a football game. They did, they took out 20 25th number 23rd. Kansas can't believe it. I don't know how that happened. Is that how bad they are when they take out like the 23rd team? That's not too bad. That's actually, that's a pretty good win for them as bad as they, they've looked at times this year. Anyway, what do you got for us? It's the best time of the year. It's the best time of the year. It is distribution time, baby, distribution time. And we love distribution time because it's when we get to send returns to all the investors that entrusted us with their money and it's not a little bit of money. It's a lot of money. Uh How much are we sending criteria, how much are we sending out this quarter? So criterion sent out a quarter of a million dollars this quarter. Um Right about level where we have been the rest of the year. So drastic precision equity. Of course, we've been around a little bit longer but, uh, we're in excess of $600,000 sending out to investors, which is amazing to think about.

It still blows my mind. Actually, we were talking about it before the show. That's nuts. It is. It's awesome because, uh, you know, all that money we're giving investors. It's, it's, it's money that we can hopefully reinvest for them. And, and so I don't know any one of my friends that gets to send their friends and family over $2 million a year in distributions. And that's pretty awesome. What's pretty awesome for me is, uh, there's a high percentage of people that get more than one check, you know, like a lot of people open their mailbox, you know, really consistently during this time just because they know they're getting a lot of checks in the mail. But um, we actually do ach distributions now. So you don't get the joy of opening a check. But from precision, you do. I kinda like, I kinda like the checks. I did like actually today opening my bank account and seeing all the uh the ach deposits from criterion. So that was nice. That was good too. So we were talking before the show. Just what do we talk about? How do we, how do we do this today? And I felt like if we could just focus, you know, we're, we're always talking about these new properties or these new concepts, but very rarely do.

We kind of take a rewind and, and go back and just look at the portfolio, look these properties that, you know, a lot of the listeners have been able to partner and invest in. Um a lot of these properties. We just don't talk about it anymore. Not because uh they're not great, but just because a lot of them are fairly uneventful. Um which is the best. Great. Yeah. Um So we're gonna pull up the investor sheet here. So if you are a member of our investor list, which you should be, if you're not, it's super easy to sign up. You just go to the website, the Criterion fund.com or how to invest in cre.com. There's a button in the top right corner that says join our investor list. So if you're signed up to that, you get a monthly newsletter from us if you like me and you drop your, drop my phone. Yeah. But if you're like me, you probably don't open most of these newsletters you get because everyone sends you a newsletter. But ours is actually fairly interesting because it, it goes into a lot of properties. I mean, it's not bad. It's not, it's so it depends on who you ask. OK, anyway, tell us about it.

It's got lots of pictures, it's got lots of pictures, guys. Um But anyway, it goes through each of these properties super specifically to just give you an idea of how these properties perform, even if you're not invested in them. And we had this idea a few months back because if you're an investor in a deal, you get an update from that deal every single quarter with a narrative, there's um an investment report that just shows any contributions or distributions that you made or received during the quarter. Um So you get one of those, but if you're not invested in the deal, a lot of the times you'll miss information about these deals. Um So that was just our bad. We weren't, we weren't relaying that knowledge to everyone. Yeah, it may be that you thought about investing in some of these opportunities and then you're wondering how they're doing. And so today that's why we're gonna go through uh some of the stuff we got going on and if you thought about investing or if you remember seeing it now you're gonna hear maybe how it's doing. Yep. So let's start with developments that are completed that are on the market for sale. We have three of those currently. So we have some excess land in Dallas from a kitty academy we developed that is under contract for sale supposed to be closing towards the end of this year.

Super excited to get out of that one. We funded the deal a couple of years ago. Great little project. Let's see. We, so we've sold the Kitty Academy, but we just haven't sold the land. Is that Right. And that is in um permitting now for a concept that is doing like uh some sort of pub I think there. Um So they're in permitting with the city of Dallas right now, lending is heat up. Um I believe there's equity groups heat up and right now we're just kind of waiting on permits so we can go in and close and exit this piece of land. But like I said, it's in contract. So when we sold the Kitty Academy, uh did the investors, what percent of their original capital do they get back? About half? Ok. So then once the final land sells, they'll get the rest of their capital back, plus whatever return there is available. Ok. All right. Next, next one, the next one is another Kitty Academy and this one is in New Jersey. So this one is on the market for sale, it's completed. Um The tenant has taken over operations, they're leasing up and right now we're trying to exit that one. So it's on the market for sale. We've received a couple of offers, we've counted a couple of offers.

We actually just counted one what a couple of weeks ago for, you know, and if I remember right, this was part of a two property portfolio. So we sold the one in Houston and then how much of the original investment did investors get back? Um 70% of their capital, they got back from the first asset and we're projecting a very similar check once we get out of this asset. So around a 1.4 equity multiple, not too bad. Um The next one, this is our latest development. It was our 1st, 2nd 1 in Owosso, I guess, but this was the development of the salo and five tenant strip center in Owosso. Um So those have been completed, they just finished up construction in the past couple of months and we just got those on the market for sale. I don't even know if the listing broker has sent out the initial email blast. Um So again, what are we middle of October? So, I mean, it would be tight to have an exit this year. Probably not gonna happen. We'll probably look for exits. Um, on the Smith Farms retail in the first quarter of next year, which not too bad considering.

When did we raise money for that? When do we start on that? Not even a year. So less than a year, maybe, maybe right at a year. So hopefully people can expect their money back within 18 months, maybe. Yeah. Yeah. Yeah. And there's um there's a couple of salad and goes on the market right now. So we priced it fairly competitively to, to hopefully move. But yeah, we're very optimistic that those can exit in the first quarter of next year. All right. So that is finished development projects that is on the market for sale. Um the next one we're gonna go into is all of the cash flowing shopping centers we have. So we have what? 12345678 Holy cow. We have eight. Um So the first one is Village at North Shore. This is um like 200,000 square feet. This thing is huge in um Slidell, Louisiana just outside of New Orleans. Yeah. So um this one we bought, it was like an eight cap shopping center. So it kind of cash flow is great just by itself, but it was severely over parked and there was one pad site next to it and everyone else has pad sites. So we see the value in carving off three pad sites and, and selling those.

Um We had initially a car wash interested and it kind of forced us to go through the permanent process with the city and the feasibility to just make sure a car wash could actually go there. We did that figured out the car wash could go there and then they backed out, but we've actually got two more on the hook and I believe there's like a take five oil change or, or something else. Um More car washes that are interested. Is that what you're saying in that one spot or two more car washes, one of them is a reverse build to suit one of them is build to suit and then o'reilly Auto Parts is in committee. Um to submit an lo I to buy about half an acre. So that would be great. I think we're still waiting on third quarter distribution numbers for that property, waiting on third quarter update and third quarter distribution numbers for that property. But everything we've heard, I think it's, it's going just like we, we had planned. Yeah, I mean, I think the only thing abnormal that's happened is obviously, um, you know, Marshall submitted, um their, I, I don't know what they call it, but they're going to go dark, I think in the middle of next year and then pay through the end of their lease term, which is like end of or middle of 2025 I think.

Um but they were at a fairly low basis. So we're optimistic about backfilling them and, and we've got a ton of time and like I said, they're, they're fulfilling the rest of their lease. They're just not open. Which kind of sucks. So, are we gonna, we're going to uh start trying to lease that up now? It's already, I believe it. I mean, it should be on the market listed. Yep. All right. The next one is Stonewood Village. This is about 50,000 square feet in Stone Mountain, Georgia. We bought this in May or June of last year. Um For those that don't know, it's just what east of Atlanta, southeast of Atlanta. I have no idea. It's basically a suburb. I went there. Did you go there? That's what I thought. I thought I went there direction. How do you guys not know where it is? If you've been there an awkward edit, we're gonna have to do now. Directionally challenged. Anyway. Stonewood Village is honestly one of my favorite little properties um because nothing wrong happens, right? We had a little water leak the other day and it was almost like refreshing like thank God besides a truck driving into the side of it goes wrong.

I mean, ok, that was obviously out of everyone's control and it was like 2 a.m. random u-haul driver. But yeah, but as far as the tenants paying their rent and at cash flowing like we had anticipated. Yes, it operates like it should. Yeah, last year we did like four or five lease renewals there and every tenant was ecstatic to renew every tenant wanted options. I mean, solid property, great piece of real estate. We actually have the director of operations going out to that property tomorrow. If you're curious if we ever go back there after we buy it. We do, Joel doesn't he goes where he wants to go? Ok. The next one, this property is in Saint Louis. This is Gordon Plaza and Farber Center. So this one, we bundled with another shopping center and equity raise was called the Saint Louis Retail Fund one. So that one investment owns both of these shopping centers. And unfortunately, right after we bought this shopping center in May of last year. It kind of immediately had this exodus of a few tenants which sucked right. One tenant we had to evict another tenant moved, so she moved her business closer to her house and then another tenant left with like 18, not 18 months, it was probably a year left on their lease term.

So it was just immediately like welcome to real estate ownership, three tenants gone. We had some roof issues too that we had to deal with. So, you know, we we talk about planning for worst case and although I I wouldn't say we we face worst case on this property. We definitely face challenges and uh the good news for the investors is we definitely set aside enough capi uh capital expenditure money to handle these issues and we have plenty of cash on hand uh for both roof repairs, uh tenant improvement dollars for new tenants, leasing commissions costs. We're gonna have to have but we're just being upfront that that has not gone quite as smoothly as some of the other uh deals that we've done. Yeah, but you, you have to, I'm trying to figure out a way to say this but not about myself. So that deal has $600,000 in cash, probably more, probably like $650,000 in cash. It's cash flow positive. It's got a new roof. We've fixed tons of capital expenditure problems. We've released a ton of tenants and we evicted a couple bad tenants. So did we not pay out distributions during that time?

Yes. Were you communicating all of these things while we were doing them? Yes. And we are about one tenant away which we have the signed lo I we've been negotiating the lease um and it's actually a tenant at the next shopping center that's kind of bundled together with that. But as soon as that lease is signed, we should be able to start paying out distributions. So it wasn't, oh my gosh, this is the worst investment ever. It's not paying out. It's something bad happened. We acknowledge that we need to pause distributions, so we aren't digging out of that hole for the rest of the investment, right? And I saw another partner of ours, Tyler actually posted this quote, I think, but it was just about the effect of a bad decision early on is really hard to overcome cumulatively with good decisions. Like you can make nine great decisions. But if that first one was really horrible, those nine decisions aren't gonna those nine great decisions afterward that aren't gonna get you very far. It's, it's all about making the right decision right then. So we had immediate loss of revenue.

We immediately cut out the free cash flow distributions just to make sure that we could weather the storm. It looks like we're going to, we're very close distributions to resume. Hopefully, at the end of the first quarter, maybe even the end of the fourth quarter. Anyway, the next property is Marketplace Commons. So this is in that same investment. Um It's a little bit of a smaller deal, probably 40,000 square feet, like I said, just earlier, we are finalizing a lease with a brand new tenant. Um that's called African Naturals, um really cool retail source. So they're gonna go in there and after that tenant um kind of comes online, we should be able to resume distributions other than that at marketplace commons. Um It does have, you know, maybe a little bit of a root problem. I think we put a band aid on it for this year, probably gonna have to give it some more attention next year or the year after. Um But for now, pretty good that property, the distributions are with the uh the other property, right? So we have to look at those two properties together to decide when to do distributions. Yes. So the the fund up top is where the equity rates happened and the distributions happen and both properties distribute to the fund and then the fund distributes the investors.

So both of those properties are cash flow positive right now. Um Like I said, we're just retaining the cash and the property to pay for these leasing commissions and tenant improvements for the new revenue we're getting. Um Anyway, that's, it was Saint Louis the next one is in Wichita. Right. So a lot of people got involved on this deal. Um This was an equity raise we did in the beginning of January of last year, 2022. Um we bought 100 and 11,000 square feet in Wichita, Kansas and it was basically this massive shopping center, um some big box tenants, a dollar tree, um A lot of smaller shop tenants. And then we sold these three pads, right? And, and those three pads really allowed us to execute our home run of the deal, which maybe you can explain. Yeah, so uh we bought the center at roughly 8.5 cap. I believe so. Ok, just roughly 875 cap. But the pads when you carve them off, you sell those at a lower cap rate just because they're a simpler single tenant, triple net lease, maybe a little bit better credit than the in line tenants.

And so we sell those at, what was it? 6.5 cap. I think it was lower. I think it was blended. It was maybe six and a quarter, six and a quarter. So we're making a spread there and we made enough profit by exiting those in order to pay back 100% of the invested capital. So now all the investors that are in that deal, now, they've received more than 100% of their invested capital back, more than 100% of their invested capital and we're still distributing cash to them. So that really is the home run of real estate investing when you have no money in the deal and you just get paid checks without any money invested in perpetuity. And so that's where we are with Plaza West. I I calculated the net equity balance for Plazo West and nobody quote me. Exactly. But I believe the net equity for each investor was about 60 to 70% of their initial commitment. And like Joel said, that's already been returned and, and there's still quarterly cash flow um Plaza West made another great distribution this quarter. Um So super excited about that right? Because now we're in no rush to sell that. We have 10 year fixed debt at like 4.01% or something done like that.

So we're paying down debt like crazy because it was on a a different a schedule when we had more revenue. So it's not necessarily insanely cash flow positive right now, but it we're continuing to push rent. So the property's appreciating like crazy, we're paying down debt like abnormally aggressively again because of the weird a schedule from the partial sale and it's still cash flow positive. So massive deal. No rush to really do anything with that. No news is good news and zero risk for the investor because they're not guaranteed on the debt and they have 100% of their money back. So they're really at a risk free. Uh you know, 100% reward position. Well, on top of that, a lot of our investors took that money when we returned the money and invested in another property. So they're getting paid on two properties basically for one contribution. Bingo. Beautiful. Alright, leaving Wichita and now we're, now we're coming home. OK. So Broken Arrow, we have uh two different shopping centers in Broken Arrow. There's County line shopping center and Red Bud shopping center and Red Bud was really the first acquisition of criterion. It's a small little 20,000 square foot um neighborhood shopping center in front of a Walmart Super Center.

I'm sure you can guess the tenants, it's like every other little shopping center in front of a Walmart Supercenter across the country. So as I'm sure you can imagine because it's got relatively the same amount of tenants. Every everything is fine. The tenants are there, the tenants are happy. Um We're renewing leases when they expire. I think the last one we renewed was um towards the beginning of this year for the staffing company and I think we got a three year, five year renewal. No vacancies there. No, we've never had a vacancy there. Um So we're paying out what, 11 12%. It, I think it's 11. I mean, it may be like 10.5, 10, 7 but 11 ish. Um we'll continue to push that, you know, I think maybe next year it could be bumped a point. Um, it's still good. I mean, we've owned that now for three or four years. Four. And so we've been paying 11% for the entire time that we've owned it. Which is great. Yeah, we've missed one. I think we missed one quarter and that was this year and it wasn't even because it didn't cash flow. It was because we had spent some money from a reserve account, you know, and like deferred maintenance or, or, you know, leasing commissions on some of the renewals that water league or something that we had to pay the water league.

Um Yeah, so really great little center. Um The next one is, is County Line shopping center. So this is literally a mile, a mile down 71st Street still on 71st street. Um This is the one that is anchored by church on the move. It's about 70,000 square feet. Um And this was the second acquisition of Criterion. I think so. A really, I mean, nothing really happens there. We have, I don't think we've ever missed a distribution there. Have we? I don't, I don't think so. I don't think so. Um A great buy. I mean, you always hear money kind of or people say you make your money on the buy or it's harder to make money on a bad buy. Um County Line was a great buy. It just, it just was we're, I mean, we're making a great return for the investors now, but when we sell that property, we're gonna make huge, uh, huge returns for the investors. Yeah, we can't go into a ton of detail about it. But, um, right now it's church and the move and Dollar General. Dollar General is expiring, I think at the end of next year, maybe the end of January 2025.

Um, and there's kind of a bidding war on, on their space. Uh Dollar General kind of wants to say church and the move has been, yeah, they've been received well by the community. I, I think they have thousands of people going to church there every Sunday, which is kind of mind blowing for square footage that they're in. Um But anyway, right, like kind of kind of a bidding war over a space. So that's not gonna be bad for the investor. Um So that's, that's good news there. The next one is, oh, it's not on the list. We missed one. The criterion building, the criterion building in Oso, that's where we office. So the last suite um finished construction last quarter. Um The last tenant started paying rent last quarter. So it's been 100% leased, but we haven't been 100% occupied with paying tenants, right, just because of that last tenant's been and build out. So now uh that is nice. We'll continue to stack up cash the rest of this quarter. And I would imagine we'll make our first distribution at the end of the first quarter, next year, cash flow positive, really doing um great. It's a brand new building. So, and then that we're starting to pay later than we thought.

And just let's let people know exactly why that is construction took longer than we thought. Construction because of inflation. Uh Post COVID was higher than we thought. And we had a floating interest rate. So interest carry costs were also higher than we thought. So, despite all of those challenges, uh we still are gonna start paying distributions uh at the first of the year, um the project didn't, wasn't perfect because of those things that I mentioned, but it's great that the property is cash flowing and we're gonna be paying distributions. Agree. What about uh the Owosso Gym? The Owosso Gym, same exact thing. Um Very small building. There's two tenants in there. The tenants pay the rent, we're paying distributions. Um It's a metal building. It, it, it needs some parking lot repairs. I don't know if we're going to be able to squeeze them in before the winter. Um You need like 80 degrees to hot patch so we may get lucky. Um But yeah, no news good. Um ok, so that is a lot of time on what we currently have. Now, let's kind of fastly go through what's in construction and then even faster talk about what's in the pipeline, there's a lot going on.

Um So Smith Farms Two, this is the corner of 96 and Garnett. This is currently in construction. Um The Pickle Man's is a build to suit the Taco Costa ground lease that should be completed. Um Middle of February next year, we'll look for an exit probably Q two beginning of Q three of next year. Um Marine Creek is a build to suit Starbucks and multi-tenant strip center with the Shipley Donuts, um, smoke store, liquor store that is currently under construction about to go vertical. Um, I don't know the estimated completion date on that one. So I'm not gonna guess. Um, Nucky's hoagies, we just closed on that. The bank loan is scheduled to close at the end of this month, I believe. And then we can kick off construction there. Princeton pad sites development. Um 33 of the six pads are, are moving. Um, Chipotle is I think done. They may be open, I think at the end of this month we turned it over to them in September and then they have about a month, month and a half to do T I work so again should be done now or open. Um, the other two ground leases salad go and seven brew.

We turn those over to the tenants. Um, they have a six month kind of building period before they start paying rent. So we're in the middle of that. Now, we should see all three of those come online um, to the market for sale by the end of the year, I would think, um, if not, first of the year and again, look for exits of those at the end of the first quarter or in the second quarter of next year, the remaining three pads, we should look to mobilize hopefully before the end of this year or at the very beginning of next year. Um, Just waiting on permitting for Fat Burger and the learning experience. Um Burleson is in construction and I don't know the tentative completion date. I should a was so bad. Uh Garnett one, we are finalizing the Lois and leases. The Lois are are final. We're gathering those and moving those to leases. Um We're targeting lenders for construction. Hopefully you can close on that before the end of the year um and get mobilized maybe in January, the learning experience in Grand Prairie.

We have submitted second round of civil comments and should hopefully mobilize before the end of the year. The excess land, by the way is, is nuts. We've kind of got it pre leased. We've got somebody who wants to buy it. We're just waiting on the city to final uh finalize the reply and we can kind of just pick what we want to do. The business plan was to sell it. So part of me just wants to sell it because we've got a great offer. Um ok. What's next, um that, I guess is it for underdevelopment and then the pipeline? Ok. So there's three or four deals probably before the end of the year. Um, there's one closing in the beginning of November and it's like the smallest deal ever. So if you don't get the invitation to invest in it, you, you have to promise you that you're not upset with us. Right. I mean, there's only so much we can do, we can't put a $350,000 equity on the portal because 99% of people are going to open it. It's going to be oversubscribed immediately and then they're gonna be pissed off at us. We don't want you pissed.

So, um, anyway, the investors, we're gonna not piss you off by not sending it to you and having you get pissed that we didn't send it to you because you'll be less pissed. How, how's the plan good? We're sorry ahead of time. Uh Anyway, uh, a closing in Henderson, uh first week of November. Um, you may not see a lot about that, but it should be a great little deal. The next one is end of November. This is a learning experience, uh Build a suit, learning experience in Burleson, um, very close to the build a Suit uh retail shopping center in Hawaiian Rose we're doing there. Um So we'll see that close middle of November. You'll probably see packages on that come out. Um, the first of November very similar deal profile to the last um learning experience we did. I would say, what else do we have? We have a build to suit Starbucks that's closing before the end of the year in Jacksonville, Florida. Um I would say, you know, stand alone, stand alone with excess land. We've already got two offers I think in the excess land.

So just need to close and flip it out. We've got Carson City, we have Carson City that's probably middle to end of December. That's uh again, a fairly small equity raise. So be Johnny on the spot with that in November, we'll probably launch that middle of November closes. Beginning of December. I think that's the car wash or the gas. Yeah, it's a ground lease to a valve, I believe or some other, you know, we're, we're going out there in a couple of weeks. We're going out there next week. Yeah, we're going out there Tuesday to tour both of these sites. So flying into Vegas immediately flying to Carson City, we've got like an hour and a half in the ground check out the site. We're flying back to Vegas, checking out Henderson. Yeah, the mechanic shop first thing in the morning. So, and then we're flying straight back Tulsa very quick trip. Anyway, there's a lot more. Um, but it's not closing until next year. So we're not gonna talk about it. Running out of time. Got so much we ran out of time now. There's a lot, a lot going on right now. Hopefully you guys are getting involved, uh, pick a deal that you like and try to get invested on it and start getting the distributions.

Once you start getting checks in the mail that you didn't have to think about or worry about your life will change. You'll view commercial real estate and you'll view investing differently. Uh You know, I think I sent you guys something this weekend that talked about that the number one goal uh for people should be to separate their, their earning power or their income from the time that they invest in it. And that's what we want you guys to do. That's the only way to achieve the freedom and the wealth that you want out of this life as long as you're trading your time for money. Uh And even since you got something else, we trade time for money so we can buy back the money that we traded the freedom for in the first place. So think about that, right? We, we, we, we go to work uh to make money to buy freedom to buy back our freedom that we traded for the money in the first place. And so we want to get you out of that cycle. Uh Somehow that's messed up. It's kinda crazy. You know, think about this guys, you sign up and the world tells you it's OK to go to work for five days a week. Right? You're basically working for five days a week. So you can buy back 22 days of your freedom on the weekend, Saturday and Sunday.

And, and so that's the cycle that the world get you in and how they get you in it is they get you to get some student debt and they get you to, to get a house with a mortgage and they get you to get a car loan and, and credit card debt and pretty soon you can't get out of the trade of time for, for freedom time to get the money to buy back your freedom. And so by, by, you know, saving money and investing it wisely and getting distributions now that money starts coming in without you having to trade your time. Uh eventually you'll be making enough money passively that you can quit your day job and get, get all of your freedom back. And that's, that's really what we want you guys to try to do. We really need to do another episode. I'm gonna say it now while I'm thinking about it, about the the rate of return your money gets matters, right? Because I I think people think, oh, it's just double the return. So maybe you have to invest half the amount of money you guys don't understand every discounted cash flow or like savings calculator people have seen for retirement is assuming you make like 7% on your money. Let's do that same calculation. When you're earning like 18% on your money, it becomes a lot more motivating to invest because it's a realistic number, like $15,000 a year, $20,000 a year, it becomes like, oh, I can do that.

That's, that's a normal thing. And you still get millions of dollars in retirement. It's a very practical approach to investing. But anyway, that is it for now, we will catch you next week on how to invest in things.