The yearly turn over of residential rentals can be a grind at times. The beauty of commercial real estate are the long term leases. However they take time and lengthy negotiations.
In this video, I wrap up negotiations on a seven year lease renewal. You will learn a couple of my key takeaways.
1.) The longer term the lease and the larger the space usually means more negotiations, and therefore more back and forth.
2.) Start early when you have a large space coming up for renewal. Don't just assume that they will stay. You don't want to get surprised.
3.) Set aside TI (Tenant Improvement) dollars in your property budget. When you are negotiating larger lease deals, there is bound to be some build out or improvement dollars involved.
4.) Be patient. Since negotiating lease renewals can take time. You need not get frustrated if the target gets moved on you a few times. This particular tenant, changed their plans on how much space they were keeping and how much they were giving back a few times until they finalized it. In the end, they made the decision to give back space that will be extremely easy to rent and for a high dollar per square foot!
Do it. NOW.
Inaction is the root of failure. It’s what we don’t do which leads to our stagnation or downfall. Procrastination, we all do it. We say things like “I’m too tired”, “I don’t feel like it”, “I’m not ready”, “Maybe tomorrow.” These excuses are DREAM KILLERS. But what do we DO about it?
What you need to do is shut up and do it. Simple as that. And then you need to keep executing the daily critical tasks that are accretive to fulfilling your goals. At first it takes discipline, but guess what? Discipline starts turning into habit. And habit is action that comes natural.
Don’t you wonder why the wildly successful make it LOOK so easy? It’s because at one point in their life they decided to stop cheating themselves and started making SUCCESS their habit, not making bullshit excuses.
If you are a real estate investor, the world will stomp on your throat if it hasn't already.
Real Estate is simple... but not easy. Nothing worthwhile is.
Development of your mindset and your grit will carry you extremely far in this business. There are bad things that happen all the time in real estate investing. That's why so many people get crushed under the pressure.
Nobody is born with a winning mindset. You need to continually invest in your personal development in order to stay strong.
In this video, I witnessed a protest march outside of one of my buildings with many people who vehemently oppose real estate projects like mine. I am working amicably with the Tenants Union to find a solution that will displace fewer residents, but it's not easy, and not everyone will be a fan of the outcome.
This past week I was invited to Saint Joseph's homeless shelter on South Avenue near downtown Rochester. I was invited because there are members of the community who were concerned that my development project along with future development projects will contribute to the homeless population numbers.... not aid it.
I have done extreme things to avoid our city's homeless: ignored them, pretend they didn't exist; even been downright rude. I've been to soup Kitchens but I have never, ever stepped foot into a homeless shelter.... until now. Even this extremely limited encounter profoundly changed me.
I was so overwhelmed with emotions and thoughts after my visit that it took me hours to sit down and process what I witnessed.
I ended up learning that everyone has a story... and everyone is a person who deserves love and respect.
I also learned that we can receive wisdom, inspiration and understanding from the most surprising places. "Variety is the spice of life." They say. Inspiration usually comes from a path of thought outside of our normal day to day habits. It usually comes from the unusual person in our life. Expose yourself to what is outside your normalcy; you might be made uncomfortable but you will become inspired.
Small office and cowork space is in high demand! The 1,000 - 4000 square foot office space market is very soft right now.
Have available space in this range which you can’t seem to move? Consider converting it to a cowork space!
What I have learned is that small private offices are definitely where the demand is, not so much open cowork space. However most of the cowork space out there does lack the cool dramatic factor to it that cowork spaces like WeWork are experts at creating. So perhaps local developers haven’t been able to create a product desirable enough to create traction in this market.
Do you work on a cowork environment? If so what are your thoughts and what would you like to see?
As a real estate investor you may have the best intentions in your heart when you take on a new project, but chances are there may be adverse affects that your project may have on a community and it’s people. Are you aware of them?
We just purchased a dilapidated apartment building which was fully occupied with long term tenants. When I acquired the building I figured, “ah these folks will be happy to leave. These unsanitary and unsafe conditions are putting them in harms way.”
I was wrong in my assumptions. In fact, the tenants formed a tenant union to act as a united voice to stop the vacation of this building. I met with them this week to negotiate a solution that would be less painful than what I originally sought out to do.
Your actions have consequences. And sometimes they can have a mix of good and bad affects. You must balance the interests of your business and the interest of your conscience; create solutions that minimize the adverse affects you can have on your community!
Freedom - Real Estate Can Buy It
When we were kids, my parents missed out on a lot because of their jobs. I felt the pain of my parents absence at things that were important to me when I was a child. I can't blame them because they had work. Think of how many Americans are in this position!
One of the most important reasons why I invest in real estate is financial independence. As Americans, we are conditioned to receiving our weekly or bi weekly paycheck like a recovering addict is conditioned to receiving methadone.
Leaving the 9-5 can be scary (I had withdrawal symptoms after I quit mine), but by building a real estate portfolio in the background to your job, you will be surprised as to how much sooner you can create your own financial independence. When it comes to our retirement horizon, time has never been on our side. Each passing year puts wear and tear on our bodies and makes us less able to enjoy the things we want to do when we DO retire or become weaned off of a paycheck.
Real Estate investments have created this freedom for millions of Americans. You can participate too!
Matthew Drouin is a full time real estate investor and REALTOR with 12 years of acquisition, disposition, development and management experience in Rochester, NY.