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welcome to get rich education i'm your host keith weinhold we're talking about commercial real estate today where your tenants aren't families but rather your tenants are businesses you'll learn how the space of retail warehouse and industrial is a real paradigm shift from the residential world today on get rich education m.c lousher is the host of the cash flow ninja podcast and president of producers wealth he is on a mission to help you achieve financial independence and freedom as soon as possible he achieves this by integrating the infinite banking concept with real estate investments to increase your returns and recapture cash flow that you are not even aware of that you're losing mc shares the number one strategy of investors in his holistic wealth creation course at your own banking system.com finally total control financial gives you checkbook control of your 401k and ira money to invest in real estate it's time to get your retirement money into your own checking account but you've got to avoid the little known tax that you'll pay with any self-directed ira instead it's time for the qrp learn more and get your free copy of the qrp book by text messaging qrp in all capital letters to 72 thousand [Music] get rich education is brought to you by ridge lending group producers wealth lorata real estate and total control financial you're listening to the show that has created more passive income for people than nearly any show in the world this is the powerful get rich education welcome to gre from birmingham england to birmingham alabama and across 188 nations worldwide i'm keith weinhold and this is get rich education with an introduction to commercial real estate investing today we're talking about a big world with a lot of moving parts when we're talking about real estate where your tenants aren't families but instead they're businesses we're talking about retail warehouse and industrial primarily and don't think that retail and retail real estate is dead if you think so well not so fast as you're going to find out now in your residential say duplex or triplex or fourplex where you've got multiple families living under one roof well you would rarely if ever give any consideration to placing compatible families next to each other whatever that even means you're looking for qualified respectful tenants but think about how if you're the owner or landlord of a retail center well now there's more you've got to keep in mind it helps you to find a compatible mix of tenants for example if your strip center already has a nail salon you may very well seek a hair salon to put inside the same complex so those businesses can complement each other in commercial you've also got to understand the vital importance of a big name brand tenant known as an anchor store like a macy's or a nordstrom not only does your anchor tenant bring more foot traffic that benefits the smaller businesses but that anchor tenant also has the ability to pay for major advertising and that benefits all of the smaller shops in the same shopping center so you might accept a lower lease rate from your vital anchor tenant we're going to discuss commercial real estate with a great guest today's guest began building his personal real estate portfolio in the 1970s part-time while he was engineering for some of silicon valley's pioneering technology companies prior to becoming a full-time real estate investor and he's now bought and sold more than 4 000 units totaling nearly 1 billion dollars early on he focused in the residential space and today he offers commercial syndications to investors he's also the proud sponsor of the san francisco bay area commercial and multi-family investment club and you know interestingly the first time that i ever bought an out-of-state turnkey property personally it was a single-family rental home almost seven years ago and i bought it from our guest here welcome to get rich education mr tom wilson hey thanks so much for uh for having me on and thanks so much for your loyalty and and confidence and staying in touch with me and we saw each other a couple of other occasions here since then but it's been a while and i am always honored when folks stay connected with us as a former engineer you kind of have an analytical and spreadsheet background so just tell us about that and how that factored in to your transition from residential to commercial which is what you do today most of our clients actually are techies i think they uh they like data and as an engineer analytical person i can provide that data as time has gone on we we certainly have applied that we we have staff and underwriters who are also like-minded and i have core principles that i teach them and you know at the end they minimize allowing emotion to get involved in decision they they're focused on the numbers and what makes sense and can walk away from a deal i always tell my team that our long-term success is based more upon what we say no to than what we say yes to that's a great way to think about it and at some point you transition from residential which is housing where your tenants are people and families into commercial where your tenants are businesses tell us about that let's talk about the vernacular first of all which is uh kind of very confusing as often many terms are in any industry so commercial is based upon the word commerce which means that it's a something that has the intent of making money from it so until this last crash when hedge funds and a lot of us investors decided to make uh houses and a commercial asset class if you will by using those rentals predominantly you know multifam is also commercial although many people if they're not in that arena they they think of commercials non-multi-fan but indeed multi-fam is because the whole intent is to is to make money so uh i will try to distinguish that as we as we move forward so i bought my first commercial property or multi-fam commercial property back in 2000 and interestingly enough i is going on the market today for the first time because uh people are throwing crazy money at me and what we've done over the years i think one of the things that we've done very well is change your model as conditions change and as the market changes different asset classes and different markets have highs and lows people ask me what's the market like and i remind them that the market is thousands if not tens of thousands of sub-markets so each one does something differently so i've had owned nine ten multi-fam properties did well but a lot of people's perception is you had more and more individual investors investing in real estate as compared to reits or institutional investors i feel that their mindset often is well i've had rental properties i've rented something i think i understand about somebody needing to live somewhere so that feels comfortably so i'm going to scale up i'm going to go to multifam intuition sometimes is good and sometimes it's uh maybe not so good that's fine and i've had i tell people that they asked me what's your highest return cash flow property over in time and i say well it used to be multi-fam and they said well what was your worst well it was a multi-fam so there's a wide dynamic range you know of results but what happened as as post post-crash is that uh the demand for multi-fam not just houses for rentals but multi-fam in general increased and outstripped the supply so therefore the prices went up the cap rates went down i presume your audience understands cap rates amount of cash you would get in the first year as a return on a product if you had no debt on it so it's just that simple so as prices go up in any kind of real estate product rents never go up in proportion so the higher the price the harder it is to get that enough rent to give you as good a return as it used to be so when about five years ago one of my closest broker partners and i noticed this this trend but non-multi-fam commercial such as industrial office retail were not having that so much of an imbalance they weren't under the radar but they didn't have as much of imbalance so that's why he came to me about five years ago and said tom you know we've loved the multi-fam you and i just sold a big multi-fam for a cap rate of six and we've exchanged in two commercial buildings for eight and nine caps of returns i think we've got a window of opportunity here and doesn't mean that we may not do multi-fam in the future or do it if we find that it's uh one of those unique ones that has an exceptional return and good quality but in general non-multi-fam commercial in most primary secondary and tertiary cities across the united states now giving two two and a half points higher returns than multi-fam so it isn't we don't like them from a conceptual standpoint old fam it's just that commercial right now is doing better we're talking about non-multi-family commercial that is when you rent space to a business rather than families or people and you know tom some people just don't understand the very nature of a commercial deal so just tell us how that differs from residential well you know some of the fundamentals the same in order to get a good deal you got to have a lot of deal flow to look through somebody thinks they can walk into some broker's office and say i'm interested in buying uh you know a good value product the odds of them getting that is virtually zero you know it's very very very very very low but in commercial you gotta again each asset class is quite different so let's take industrial as one of the asset classes that is one of our favorites and we've done a lot of deals with that so there's single tenant industrial and there's multi-tenant industrial you think well industrial is industrial but no not the case it's um you know they're quite different in fact a multi-tenant industrial is very similar in many respects to uh to a multi-fam now a lot of folks say well all right i'll listen but i'm not so sure about this because i like in multi-fam that people have to live somewhere yep i agree so why do they live where they do oh it's because of all the commercial infrastructure that's around it it's where they work it's where they shop where they go to school all of that all the things that surround the multi-family which is a reason why they live there is commercial non-multi-fam commercial so in a multi-fam industrial this is a place that is an area where typically leases are three to five years they may not be as strong as say a national credit tenant but they are usually businesses that have been around for some time they're usually supplying local uh services and products to to the local region and they're way more solid and more credit-worthy than say a typical resident and a multi-family so i like that part we just closed on a 26 million dollar industrial multi-family in six locations 103 tenants 26 mil and in houston i like that a lot you've got this diversity of locations you got this diversity of tenants and it's worked by a full-time on-site industrial leasing agent who treats it maybe a lot like a multi-fam except it's a lot higher level they're dealing with higher level clients you don't get these kinds of clients that skip overnight unless they go bankrupt or really have trouble uh business-wise then they're pretty solid for some time now let's contrast that to a uh a single tenant industrial so why is that so different well first of all let me say like a multi-tenant industrial just like a multi-fam your next buyer is looking at what the track record is what's the t12 what's the t24 that means it's trailing 24 months of history of income and expenses right by looking at that then they can get a comfort that moving forward what kind of revenue they can see where some deficiencies and either the quality of the product or management that they can add some value to the product so forth you're dealing with a single tenant situation then what someone is buying is they don't really care much about the record what they care about is the lease they're buying the lease so when you're looking for single tenants uh industrial let's name what some of those are a lot of them are manufacturers you have warehousing you've got distribution you know how it's all over the news that uh all this uh e-commerce product and and distribution is now looking for last mile distribution places but uh that's getting the headlines but that's not the majority of industrial but you get a big variety and a lot of what we do is manufacturing and some some warehousing so in the case of a single tenant industrial it's quite different than uh than multi-tenant and that what you're buying or the what you're buying is largely the lease so typically leases are say 15 years sometimes 20 years and then they'll have 5 to 10 15 year renewal options on it now what tom's bringing up is key in residential you're interested in your tenant of course and you're vetting them or your managers vetting them based on that tenant's credit score and that tenant's personal income and that tenant's employment history and things like that but i think you could make the case that you're even more interested in your tenant because some of these leases can go three five even 15 years or more so you're going ahead and looking at the financial stability of your tenant and you're also interested in the durability of the industry that they're in totally agree so so we were buying a single tenant product and that would be true whether it's office or industrial or retail for that matter when you're dealing with single tenant you're buying that lease that's what you're buying and your whole goal is to establish in your due diligence and your research basically what's the likelihood of that tenant going bankrupt because these leases are so solid and they're like you said 15 20 years you've got annual uh increases and bumps along the way and and renewal options and if it's a tenant that has a lot of invested capital in that in that building or product i mean we have some industrial manufacturers that have to build and install the equipment first because it's so massive and then they put build the building around it or they put in the final wall they aren't too excited about moving so yeah so they're pretty solid so what's the risk the risk is they're going to go bankrupt before you sell the product that's your primary risk so what you want to do is get that risk down as low as possible in your analysis so what do we have we have a retainer fortune 500 cfos who do the deep dive and they look into the personal background and finances of the principles and see if there's any kind of liabilities that might uh come over onto the business we look at the study the market to see what we think their the market is that they're in what's their position in the market can you imagine an individual trying to do this yeah that would be impossible so you're talking about individuals that you have on your team that have a corporate background that can go ahead and vet the financials for these companies and you know think about how important this is if you're a residential investor buying a single family home or a duplex and you're probably going to pay whatever you're going to pay regardless of who the current tenant is but here in commercial think about how a property might be worth substantially more to you if you buy it with a tenant that's already in there and they're solid in their three years into a 15-year lease versus buying a commercial property that's 100 percent empty that might be worth a lot more to you you got that right sure too we've done some that are empty but you know it's a lot bigger risk and so anybody that's willing to take that on should have a lot higher potential return to help compensate for that risk so it just gives you a flavor for how critical it is to vet these and how that's very difficult for an individual to do or even for a typical listing broker they usually don't have the team and expertise to dive in as deeply as say a syndicator does who's doing this all the time and you not only have your own team but you've got partners you've got those on retainer who are available at a moment's notice to go vet something like that now having said all that as you can tell both vetting and managing a commercial non-multi-fam property requires i feel a higher skill set however if you have that higher skill set once you've navigated through that then it's really much easier to manage well with public companies it's one thing but with private companies it can be really hard to get data when you're going ahead and vetting these commercial prospective tenants that's right so as you can see requires a higher skill set in order to find and vet and manage products like this however if you have that skill set your team has that skill set by the way for i think a good syndicated should also have the capability to manage now if they aren't in the region they will oversee someone who's local who knows how to manage but at least your team your syndication team oversees it but once you have that skill set and you've navigated through the tough part of the due diligence then it's actually easier to manage and most of these single tenants are on what we call absolute triple net which means not only do they cover the taxes insurance and the maintenance but an absolute triple that they also cover uh all the structural issues if there's anything that comes up with the building and also all the bills don't come to you as the owner then then you sub bill the tenant they actually all go to the tenant so this is pretty nice stuff yeah that's pretty good we like that that is kind of the holy grail of real estate investing so we're talking about triple net leases where you as the landlord bill the tenant for things like the taxes the insurance and the maintenance cost here's the kicker that all sounds great and bro the first thing people think of oh yeah well i'll go buy a mcdonald's or some national credit tenant that's wonderful we just had a mcdonald's that sold 90 days ago in san francisco for a cap rate of 1.7 gosh so generally we do not do household name national credit tennis the national credit it means a a tenant that's been around a long time they have a big uh done in red street uh rating and so forth so you can tell traditionally and from the rejection of the analyst uh what their future risk is we're talking about household names like cvs walgreens starbucks a credit tenant so do you think if a name like that is on a tenant in the building you think you're going to get top returns on it no because people are buying largely security right they're buying their at least the perception of low risk so uh we don't do that because we can get double the returns by getting kind of the next tier down of folks that maybe no one else is not a household name but they've been around for a long time they're very solid they've got a big backlog they're in a good market they're in a good position within that market and once you've established all that okay i'll take double the return for maybe a little bit higher risk so we're always looking for the highest return risk ratio just to pick up on the triple net lease you know and again we're talking about where tenants are businesses and actually triple net can make sense from the tenant perspective because look a tenant they don't want to have to call the landlord when they're a business and say hey can we put our sign up can we add some counters over there can we paint this place can we add some shelving they don't want to have to do that so it lets the tenant run their business hire their vendors and run their business better than having to run everything through you the landlord so we talked about the term credit tenants a household name and typically you're buying safety there and you're not going to get a very good return because you have safety with those big name credit tenants and then we also have something in the commercial space called anchor tenants i think a lot of people know what that means but what does an anchor tenant mean to you in commercial real estate why are anchor tenants important well an anchor tenant is tenant in a multi-tenant building that is a household name company whether it's cvs or whether it's home depot or walmart so it's a tenant that is going to attract a lot of traffic so then the other spaces that are adjoining it or maybe in the shadow of it if it's a separate building but next to is going to benefit from the traffic that that anchor brings in now your rent from their lease from that tenant the anchor tenant is not going to be very high they can demand because they're the 800 pound gorilla a better rate however they're pretty solid they generally have long term leases and then you're able to get other shadow tenants to follow so that can be a good thing and we'd have some of that we have some uh strip malls i might mention we're talking about asset classes you know uh the headlines have kind of made retail a four-letter word and people think oh my gosh they might be an idiot to to be in retail now because because it seems sounds like all brick and mortar is going to be scraped from the face of the earth in the next few years and then you ask him do you really think that's going to happen well i guess not you realize that the largest e-commerce company in the world just spent 13.7 million for 460 stores with who's the whole foods and now i was walking by about three months ago in one of our local high-end centers and there's after a movie and there was a line out the door and i looked inside there are people in there holding books and it'll back up it says uh amazon books was that their plan all along i don't know so yeah i think people are selling retail too short are a third of the malls of the 900 malls in the country going to disappear of course are third of them going to do okay because they're going to convert some of their space to entertainment and service yeah i think they'll do just fine so it means you got to pick and choose carefully i especially like in the retail sector i like the neighborhood service centers that we've been calling them so we avoid that four-letter word retail name and uh service centers uh so i asked people so are you gonna get your hair done on the internet no i guess not you're gonna get your dog seen when you get sick on the internet no you're gonna have a beer with your friends on the internet no okay i get it so if there's a if they're service oriented i think retail's going to be just fine as long as they've got a good traffic count they're established in a community salad or the rooftops are going to be growing all those kinds of things we look at very carefully there are just so many things that you cannot do online you can't get your nails done online you can't get a haircut there some people may include it they like to go try on clothing before they buy it i mean isn't that amazing it's uh they still like to see if it really fits it exactly i've never shared a coffee or a beer with anybody online in my life yeah so uh sometimes you got to be careful with the headlines they're you know the journalists and editors are in for drama and they're selling media and so be careful i'd say in general always be careful about not drawing a broad rush conclusion about anything that you hear and in fact you know i think people ask me tom what do you consider to be the most important element in your success in your business and i say by having outstanding partners so we don't do any deal that doesn't have an expert in every aspect of that deal i would always rather take a smaller piece of the pie which returns to my own syndication team and make sure that i've got all the experts to cover all aspects of that investment so that we can maximize the return and minimize the risk not just for ourselves but especially for investors when i'm managing other people's money i take that very responsible very seriously it's astounding most syndicators think that they care about their own money until they're handling others money and then they find that they're even more concerned with that you're listening to get rich education we're talking with tom wilson about commercial real estate investing more when we come back i'm your host keith weinhold would you like to know the easiest way to create wealth and passive income with real estate this is marco santorelli with norada real estate investments now you can access the best deals without the stress or hassle of having to find renovate or manage those properties we save you time by providing you with passive income investment properties in some of the best u.s markets learn more by downloading your free copy of the ultimate guide to passive real estate investing there's no obligation and nothing to buy simply visit passiverealestateguide.com and get your free copy today that's passiverealestateguide.com for a real estate investor like you seeking an income property loan go to ridge lending group and mls42056 over the years you've heard president chaley ridge generously devote her time to you here on the show as a guest ridge provides investment property loans in most u.s states and you're going to find out how they've helped more people realize their dreams of real estate financial freedom than any other mortgage lender in the entire nation when you get started at ridge lending group dot com this is the real wealth network's kathy fetke and you are listening to the always valuable get rich education with keith weinhold welcome back to get rich education we're talking with tom wilson about something that just doesn't get discussed very often that is commercial real estate real estate where the tenants are businesses rather than the tenants being people and families that live there so you know tom there are a number of myths out there that have to do with retail and commercial i think we already helped dispel the one that everyone is buying from amazon you can't just buy everything from amazon another one is that the united states just doesn't manufacture anything anymore when it comes to industrial real estate can you speak to that another reason we really like industrial and i think a tough part for people to get their heads around and industrial is that they're used to seeing pretty buildings with retail or multi-fam apartments yeah but you could buy an industrial product it's plain wall buildings with often metal sides there's no windows in it people have to think what are they doing inside there anyway it doesn't look very pretty well but turns out a lot of them are doing some pretty important things their backbone of uh manufacturing often in america as automation increases we've got more and more manufacturing that's coming back to the us not only staying here because now we get rid of the labor component which is the main reason for going offshore in the first place and now we've got uh you know the cost of moving goods back and forth and now we've got who knows how the tariff wars will pan out but in general manufacturing is doing very well thank you in the united states and that's what a lot of these plain looking buildings have you know you take off a land from an airport you look down you usually see these just a sea of all these metal buildings down there and you think what in the world they doing yeah well a lot of them are warehousing a lot of our manufacturing the interesting thing too with manufacturing is that that's one of the few asset classes where you do not need to have the high traffic count high rooftop growth growing population so forth which are those key elements that we all have learned to look for in products like multi-family and why is that so a manufacturer they need two primary things they don't need the the expansion of population and so forth like you do in other asset classes like multifam what they need primarily is a stable workforce hopefully one that's not too expensive so it actually says that sometimes it's better on the outskirts or of a market metropolitan area or even rural and the other thing they need is transportation because they're manufacturing products they've got to get the products out of there easily so they got to have a good transportation routes that's one of those cases where you can actually find a product or a asset class that's counter to what our general training in education has been and what we look for in markets for uh something like a multi-family in residential you might want to buy in an area where in-migration exceeds out-migration but tom's telling us well that's not necessarily as important in something like industrial in the fact that manufacturing has become more automated and now that a robot is more likely to do work than a human does just think about amazon's warehouses for example that means things that were previously offshored maybe over to southeast asia where labor is less expensive can now be on short again because you have robots doing this work and the robots are doing this work still inside an industrial building so there's still industrial demand and they're still manufacturing but you might just have robots in those buildings more so than people absolutely all over the country it's happening so we're trying to snarf up as much of that as we can before the before people figure this out and drive up uh price and uh industrial tom in the commercial world people are often talking about ti which stands for tenant improvements and you touched on it earlier when a tenant invests inside a building themselves they're probably going to stay for a while can you speak to that well tenant improvement varies quite a bit in what gets negotiated in the long-term lease contract on who pays for it sometimes the tenant pays for everything sometimes the landlord pays for everything and sometimes it's split so you get all kinds of situations it just depends on what the current supply demand is and how long it's been empty and what each are willing to do so often the tenant does put in some money especially if it's specialized so if they're putting in specialized manufacturing equipment you know maybe it's medical related and they got some very specialized equipment in there they're going to be putting in all the specialized stuff once you have a tenant that has some of their own vested capex or capital into it yes it certainly reduces their incentive to move to someplace else think about some of those operations that happen inside a building think about if an industrial manufacturer installs a crane that's very specialized inside a building well that's a tenant improvement and it probably means that they're going to stay there for a while yep it sure does i just love these uh non-multi-fam asset classes uh we just the process of doing raise on a multi-fam and it's been two years since we did a multi-fam why it's so difficult to find one in these uh markets they really have the same kind of returns and most people are all about the returns and i am too as long as everything pans out so that's why we're so excited about and focused on the mostly non-multi-fam products and we're doing well we're just launching our 20th syndication you want to utilize a partner or a syndicator if you get in this business because you got to qualify for some loans and they're a little uh a little tougher to qualify for usually than uh than multi-fam you have got to have principals who can qualify for them so there's two or three different basic kinds of loans in the commercial arena if it's multi-fam most get if it's of any size you usually get a fannie mae or freddie mac loan they have long amortizations they've got uh sometimes they'll do regional banks that you may have a established relationship with commercial world you can get a cnbs or commercial mortgage backed security which is wall street money that gives you usually the best interest rate and the best amortization rate they're very difficult to deal with because their client really is wall street not you you're kind of the thorn that they got to put up with in order to deploy the money from their client but having said that not everybody's willing or able to navigate through that our team is so we get get a lot of those on our bigger deals and then regional banks are also an important player in it they tend to be recourse loans so you got to have someone who's willing to enable the sign on the recourse note which means you're personally guaranteeing it i don't want to give up a really good deal if we vett d it and feel the risk is extremely low we want the deal so your partner or your syndicator needs to have the ability to qualify for these loans that require a personal guarantee so we sign on a lot of those and obviously people say oh how much skin in the game you have well the biggest skin in the game is that i'm willing to sign on the note and i'm not gonna willing to do that unless i think this deal is outstanding you know one of the rules that i tell the team is are you like this deal good enough that you want to offer to your family and friends if anybody hesitates for five seconds and that's a good indicator that maybe should be out of there tell us typically with non-multi-family commercial financing what are we looking at for duration amortization fixed balloons and so on i'd say most commonly is probably about 10 years you can get them shorter and longer often you can get an interest only for a few years to help you if you're ramping up something that's has value add amortization usually once it converts from interest only is uh with a regional source is often 15 20 years with a commercial mortgage-backed security or fannie it's often 25-30 years the bigger guys that you're dealing with that give you non-recourse usually there's a high prepayment penalties if you get out early but usually they are assumable by your buyer so that's a good thing and sometimes they'll allow the buyer to put a second on top that makes it more sellable all these things are factors that are very important i can't emphasize enough also that relationships like anything in business in our world are so critical if you have a relationship with a lender or multiple lenders and you've done deals before and you're a closer and you get the deal done you service that loan they don't forget that you'll be a lot easier for you to get the next one though in fact they'll be coming to you do you have any deals tom any deals coming down the pike that we can do for you and we like brokers also we like to use uh brokers on occasion because sometimes you're not sure what's going to be the best deal they got access to multiple lenders it costs you an extra percent but they can present multiple options and if some reason it lasts 11th hour one of those bales then you have a pretty quick backup from someone else i think most real estate investors know and have heard that commercial buildings are depreciated over 39 years and residential are over 27 and a half years so basically that's 2.6 per year you can depreciate in commercial versus 3.6 in residential just tell us about the tenant improvements in the depreciation on those yeah well ti is 15 years so often there's a pretty heavy ti and when you're dealing with non-multi-fam commercial so that's a faster appreciation and in general even at 39 years the depreciation generally offsets the income in the first few years so you may get a nice check quarterly from a syndicator that's picked a really good quality deal but usually most if not all of that is uh offset by the uh depreciation on your k1 which is reported at the end of the year so in a syndication you don't notice you're you're buying shares they're private shares as opposed to public shares you're buying shares you get a k1 at the end of the year which is uh you know simple double page document they hand your tax repair and it's uh it's quite simple that's for you if you're participating in someone else's syndication which is what tom puts together for people and tom before we tell the audience how they can learn more about you is there any last thing about commercial non-multi-family that i should have asked you but didn't i think you covered it pretty well but i think it's more difficult for someone to make the leap into a category that it's not that visible to them or they don't have much knowledge about it and of course i always think it's good to get enough education like you provide for people to be able to ask smart questions but they don't necessarily have to do it themselves they just need to know to ask enough questions so that they can find a good quality source so right now in this market that we're in throughout the united states non-multi-fam commercial whether it be office or retail or industrial they're giving considerably higher returns and in fact i feel that many of these non-multi-fam deals are more resilient you got a strong manufacturer that's providing a uh essential supply chain product has been doing it for a long time you got a 15-year lease on it i think they're more resilient to the next recession than a uh say a multi-fam that may suffer from occupancy and having to lower rents and concessions i think it's an asset class all of these non-multifam commercial products are an asset class more people assume that they don't have the ability to understand or to reach for a non-multi-fam product and in actuality it's not that hard to learn enough to ask more questions or to find a source partner or syndicator who can provide that for them so it's really an asset class i think in both office retail industrial that everyone should consider putting in their portfolio with commercial it's been great to get a fresh perspective on renting property out to businesses rather than tenants how can someone learn more about you and what you do we love teaching we love sharing what we've learned with others we love when they also become clients but we just love sharing just as you do keith if they go to tomwilsonproperties.com they will get hold of the website for wilson investment properties on there is a lot of education information about commercial products a lot of examples of products that we've done we have a radio show that runs weekly and we've been doing it for six years so on that websites a lot of information and if you sign up for the newsletter then you get access to syndication deals that are only available to those that have a relationship with us as a syndicator tom after all these years it's been great to have you here thank you for coming onto the show thank you so much keith it's so much fun i know if you can tell but i have a bit of a passion for this and i love sharing what i've learned with others so thanks so much for having me on a lot of moving parts with commercial real estate investing often times where you're seeking opposite criteria that you are as a residential investor now i think we all know and believe that the internet and e-commerce sales they're going to continue to grow but brick-and-mortar retail isn't dead it's just different consider in fact that last year e-commerce sales accounted for just nine percent of all retail sales in the united states yes only nine percent and like tom and i said there are a lot of activities that you cannot do online people want to go out and shop together you might also remember that earlier this year in the south dakota versus wayfarer supreme court case it was decided that states may charge tax on purchases made from out-of-state sellers even if that seller has no physical presence in the taxing state well that tax on internet sales that could make them lose some of their advantage over brick and mortar retail oftentimes online sales are not as profitable as brick and mortar sales either because consider that online sellers they're the ones that need to figure out delivery and every consumer seems to expect free shipping today so there are many reasons that retail and even industrial is not nearly dead there's another trend that i hope you took notice of here if you've been listening the past few weeks you know after we chatted with ken mcelroy here a couple weeks ago understand that tom here today is the second get rich education guests in a row that wants to sell a significant portion of their multi-family apartment portfolio citing that many residential apartment prices are just too high and the yields are becoming too low that's a sign that you want to pay attention to in that particular space thanks to tom wilson today again you can learn more about him and even how you can come alongside him in commercial real estate investing at tomwilsonproperties.com if you haven't i would love it if you subscribe to get rich education you in fact are invited to do so in fact that is the way to be sure that you don't miss any weekly episodes that's with the subscribe button that nearly any podcatcher has until next week when i'll be back to help you build your wealth i'm keith weinhold don't quit your daydream nothing on this show should be considered specific personal or professional advice please consult an appropriate tax legal real estate financial or business professional for individualized advice opinions of guests of their own information is not guaranteed all investment strategies have the potential for profit or loss the host is operating on behalf of get rich education llc exclusively [Music] as america's third largest city chicago illinois has big economies of scale for real estate investors but there are problems with investing in highly taxed fiscally strapped illinois you can beat it when you invest in chicago land staying on the indiana side of the state line your property tax on a median indiana home is less than half that of an illinois property forbes ranks indiana is one of the top 10 states to do business with typical rents at 1250 and purchase prices at 125 k northwest indiana numbers work learn more and connect with the turnkey provider at getricheducation.com chicago that's get rich education dot com slash chicago 71 of americans aren't saving enough for retirement it's going to get worse as people live longer and you need to start thinking differently but you can't lose your time real estate is the investment vehicle that's made more ordinary people wealthy than anything else keith weinhold of get rich education is hosts of one of america's top investing shows disrupting wall street he's an international best-selling author a writer for rich dad advisors and has been an active income property investor since 2002 he has created thousands in passive monthly income for countless followers and now he has a free book the 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