Episodes
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How do real estate insiders spot lucrative opportunities in the market?
In this episode, Shane Melanson has an insightful conversation with James Nelson, a principal at Avison Young in New York City. James shares his insights on commercial real estate investing, drawn from over 25 years of experience in the industry. They discuss finding the right opportunities, building relationships with brokers, putting together a strong team, and getting mentorship as a new investor. James also talks about his new book, The Insider's Edge to Real Estate Investing, and his podcast. This episode is full of practical advice for those looking to succeed in commercial real estate investments.
So whether you're a seasoned investor or just dipping your toes into the market, get ready for an insider's perspective that might just change the way you view real estate.
[00:00 - 07:47] Expertise in a Specific Market is Crucial for Success
Mastery of a market is vital for successful commercial real estate investing.
Specialized knowledge gained through intense research enhances investor value.
Investing in commercial real estate requires a commitment to understanding the market's intricacies.
Focusing on a specific area and developing expertise leads to strategic and informed investment decisions.
[07:48 - 15:00] Strategic Focus on a Specific Asset Class and Market
Focus on learning the market and gaining insights from brokers before actively engaging in property transactions.
Cultivate relationships with active investment sale brokers in the targeted asset class and geography.
Communicate your learning process, willingness to bring sweat equity, and interest in building a credible team.
Avoid pretending to be more experienced than you are; honesty is crucial in establishing trust with brokers.
[15:01 - 25:58] Strategic Selection of Asset Class Based on Market Trends
Retail properties, once overlooked, present post-COVID opportunities due to decreased rents and increased investor demands for higher returns.
Knowledge of zoning changes or infrastructure developments can enhance value and returns.
Building a reliable team of specialists is crucial for navigating the complexities of commercial real estate.
Public-private partnerships are crucial for success, as they involve professionals with local market expertise.
Strategic partnerships and collaborations with experienced operators can help overcome financial constraints, gaining credibility and access to resources.
[25:59 - 41:05] Understanding the Nuances of Off-Market Versus Listed Property Transactions
Relationships Drive Real Estate: Commercial real estate thrives on relationships.
Listing vs. Off-Market Dilemma: The choice between listing a property and engaging in off-market dealings is pivotal, particularly in multimillion-dollar transactions.
The Leverage Advantage: Publicly marketing a property through brokers provides crucial leverage, compelling potential buyers to step up and compete.
Selling as a Numbers Game: Prospective investors must constantly analyze numerous deals to identify lucrative opportunities in the market for the best properties.
Seller's Motivation Matters: Understanding why a seller is parting with a property is a key factor in gauging the potential of a real estate investment.
Resource Mentioned
The Insider's Edge to Real Estate Investing
The Insider's Edge to Real Estate Investing - Podcast
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
“Honesty in commercial real estate is crucial for building genuine relationships with brokers, fostering a credible and fruitful partnership, rather than pretending.” - James Nelson
“Real estate success relies on teamwork, connections, and partnerships, with great professionals opening doors to excellence and transforming fear into opportunity.” - James Nelson
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In the realm of real estate investing, the difference between success and failure often boils down to a single choice: 'bet on the jockey, not the horse.'
Charles Carillo is the managing partner of Harborside Partners; a real estate syndication firm and has been actively investing in multifamily and commercial real estate since 2006. Since that time, he has invested in over $200 million worth of investment real estate. Charles is also the host of the Global Investors Podcast, where he interviews professionals about investing in U.S. real estate.
In this episode, Charles discusses asset management, due diligence considerations, and strategies for making safer returns. Whether you’re an experienced commercial real estate investor or just getting started, join us to learn more about multifamily real estate investing and what investors need to know!
[00:00 - 11:21] Starting off with Investing in Multifamily Real Estate
Charles Carillo on growing up in a real estate investing family and getting in the business from ‘06 Initially invested passively in syndications, then transitioned to GP role Pick the right GP/property and focus on cash flow from day one; find experienced GPs through personal relationships Raising money through podcast and referrals; understand the goals and skill sets of your investors and partners[11:22 - 15:20] A Look Into Asset Management Strategies
Asset management is managing the property manager, not the property itself Having conversations with property managers about rent prices, vacancies, and renovations Keeping the phone ringing to get people applying for apartments Needing to tighten up on underwriting standards due to delinquencies and collections going down[15:21 - 28:00] Tips on Finding Deals in Multifamily and Commercial Properties
Note that C class tenants have an average of $400 in savings, making them more likely to pay rent late The main key with better properties is that there's always buyers at every part of the market cycle Getting a discount per door is a huge factor when looking at deals It's important to not overestimate increases and overpay for a propertyConnect with Charles
Podcast: https://harborsidepartners.com/commercial-real-estate-podcast/
YouTube: https://www.youtube.com/@HarborsidePartners
Linkedin: https://www.linkedin.com/in/charleskcarillo/
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
"Asset management is really just managing your property manager and that's making sure that the property manager is doing exactly what they're supposed to, but you're also giving them guidance." - Charles Carillo
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Episodes manquant?
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Curious About Boosting Your Investments? Learn the Secrets of Networking, Research, and Asset Classes!
In this conversation, Shane Milson discusses the various ways to invest and earn good money through club syndications. Shane shares his advice on networking as a key factor to help secure successful investments, which includes listening to podcasts, connecting with people on LinkedIn or Twitter, and building relationships. Further, they examine the importance of doing extensive research when considering investing a large sum of money, such as looking at who is in the space being considered investing in, driving around, pulling titles, or speaking with commercial real estate brokers or mortgage brokers. Finally, they discuss the various asset classes and emphasize clarity when looking for potential investors.
Tune in to this episode for strategies on how you can turn your money into a smart investment!
[00:00 - 07:43] Finding Trustworthy Syndicators
Use your personal connections, especially those with financial resources, to find potential syndicators The more you learn about real estate, the more confident you'll be in selecting the right investment partners Focus on the trustworthiness of the people behind the deals – their character and intentions are key Podcasts offer a scalable way to get to know potential syndicators and build relationships in the real estate industry[04:07 - 15:01] Crafting Your Philosophy and Syndicator Search
The episode explores various strategies for finding syndicators, including networking, podcasts, and social media like LinkedIn and Twitter Listeners are urged to create a personalized investing philosophy based on goals, risk tolerance, and property types The episode emphasizes the importance of aligning your philosophy with syndicators who share similar objectives to avoid conflicts Flexibility and continuous learning are encouraged to refine your investment approach while maintaining clarity in your philosophy Investing is not about what you like but rather what you have a competitive advantage inYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"The more you can educate yourself, the more you're going to feel comfortable and confident in terms of determining who it is that you want to invest with." - Shane Melanson
"The more clarity you have, the more you're going to be attractive to the type of person that you probably wanna invest with." - Shane Melanson
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In the vast and intricate world of real estate, navigating without guidance can be daunting.
Today, Shane shares his insights on the ten things he wished he had known when he started in real estate, such as understanding different asset classes, getting clarity on what one wants and why, the importance of specialization and focus, and more. He emphasizes the importance of having the right partners, understanding one's strengths, and having proper expectations when investing.
Aspiring investors should not miss this episode! Tune in now for an insightful look into what it takes to become a successful real estate investor.
[00:01 - 04:55] 10 Things Shane Wish He Knew Before Investing in Commercial Real Estate
• Ten things to consider when investing in commercial real estate
• Understand the options of different asset classes, locations and why you want it
Specialize and focus on one asset class• Develop relationships and understand market timing
[04:56 - 08:47] The Value of Having the Right Partners in Real Estate Investing
• The importance of taking extra time and having someone else give perspective on a property
It is vital to find people you trust to execute a project• Knowing where you fit into the equation
• Real estate investing is a grind and not quick and easy
[08:48 - 11:51] Real Estate Investing Is Not the Only Way to Invest Money
• It is essential to understand where real estate investing fits into the entire scope of investments
Having enough capital and staying power is essential for successful real estate investing• It is beneficial to make money in other areas and recycle it into real estate investments
• Syndications are good, but owning the deal yourself can be more liberating and quicker
[11:52 - 13:57] Closing Segment
• Why investors should consider a four-by-four grid
Building, growth, keeping, carry, and performance categoriesYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
“I think in some cases people underestimate how valuable one or two key relationships can be.” - Shane Melanson
“I don't think you necessarily need to be an expert at doing a development or retail. What you want to be an expert at is identifying people that you can trust, that have this skillset and know where you fit into the equation.” - Shane Melanson
“Understanding kind of where you are, what your focus is, how much energy and effort you have to put into it, will help to determine what strategy you use.” - Shane Melanson
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Are you in the world of real estate investing and want to avoid common pitfalls?
In this episode, Shane Melanson unveils the keys to success in the property sector. The episode unravels seven vital strategies, from mastering market cycles to harnessing the debt market's pulse. While underscoring the importance of niche specialization and value addition, the speaker shares firsthand experiences, cautioning about pitfalls like mistimed sales and over-reliance on single tenants.
With these insights, listeners will be better positioned to make informed real estate decisions!
[00:00 - 07:05] 7 Strategies to Invest in Commercial Real Estate
Market Cycles: Prioritize buying during recessions and avoid competing with multiple buyers Value Add: Seek properties with potential for value enhancement Selling Strategy: Have a clear exit plan and recognize the optimal selling time Specialization: Focus on gaining deep expertise in one property asset class Capital to Take Advantage: Keep capital available for swift investment decisions Single Point of Failure: Diversify to avoid over-reliance on one success factor Debt Dynamics: Understand the role of financing and the challenges in the current lending landscape[07:06 - 13:30] Key Insights into Smart Real Estate Investing: Lessons from Experience
Shane warns against buying at peak market cycles, observing frequent investor frenzies in sectors like multifamily properties Shane's personal anecdote underscores the significance of selling properties at the right time, highlighting a missed significant return He suggests that while diversifying offers experiences, focusing on specific property types can be more beneficial With rising interest rates, investors should anticipate tighter financing conditions and the need for more capital in commercial real estateYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"Being a generalist gave me a broad foundation, but finding your niche can offer a significant advantage." - Shane Melanson
"When it's a buyer's market, or there's less competition, smart individuals can truly take advantage and prosper." - Shane Melanson
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In today's episode, Shane Melanson offers a review of a podcast featuring Jeremy Giffon, as introduced to him by David Senra, host of "Founders Podcast." After thoroughly listening to the interview from "Invest Like The Best" multiple times and taking extensive notes, Shane aims to share insights and principles he found particularly relevant to commercial real estate and investment.
Don’t miss Shane’s reflections on the notes taken and his personal thoughts on the subject!
[00:00 - 08:04] Key Takeaways from Jeremy Giffon's Real Estate Insights
Jeremy Giffon emphasizes the value of a business model where individuals can gain equity through their knowledge and wisdom By eliminating bottlenecks, businesses can unlock hidden potential Understanding why a seller is in the market can reveal critical deal insights Quick decision-making can be a significant competitive advantage Stakeholders must share common goals for optimal deal success[08:05 - 18:16] Harnessing Timing, Simplicity, and Authenticity in Business Investments
Jeremy capitalized on a fund winding down after a big win with Uber, underscoring the role of timing in investments For newcomers, avoiding needless complexity and building a solid reputation are vital for success in the commercial real estate realm Satisfaction arises from aligning actions with genuine desires rather than just chasing monetary gains Beyond funding or social presence, consistent problem-solving defines a business's long-term success[18:17 - 24:04] Resilience, Relationships, and Revelations
The importance of reliability in business relationships is underlined, with a focus on an investor's trust and peace of mind when collaborating with partners Even a small online presence can yield major business opportunities Jeremy's view on mentorship emphasizes genuine interactions over formalities Shane delves into subtle human interactions and concludes with a reference to John Stuart Mills' philosophyYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"The reward for good work is getting to do more work." - Shane Melanson
"Look, price is always important. Terms are important, but at the end of the day, if you're dealing with an asshole who makes your life hard, generally speaking, there's not enough money that is going to be worth dealing with that headache and aggravation." - Shane Melanson
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Are you aiming to receive advice to avoid costly mistakes in your real estate endeavors?
Sharing personal experiences and costly lessons, Shane Melanson stresses the importance of gaining insider insights and critical information before making investment decisions. He highlights the value of consulting with experienced individuals, conducting thorough research, and building relationships to succeed in the competitive landscape. Additionally, he offers mentorship sessions to share valuable insights and benefit a broader audience.
Adopt a long-term perspective and embrace the challenges, knowing that the effort invested in obtaining valuable insights will pay off in the pursuit of significant wealth through commercial real estate!
[00:00 - 05:38] Learning from 'Billions' and Bodybuilding
Shane Melanson recounts a personal anecdote about receiving a call from a friend seeking advice for a commercial real estate development project Drawing inspiration from the TV show "Billions," he discusses the legal aspects of gaining insider information in commercial real estate investing Shane emphasizes the significance of obtaining deep insights ahead of others in the market, such as tenant movements and rezoning bylaws Using a bodybuilding analogy, Shane illustrates how small but critical pieces of information can lead to significant success in highly competitive fields like commercial real estate[05:39 - 12:41] Lessons Learned and Mentoring Offered
Emphasizing the significance of gaining critical insights, Shane encourages consulting with experienced individuals to make informed investment decisions Thorough research and building relationships with knowledgeable professionals are highlighted as essential steps to obtaining valuable information in the industry He cautions against dealing with sophisticated landowners and developers without prior knowledge, stressing the need to approach transactions skeptically Shane considers offering mentoring sessions to share valuable insights and benefit a broader audienceYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
Set up a Zoom call: [email protected]
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"So I look at it with the perspective of, because it's hard, that's good because most people are not going to do the work that's required." - Shane Melanson
"Just realize that if you are buying a property from someone or looking to develop, try to get Intel, try to get that insight from someone." - Shane Melanson
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¡Reflecting on Podcasting, Business, and Lifestyle!
Join Shane Melanson in this episode to explore the purpose, evolution, and valuable takeaways from his podcast, empowering listeners to navigate business and lifestyle effectively, offering valuable insights, and exploring the alignment of his show with business goals and personal growth.
Discover the power of sharing philosophies, finding balance, and making informed decisions.
[00:00 - 07:16] Navigating Purpose and Evolution: Insights from a Podcasting Journey
Shane Melanson reflects on the purpose of his show and its value, questioning how it aligns with his business model and personal goals Initially driven by the potential for deal flow and raising capital, Shane acknowledges that after 200 episodes, he has covered most of the practical aspects of commercial real estate and development Inspired by Rob Dyrdek podcast journey, Shane realizes that their main reason for continuing the podcast is to share his business, investing, and personal philosophies The podcast serves as a means to build relationships with like-minded individuals who resonate with Shane's ideas and values while potentially repelling those who disagree The podcast has evolved from "how-to" content to selective interviews and cautious sharing of proprietary information[07:17 - 14:52] Finding Balance and Sharing Insights
Shane emphasizes the value of sharing personal philosophies and non-negotiables in various aspects of life He cautions against sacrificing well-being and relationships for financial goals, highlighting the importance of enjoying the process Drawing from experience and mentorship, Shane encourages listeners to align their business model with their desired lifestyle Shane t is willing to share insights to help others make informed decisions and avoid mistakes Grateful for the support, Shane invites listeners to join him on his ongoing journeyYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Quotes:
"The main reason, at least for me, to have a podcast is to be able to share my business investing and personal philosophies." - Shane Melanson
"I think for me personally, number one, I wanna share more of what I'm learning, what I'm doing, and hopefully, you'll find that valuable." - Shane Melanson
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Sam Zell is the founder and chairman of Equity Group Investments. He was ranked last year as the 379th richest person in the world, with a fortune of $4.4 billion. I heard Mr. Zell on a recent podcast and couldn't help but jot down some notes. I ended up with 8 pages that I'd like to share on today's podcast.
Listen to the interview here: https://tim.blog/2020/01/23/sam-zell/
[00:00 - 09:50] Lessons from Sam Zell and Expert Strategies for Investors
Gaining wisdom from renowned real estate investor Sam Zell as he shares valuable lessons from his journey in commercial real estate Strategies to navigate common obstacles faced by aspiring investors, including finding secure properties and raising capital for commercial projects Essential concepts for successful investing, including market analysis, risk assessment, and understanding supply and demand dynamics across asset classes What is standing between you and your goal[09:51 - 19:42] Sam Zell's Real Estate Investment Insights: Supply, Competition, and Risk in Focus
Valuable insights from Sam Zell on understanding supply and demand dynamics, reducing He emphasizes the importance of identifying areas with high demand and low supply to maximize investment returns Sam highlights the significance of objectively assessing deals, understanding core assumptions, and seeking diverse perspectives to minimize risks associated with emotional attachment and overlook Economics 101 A few questions to ask when getting into a deal[19:43 - 32:56] Navigating Risks and Building Relationships in Commercial Real Estate Investment
Shane reflects on the importance of identifying key assumptions in investment deals and emphasizes the need to focus on potential risks rather than just the upside He emphasizes the significance of understanding the economics of a deal, including supply and demand dynamics and tenant preferences A well-rounded team and diligent information gathering for informed decision-making in commercial real estate is neededYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
Visit my website for more information on my services, new book, and my blog.
Follow me on Facebook and Instagram.
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
"You don't know what you don't know. I'm more afraid of the person who knows it all versus the person who's asking questions." - Shane Melanson
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Have you ever wondered why proformas play a crucial role in the world of land development?
In today's episode, Shane Melanson unveils the significance of realistic assumptions when embarking on a development project, shedding light on how entrepreneurs are transforming investments into lucrative net worth and passive monthly cash flow. Discover the challenges of obtaining reliable information gaining insights into navigating competitive environments, seeking mutually beneficial partnerships, and anticipating underground civil complexities.
This episode unveils invaluable advice for those aspiring to achieve success in the realm of development.
[00:00 - 06:42] Navigating Proformas and Assumptions
A proforma is considered a story that encompasses all the assumptions of a development project, enabling developers to gauge the authenticity of the numbers involved Developers can manipulate certain figures in a proforma, such as interest rates, rental rates, cap rates, and costs, to create desired outcomes, highlighting the need for careful analysis and scrutiny When considering new development opportunities, developers should thoroughly examine the assumptions underlying the proforma, particularly regarding costs and rents, to make informed decisions and ask relevant questions Obtaining reliable information and connecting with experienced individuals in the industry can be difficult, requiring trust-building and understanding the motivations of those involved[06:43 - 11:58] Thriving in a Competitive Environment
Developers operate in a competitive landscape with limited land and development sites, so it’s important to understand the competitive nature of the industry It's crucial to identify trustworthy individuals for guidance and information while recognizing that their experiences and perspectives may vary By asking the right questions and gaining practical experience, developers can refine their assumptions over time Understanding costs, revenue, and debt and prioritizing cash-on-cash returns helps developers make informed decisions, avoiding manipulation of metrics like IRR and cap ratesYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
"And so when you combine the right questions with the right people, that's when you can start to formulate and put together your own set of assumptions," - Shane Melanson
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Ready to Master Commercial Real Estate Investing?
Discover the eight non-negotiables for success in commercial real estate investing, gain strategies, including market demand analysis, and build key relationships to create substantial wealth.
Don't miss this vital conversation - tune in now!
[00:00 - 04:46] 8 Non-Negotiables for Investing in Commercial Real Estate - Learn How to Create Significant Wealth Today!
• Three fundamental principles to look for when identifying a commercial property
• Strategies and practices to create wealth investing in commercial real estate
• Shane's eight non-negotiables to investing in commercial real estate
• Principles include: size, control, functionality, and below replacement value
• Opportunity to download Shane's eight non-negotiables
[04:46 - 08:46] Understanding the Demand From Tenants
• Shane focuses on adding value and forcing appreciation by finding opportunities that others don't see
• When looking for a deal, consider location, property (functional, title/legal), and tenants (demand)
• Apartment buildings are the easiest to understand but also saturated
[08:47 - 12:56] Understanding the Market
• Understanding the demand is key, not just going after one asset class
• Retail is not popular due to e-commerce and online buying
• Mitigating risk and going after the right tenants can create tremendous opportunities
• Relationships are important for understanding the market and taking risks out of deals
• Industrial real estate can be a great investment opportunity
[12:56 - 17:01] Verifying Demand in the Market
• Control the deal to dictate the terms of the deal and become part of the general partnership
• Understand the demand for the asset class in your market
• Create a list of personal connections, leasing agents, and owners
• Become an expert in your market area
• Bring in the best agents to sell the product
[17:02 - 20:51] Exploring Unfair Investing Advantages and the Risk of Commercial Real Estate Agents
• Verifying demand for a market is important to understand before investing
• Unfair investing advantage can be achieved by understanding the tenant's needs and exploiting gaps in the marketplace
• Relationships and connections with owners, commercial brokers, and business owners are key to success.
[20:51 - 22:10] Enhance Your Commercial Real Estate Reputation
• Investing in commercial real estate requires protecting your reputation
• Get a copy of the 8 non-negotiables included in the Commercial Real Estate Scorecard
• The scorecard is a 5-page document with graphics and mind maps
• Contains information from over 15-20 books on commercial real estate investing
• Get it by visiting club syndication.com and entering your name and email
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
"Just because it's the easiest does not necessarily mean it's the best asset class to be in." - Shane Melanson
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Get ready for an insightful and dynamic podcast episode as we sit down with Shane Melanson to unravel his secrets for wealth creation through commercial real estate. Delve into the world of club syndications, direct deals, and passive investments. Discover the power of a strong corporate culture and values and how leading by example fosters a united and success-driven environment. Shane will also reveal strategies for building long-term client partnerships and ditching traditional RFPs for more fruitful relationships.
Join us as we explore the art of wealth creation and preservation through the captivating realm of commercial real estate!
[00:00 - 02:06] Kalmoir's Long-Term Partnerships
• Kalmoir's approach is to create long-term partnerships with clients.
• Investing time and energy into creating a successful partnership is more beneficial than going through the RFP process.
• Shane Melanson's goal is to give strategies and practices to create wealth investing in commercial real estate.
[02:06 - 04:17] Understanding the Importance of Culture
• Bringing new people in, noticed frustration when they don't have the same beliefs and values
• Taking responsibility for creating culture and expectations
• Example of his daughter making top tier soccer team: culture was very different - playing to win, fully committed, expectations were clear
[04:18 - 06:23] Lead by Example and Set Clear Expectations
• Leading by example
• Setting clear expectations
• Tom Coughlin's rule of showing up 5 minutes early for meetings
[06:23 - 08:32] Building Lasting Partnerships
• Creating a strong culture is key
• Aligned values are important
• Values should be simple and have a clear "why" behind them
• Partnerships with clients should be long-term
[08:33 - 10:50] Creating a Culture of Partnership: The Key to Long-Term Success
• Partnership is important to make decisions.
• Creating corporate culture is a learning process.
• How you conduct business will influence people.
• Pay consultants on time and don't nickel and dime them.
• Be consistent with your actions so people know who they're dealing with.
• Attract and build a team that buys into your culture.
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
"What you do is who you are" - Shane Melanson
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This episode of the Investing Advantage Podcast examines how to calculate the worth of a real estate development project. This episode explores the seven-step process for calculating a back-of-the-envelope (BOE) analysis to evaluate a new townhouse project. Learn about key terms such as cap rate, debt cover ratio, and cash on cash return and how to use leverage to maximize returns. Receive tips on hiring consultants and understand return expectations as well as testing assumptions and understanding risk profiles.
Tune in now to get the advice you need for investing in commercial real estate!
[00:00 - 07:53] Calculating Your Return on a Townhouse Development
• Cap rate is the return you receive if you purchase a property all cash
• Debt cover ratio is your NOI divided by principle and interest payments
• Cash on cash return is based on whether or not you have leverage debt or no debt
• Factors that influence cap rates include risk, future upside, and future downside
• Debt to yield ratio is helpful to understand the perspective of a bank
[07:53 - 15:32] Calculating a Five-Minute Back of the Envelope for a Townhouse Development Project
• Cap rate is calculated by dividing the NOI by the property value
• Debt to yield is calculated by dividing the income by the debt given
• The art of evaluating properties comes with experience and understanding of the market
• Calculating a five minute BOE involves seven steps such as purchase price, NOI, debt, equity, free cash flow, ROI and principle paydown
[15:33 - 23:09] Understanding the Impact of Leverage on Returns
• Small changes in interest rates, cap rates and rents can affect the valuation significantly
• Run the numbers first before buying land to understand how much you can pay for it
[23:10 - 28:55] Taking the Next Step in Commercial Real Estate Investing
• Understand return expectations and risks associated with the project
• Engage a contractor, lender, commercial broker and leasing agent
• Use financial calculator or app to calculate costs and revenue
• Build a team of professionals who are committed to the project
• Test assumptions and understand risk profile
• Get clarity on cash on cash basic metrics
• Understand discount rates and IRRs
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"There's like a science and an art. Today I'm really just focused on the science which is just the numbers. The art is evaluating the assumptions because as you'll see there's many assumptions. I'm only pointing out a few because literally this is something that takes years to really master." - Shane Melanson
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In this engaging podcast episode, Shane covers topics such as the importance of communication, planning, pre-construction process, leveraging consultants and architects to minimize problems and challenges, the role of a foreman and manager in the project, how long the process typically takes, budgeting for unexpected change orders, typical warranty claims, capacity to take on projects up to 2024, whether Kalamoir is bondable and provides references from their projects and more. Get insights into how to make your infill townhouse project a success! Tune in now!
[00:00 - 04:09] How to Earn Good Money Investing in Commercial Real Estate: 10 Questions Answered by Developer and Builder Shane Melanson
• How much money you can make on a project is a loaded question.
• Strategies and practices to create significant wealth investing in commercial real estate are available to accredited investors.
• 10 questions were answered from a new real estate developer looking at building a townhouse.
• Recommendations for mechanical, electrical, energy code survey, geo tax and structural consultants are provided.
• Communication frequency should be every two weeks with onsite meetings and daily/couple of days pictures updates through Procore software.
[04:09 - 07:55] Developer's Guide to Contingency Planning for Infill Projects
• Communication is key to avoiding surprises.
• Generally, a project will have a site supervisor, project manager, and coordinator.
• Hiring an interior designer can make a big difference.
• Infill projects typically take 10-12 months to build.
• Contingency of 5-10% should be used for hard and soft costs.
[07:55 - 11:39] How to Prepare for a Tight Budgeted Project
• Examples of unexpected costs like building code changes, offsite levies, power poles, etc.
• Development is risky and requires eyes wide open and cash on hand
• Common warranty claims include water issues, dishwasher problems, sump backups
• Pre-construction phase gives 4 months to work with developers and value engineer plans
• Construction is a tight margin business and needs to be planned in advance
[11:39 - 17:00] Building Your Dream Project with Biweekly Communication, Expert Staff, and Cost-Effective Solutions
• Generally, clients don't require bondable insurance for projects.
• Cost of insurance is passed on to the developer.
• Consultants are recommended to build a team for the project.
• Communication with client is biweekly both on site meetings and emails.
• Project timeline depends on staff size: foreman/site supervisor, project manager, project coordinator.
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Quotes:
"It's very expensive to have delays on your project. So I would just keep that in mind." - Shane Melanson
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In today's episode, we explore why hiring a general contractor is worth the investment. Shane Melanson explains that a general contractor can solve problems, prevent mistakes, schedule trades, get better pricing from suppliers, and coordinate and schedule everything, freeing up the developer's time to focus on finding deals and raising capital. The host also highlights the importance of evaluating the contractor's response under pressure and their ability to meet deadlines. However, there are reasons why someone might not hire a general contractor, such as if their cost exceeds the value, poor communication, or lack of experience.
So, if you're considering a construction or development project, be sure to tune in to this episode of Real Estate Insights and learn why hiring a general contractor is worth the investment.
[00:00 - 03:43] Tasks of General Contractor
• Contractors solve problems, prevent mistakes, schedule trades, and get better pricing on materials
• Coordinating and scheduling is not something that developers want to do themselves
• Developers can focus their time on finding deals, raising capital, and overseeing development
• Managing the general contractor and consultants is important for overseeing the project
[03:43 - 07:36] Expert advice on the benefits of a great general contractor for successful construction projects
• Experienced professionals value a great general contractor for managing projects
• Pre-construction involves involving the GC upfront to identify mistakes and offer solutions
• Look for a GC who can add value, get along with the architect, and handle pressure
• Manpower is important for executing projects, including a full-time site super, project manager, and coordinator
[07:36 - 11:26] How to Determine if a General Contractor is Worth the Investment
• General contractors can add value through pre-construction and buying power
• Cost exceeding value, poor communication, and lack of experience are reasons not to hire a GC
• A good contractor should make the client's life easier
• Finding the right contractor is important for successful development projects
[11:26 - 12:34] Developer shares the importance of knowing both sides of the equation in commercial real estate
• Importance of knowing both sides of the equation in construction
• Personal experience as a developer turned partner in a construction company
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Game for Real Estate Developers & Investors podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Quotes:
"What a contractor really does, from my experience, is number one; they gotta solve problems."
"The benefits of a general contractor are gonna outweigh what the cost is."
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Welcome to today's episode, where we will be discussing how entrepreneurs and professionals can earn good money and create significant wealth through investing in commercial real estate. Throughout this episode, our speaker emphasizes the importance of understanding one's priorities and resources when investing. Identifying whether you are an active or passive investor is critical so you can create a clear path from point A to point B in achieving your investment goals. Whether you're new to commercial real estate or an experienced investor looking to enhance your portfolio, this conversation provides valuable insights into creating a successful investment strategy. So tune in now to learn how to start investing in commercial real estate and take the necessary steps toward creating long-term financial stability!
Highlights:
[00:00 - 06:01] Learning how to create a one-page commercial real estate plan
• Club syndications offer opportunities for wealth creation in commercial real estate
• The one-page commercial real estate plan to define goals and a roadmap for achieving them
• Determining the investor type and asset class for investment
• Private real estate syndications are the focus of discussion
• Successful investors continually adapt and diversify their portfolio
[06:01 - 11:43] Key Concepts and Mistakes to Avoid
• Flexibility is key in designing a plan for commercial real estate investment
• Biggest mistakes for new investors include targeting too many properties, buying on price instead of value, and not understanding the market
• Quality of thinking leads to quality of decisions, actions, and results
• Commercial real estate investing roadmap includes foundation, property selection, debt/capital raising, implementation/optimization
• Three big buckets for investing: making money, growing money, keeping money
[11:44 - 17:19] Setting Goals and Expectations for Investing Success
• Financial goals and examples shared by people
• Starting point: list assets and liabilities, personal net worth, burn rate
• Investing expectations: realistic vs speculative returns
• FU calculator tool to calculate time, capital, and returns for retirement
• Reverse engineering goals based on clarity and obstacles
• Identifying resources, time, capital, knowledge, strengths, and weaknesses
[17:19 - 23:10] Tips for Identifying Your Investing Philosophy and Strategy
• Identifying resources: time, capital, knowledge, and relationships which are factors to consider in investing
• Prioritizing resources based on the scale of expertise
• Determining if you are an active or passive investor and if you will be solo or if you will raise capital
• How to have a clear investment philosophy, focusing on high-growth markets with more demand than supply
• Non-negotiables in decision making, including property functionality, leverage, cash flow potential, buying/building below replacement cost, and control
• Investing has a reasonable expectation of positive return, while speculating has highly uncertain outcomes.
[23:10 - 27:13] Learning the Language of Commercial Real Estate and Creating a Winning Investment Plan
• Betting on rising values in commercial real estate investing
• Understanding key terms (NOI, cap rate, DCR, DCRS) for better conversations with brokers, lenders, and sellers
• Creating a one-page plan: investor type, asset class, location, deal structure
• Framework for achieving the plan: goal, objective, strategy, priorities, actions
• Homework and tools
• Coaching opportunity for those interested in a deeper exploration of commercial real estate investing
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube.
If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate!
Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Investing Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quotes:
"The quality of your thinking is gonna lead to the quality of your decisions. The quality of your decisions will lead to the quality of your actions and that will lead to the quality of your results." - Shane Melanson
"Goal, objective, strategy, priorities, actions." - Shane Melanson
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Looking to become a successful real estate investor? In this episode, we're breaking down the competitive nature of the industry and sharing valuable insights on navigating challenges in real estate development and investment. From taking ownership and responsibility to understanding the emotional struggles involved, we've got you covered. So, if you're ready to play the game and win, tune in now!
[00:01 - 08:23] The Game: Navigating Real Estate Development and Business Ownership
Real estate investing is like a game that requires taking ownership and responsibility. The podcast is changing to focus on real estate development and business with a behind-the-scenes look at challenges and struggles. The podcast aims to provide a real perspective on investing in commercial real estate and to talk some people out of investing if it doesn't make sense for them. The competition in commercial real estate is fierce and new investors should be aware of the vast experience gap between themselves and seasoned players.[08:24 - 16:24] Lessons Learned from Real Estate Development Challenges
Real estate investing is risky - more investors go bankrupt than become billionaires. Many millionaires made their money in business before investing in real estate. Learning from challenges in real estate investing can save you from investing in the wrong property or person. There are always new ideas and strategies to consider in real estate investing, and success depends on being adaptable to changes in local and global markets.You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Investing Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
“When the chips are down, when things are very difficult, I find that is where you really find out who you want to continue to do business with versus the people that you know will quit when things actually start to get difficult.” - Shane Melanson
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Please take a snippet for intro
branded intro
main episode
If you could link to my linkedin profile that would be great in show notes
In this episode, Shane shares insights on observing successful individuals in desired fields. He shares about Fred, a successful restaurant owner, about his journey to success, emphasizing the importance of choosing the right business model. Capital alone is not a competitive advantage in development, and a unique competitive advantage takes time to develop. Shane reflects on his own journey and warns against following others' goals and values, stressing the need for individual thinking.
[00:00 - 06:36] The Importance of Choosing the Right Business Model
Valuable insights can be gained from talking to successful people in desired positions over lunch The speaker had a conversation with Fred, a successful restaurant owner, and learned about his journey to success Fred's success came from owning land underneath his restaurants and working 12-hour days for over 40 years[06:37 - 11:33] The Realities of Real Estate Development: Why Capital Alone is Not Enough to Succeed
A lady contacted the speaker about building townhouses in inner city areas and they discussed numbers and potential partnership Capital alone is not a competitive advantage in development and a unique competitive advantage takes time to develop The speaker realized the importance of having a competitive advantage and pursuing one's true passion Following in someone else's footsteps can be a trap and it's important to think for oneself and have clear goals and valuesYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Investing Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
“Choosing the right direction is far more important than just working hard.” - Shane Melanson
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In this episode, Shane shares insights on raising capital for real estate investment projects. He emphasizes the importance of transparency and honesty when approaching potential investors, acknowledging that no property is perfect. Shane delves into 10 crucial questions that smart investors ask before committing their money to a project, and discusses various factors that investors need to consider, including the experience of the GP team, contingency plans, and sensitivity analysis. He also addresses the challenges that real estate investors face in today's shifting market and the importance of considering potential scenarios such as interest rate increases.
[00:01 - 02:41] Uncovering the Real Risks and Challenges
Smart investors ask questions to evaluate risk and assess the loan-to-value ratio of a property
Building credibility by avoiding overselling a property is important
Ten questions to be prepared for when raising capital
The first two questions are related to risk and commitment
[02:41 - 4:50] Questions to Ask Before Investing in a Property
Investors should discuss both the pros and cons of a property
Honesty is key; don't only focus on the positives
Understanding the exit strategy is important, and there are different types of exits that may attract different groups of investors
Consider who else is involved in the deal, particularly high net worth investors
[4:51- 07:04] Smart Investing in Real Estate Projects
Unexpected issues and insufficient funds can lead to project failure, so investors want to know if other experienced investors are also involved
Cash on cash return is important for limited partners
Investors consider the GP team's track record and experience working together
Contingency plans and sensitivity analysis are crucial to manage potential project risks
[07:05 - 10:19] Investors Becoming More Cautious in Today's Shifting Real Estate Market
IRRs were previously based on cap rate compression and rent increases, but investors are becoming more careful in the current market
Limited partners seek adequate compensation for the project's duration, while also balancing fairness
It's important to consider potential scenarios, such as an increase in interest rates
You can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Investing Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
“Smart investors know that no property is all sunshine and rainbows. Like there are going to be challenges. Like nothing is perfect.” - Shane Melanson
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In this episode, Shane explores the concept of "value for value" and how it affects our decision-making processes. Discover the importance of creating urgency around products and services, and why paid advice is more valuable than seeking confirmation bias. Hear personal anecdotes on how paying for services leads to accountability and action. Join us for insights on human nature, motivation, and consumer behavior.
[00:01 - 04:54] Why Charging for Your Services Can Lead to Better Results
People tend to take free things for granted and may not place much value on them Giving away something for free can lead to less urgency and action on the part of the recipient Shane struggled with finding the balance between giving content away for free and charging for it Giving a course away for free did not motivate the recipient to take action Paying for a service can create a sense of accountability and impact how people prioritize their time[04:55 - 10:56] Why Paying for Services Can Lead to Better Results and Accountability
Personal experience taught the author the value of accountability and taking action when he borrowed workout CDs Shane pays his business partner for pre-construction work to ensure accountability and engagement People are more likely to value and take action when they pay for something Shane found that people who received free consultations only wanted confirmation, whereas paid clients sought honest advice Providing honest advice to paid clients can be more impactful and potentially save them millionsYou can connect with me on LinkedIn, follow me on Twitter, and watch my videos on YouTube. If you want to go even deeper into the world of commercial real estate, head over to Shane Melanson, a roadmap to investing in commercial real estate! Get my book Club Syndication - How The Wealthy Invest Their Money
LEAVE A REVIEW + help someone invest in commercial real estate with confidence by sharing this episode or clicking here to listen to our previous episodes.
Follow The Investing Podcast on all Streaming platforms. Deezer, Apple Podcasts, Google Podcasts, Spotify, or visit our YouTube Channel.
Tweetable Quote:
“The difference between paying for it and giving it away for free is just how people respond.” - Shane Melanson
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