As nearly $930 billion in CRE loans mature in 2026-up significantly from 2025-the market is witnessing a marked increase in delinquency rates, foreclosure filings, special servicing transfers, and bank accumulation of Real Estate Owned (REO) assets.[1]

This report synthesizes data from 2024 through early 2026 to provide a comprehensive overview of the distress landscape, highlighting the growing opportunities for investors to acquire distressed properties from banks and lenders.

CRE Loan Delinquency Rates (2024-2026)

Delinquency rates across commercial real estate portfolios have surged over the past two years, moving well past pre-pandemic averages. The distress is not uniform; it is heavily concentrated in specific asset classes, particularly office and, increasingly, multifamily properties.

Bank Portfolio Delinquencies

Data from the Federal Reserve indicates a steady and significant rise in CRE loan delinquency rates at commercial banks. The delinquency rate for CRE loans (excluding farmland) booked in domestic offices rose from a trough of 0.63% in the third quarter of 2022 to 1.58% by the fourth quarter of 2025.[2] This represents a 151% increase over that period and places the current rate at more than double the pre-pandemic average of approximately 0.67% to 0.69%.

Table 1 - All Commercial Banks CRE Delinquency Rate

The Federal Deposit Insurance Corporation (FDIC) further highlights the strain on larger institutions. In the fourth quarter of 2025, the non-owner-occupied CRE past due and nonaccrual (PDNA) rate for banks with assets greater than $250 billion stood at 4.06%.[3] While this is a slight decline from a peak of 4.99% in Q3 2024, it remains substantially higher than the pre-pandemic average of 0.58%.

CMBS Delinquencies by Asset Class

The Commercial Mortgage-Backed Securities (CMBS) market provides a granular view of distress by property type. According to CRED iQ, the overall CMBS delinquency rate reached a cycle peak of 9.60% in March 2026, having more than tripled from 2.93% in July 2022.[4] The overall distress rate, which includes specially serviced loans, hit an all-time high of 12.07% in the same month.

Table 2 - CMBS Delinquency/Distress by Property Type

Default and Foreclosure Filings

The increase in delinquencies has naturally translated into a higher volume of default notices, lis pendens, and foreclosure filings. While commercial foreclosure processes can be lengthy, the data shows a clear upward trajectory in lenders taking action to recover collateral.

National Foreclosure Trends

According to ATTOM Data Solutions, lenders started the foreclosure process on 289,441 U.S. properties in 2025, representing a 14% increase from 2024.[6] Bank repossessions (REOs) also surged, with 46,439 properties repossessed in 2025, a 27% year-over-year increase.

Regional Focus: Illinois and Cook County

The distress is particularly acute in certain major metropolitan areas. Illinois ranked as having the fourth-worst foreclosure rate in the United States in 2025, with one in every 248 units facing a filing.[6] The Chicago MSA recorded the second-highest number of foreclosure starts in the nation (13,312) and the highest number of REOs (2,033). This concentration of distress in Cook County presents a target-rich environment for investors seeking to acquire distressed assets from local and regional lenders.

CMBS Special Servicing Rates

The transfer of a CMBS loan to special servicing is a leading indicator of severe distress, signaling that a default has occurred or is imminent. The data from Trepp reveals a dramatic and sustained increase in special servicing rates over the past two years.

Table 3 - CMBS Special Servicing Rate Trajectory

The composition of specially serviced loans highlights the bifurcation in the CRE market:

• Office: The office sector has experienced the most severe deterioration. The special servicing rate surged from 10.52% in May 2024 to a record high of 16.90% in August 2025, eventually peaking above 17% in late 2025.
• Multifamily: While lower than office, the multifamily special servicing rate has grown significantly, rising from around 5.7% in mid-2024 to over 8% by late 2025.
• Lodging and Retail: Both sectors maintain elevated special servicing rates, generally hovering around 10% to 12%.

Bank REO (Real Estate Owned) Inventory

As foreclosure activity increases, banks are inevitably accumulating more distressed commercial real estate on their balance sheets. This accumulation of Other Real Estate Owned (OREO) ties up capital and creates regulatory pressure, motivating banks to offload these assets, often at a discount.

Table 4 - Bank OREO Balance Accumulation

By the fourth quarter of 2025, total bank OREO reached $4.37 billion. This represents a 68.4% increase from the Q4 2022 trough. The combination of rising REO inventory and a massive wave of upcoming loan maturities creates a compelling opportunity for well-capitalized investors.

"Approximately $930 billion of commercial real estate loans will mature in 2026, up significantly from 2025, and at least $126 billion of this amount is considered to be distressed."
- ForvisMazars, March 2026 [1]

As Burke Davis, Head of Real Estate Banking at J.P. Morgan, noted in early 2026, "Lower quality space is at risk of obsolescence. That could mean upgrades, but more likely repurposing buildings for different uses."[11]

Comparison: Current Distress vs. 2008-2010 Financial Crisis

A common thesis among investors is that the current commercial real estate distress is nowhere near the severity of the 2008-2010 Global Financial Crisis (GFC). However, a closer examination of the data reveals a more nuanced picture: while the systemic risk to banks is significantly lower today, the asset-level distress-particularly in the office sector-has actually surpassed GFC peaks in several key metrics.

Table 5 - GFC vs. Current Distress Comparison

Conclusion

The thesis that current distress is "nowhere near 2008 levels" is only half true. For the banking system as a whole, the current environment is far more stable.

However, for the office sector and CMBS investors, the current distress has already surpassed the worst days of the Financial Crisis, creating a highly targeted but historically severe opportunity for distressed asset buyers.

References

[1] ForvisMazars. "Navigating Distressed Properties in Commercial Real Estate." March 23, 2026. forvismazars.us

[2] Federal Reserve Economic Data (FRED). "Delinquency Rate on Commercial Real Estate Loans (Excluding Farmland)." fred.stlouisfed.org

[3] FDIC. "FDIC Quarterly Banking Profile Fourth Quarter 2025." February 24, 2026. fdic.gov

[4] CRED iQ. "CMBS Distress Rate Climbs to 12.07% in March 2026." April 3, 2026. cred-iq.com

[5] Trepp. "Special Servicing Rate Rises in March, Driven by Multifamily and Office." April 2026. trepp.com

[6] ATTOM Data Solutions. "2025 Year-End Foreclosure Market Report."

[8] FRED. "Balance Sheet: Total Assets: Other Real Estate Owned." fred.stlouisfed.org

[11] J.P. Morgan. "2026 Commercial Real Estate Trends." January 6, 2026. jpmorgan.com

[12] Wolf Street. "Office CMBS Delinquency Rate Spikes to 10.4%." November 30, 2024. wolfstreet.com

[13] Trepp. "Office CMBS Delinquency Hits an All-Time High." February 19, 2026. trepp.com

[15] Office of Financial Research (OFR). "Bank Health and Future Commercial Real Estate Losses." July 11, 2024. financialresearch.gov

[16] FDIC. "Bank Failures in Brief - Summary." fdic.gov

"How much repair credit should I ask for during diligence?"

There isn’t a one-size-fits-all formula, but there is a framework.

Most buyers treat due diligence like a courtroom.

They collect the evidence, build the case, and drop the hammer at the last possible second.

The old-school move is to collect everything, say nothing, then let your attorney do the talking with a hard legal letter dropped at 4:30 pm on Friday before due diligence expires, like a grenade.

I always hated this type of game.

It works maybe 10% of the time when the seller caves in.

The other 90% of the time, you blow up the deal, kill the relationship, or both.

I had to make a mindset shift that changed everything for me…

The moment you sign a purchase agreement, you haven't bought anything.

You've been awarded an opportunity to buy.

That may sound like a small distinction, but it's not.

That reframe changes how you show up for the next 45-60 days. Instead of going into war mode (collecting intel, hiding your findings, waiting to ambush) you go into partnership mode.

Because if there’s one thing that we know about CRE, it’s that something always comes up.

Every single deal.

Phase 1 findings, roof inspections, wrong lease language, easement or access issues, HVAC reports, or that second layer of roofing that was never supposed to be there (improperly installed, quietly leaking, and the seller has no idea you found it).

Ryan Holiday calls it The Obstacle Is The Way.

In CRE due diligence, the obstacles are the deal.

Here's what I do instead…

I get the seller's cell number, take him to breakfast, and check in throughout the process. As things come up, I share them. Not as ammunition, but as information.

Odds are, the seller already knows about that second roof layer. He just doesn't know you know.

When you bring it up calmly and collaboratively, you're not attacking him. You're solving a problem together.

That shift does two things:

1. Problems get smaller when you look at them together. What feels like a disaster in your head is often a known, solvable issue with a clear cost.
2. The seller starts to feel accountable, not defensive. He understands he's passing these problems to you, and there's validity in that.

If you want to hear a masterclass on this, listen to my conversation with Jaime Contreras.

Jaime is one of the best relationship builders I know in this business, and he actually pre-schedules a dinner with the seller after closing.

Some of his sellers have since become his lenders.

Worth every minute.

Will you leave a little on the table sometimes?

Yes. You'll get emotionally attached, you'll like the guy or gal, and you'll eat a repair cost you wouldn't have touched if it were negotiated the old way through legal channels.

But balance that against the deals you close that you would have otherwise killed, the sellers who become your lenders, and the reputation you build as someone people want to sell to.

The best deals aren't the ones where one side comes out a winner and the other is a loser.

They're the ones where both sides walked away thinking they left just a little on the table.

That's the deal worth doing 🤝

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I put together a tech stack list back in 2024, then again in 2025, and both times it was one of my most-read articles ever. I didn't plan to write it a third time, but the stack changed enough that I had to.

Last year, AI got smarter. This year, AI got hands. It stopped answering questions and started doing things: sending emails, building spreadsheets, updating your CRM, booking meetings, running outreach 24 hours a day without taking a vacation or making a mistake. That's the shift. Here's what's running my operation now.

Manus AI

This is where I spend the most time and money: $850/month, and it's worth every dollar.

Every morning at 7 a.m., Manus scans my calendar and inbox and sends me a debrief of what's on for the day. Every night, a Telegram DM lands with what got done. It builds spreadsheets, builds reports, and I train it by voice: I speak the skill, it builds the skill, and it remembers forever.

Claude AI

Still the sharpest LLM for complex work. I use it in team mode with shared threads, saved knowledge, and ongoing projects.

I dumped ChatGPT because it was too glitchy, too robotic, and too unreliable for the specialized tasks I need. Claude is more consistent, more precise, and just sounds more human.

OpenClaw

This is the most exciting thing I've built this year, and I built it with my son.

OpenClaw is a Claude-powered agent running on a Mac Mini on a second desk. It's connected to a model router, so it automatically picks the best AI for each task: Claude for writing, GPT Codex for code, a lightweight model for the fast and cheap stuff.

It has its own email, its own WhatsApp number, and its own phone number. Right now, we're building a 24/7 outreach workflow where it prospects, follows up, updates the CRM, and tags the right team member: nonstop, no mistakes, no days off.

IndustrialIQ.AI

Our in-house small bay acquisition software with an AI layer you command by voice. This is where the deals get found and underwritten.

The Supporting Cast

These tools are still pulling their weight:

• Wispr Flow: I barely type anymore. Voice in, clean professional message out.
• Loom: Every meeting recorded, transcribed, and logged. My memory lives here.
• Perplexity: Faster than Google for research. We have a team subscription.
• Remove Paywall: Everything is behind a paywall now. This solves that.
• Superhuman: Still the best email app, period. Inbox zero at least once a week.
• Google Apps: Command center for the whole team. Unmatched for storage and search.
• Apple Notes: Voice memos, quick notes, files on the go. Always open.
• Notion: Where all the marketing gets built and stored.
• 1Password: No more password chaos. Synced across the whole team.
• Beehiiv: This is where I push out my Newsletters.
• LandGlide: First thing I open stepping out of the car.
• Canva: Your $13/month graphic designer. Still standing.

The Evolution

Here's how it went:

• 2024: We used these tools to ask questions and get answers. Super Google.
• 2025: We started using them to organize and speed up our work.
• 2026: We're telling them what to do. And they're doing it.
• Next 6 months: We'll tell them the outcome we want. They'll figure out the tasks to get there on their own.

We're early, but not that early.

The shift is real: AI went from answering questions to taking action, and the tools that are worth keeping are the ones actually doing the work. Use the stack. Abuse it. And let the machines do the heavy lifting while you stay focused on the deals.

We knew the concept: clean it up, kick out bad tenants, install marketing, lease at market rates. Easy, right?

We'd both just read Who Not How. So instead of getting in the weeds ourselves, we hired a regional GM from a legit operator. She promised she'd install the marketing and leasing process, no problem. Three months later, nothing. We parted ways soon after.

We then went with a reputable third-party property management company. They do this every day, we thought. Three months later, same story: no real process and no predictable results.

Finally, we dove in ourselves, and within a few months we had a working system. After we built that system ourselves, we hired a team to execute it. The lesson: nobody can build your leasing process for you. You have to do the work, document it, and then delegate the execution.

Brokers and PMs are great at execution once the system exists. But expecting them to create your process from scratch is where lease-ups get delayed. And when deals stall, your partners start asking:

"Why is leasing taking longer than projected?"

Here's how you actually build a leasing process that scales, whether you run it in-house or hand it to brokers.

Three Conversion Points

Leasing breaks into three conversion points:

• Create Leads (getting eyeballs on your space)
• Convert Leads to Appointments (qualifying and booking tours)
• Close Appointments (signing leases)

Most operators skip straight to hiring someone and hoping it works. That's the mistake. You need to do it yourself first.

Create Leads

Run ads yourself for two to four weeks on Facebook, LoopNet, Crexi, and similar platforms, posting at least five ads per week. Track everything, and do it all yourself: the photos, the copy, the floor plans.

I explore this further in Fixing Small Bay Investing with Industrial IQ.

I've written more about this in Small Bay Industrial is My Favorite Asset Class of All Time.

After 10 to 20 total ads, pick the two winners based on the best cost-per-lead and inquiry volume. Once you have that template, you can hand it to your broker or in-house team and they can innovate from there.

Document Everything

Take 50 or more conversations and 100 or more DMs yourself. Record and transcribe them all. Find the pattern: what questions close, what objections come up, and what gets people to actually book a tour?

Here's our online lead script, under 100 words:

"Yes, it's available. What business are you in? New or existing? Great. The smallest unit is $3,500/month. What's your budget? How many square feet do you need? Perfect. My number is [XXX]. What's yours?"

From there, we move to the phone for deeper qualification. Once you've done 50 or more conversations, you'll have your script. Then whoever executes, whether a broker or team member, can follow it.

Close Appointments

Go on at least 10 tours yourself and record every one. Document your closes, draft your lease template, and build out your objection handlers, especially if you're converting a gross quote to NNN.

Track your conversion metrics at every stage:

• Cost per lead
• Leads per week
• Appointments per week
• Appointment-to-lease ratio

Once you know your numbers, leasing becomes predictable math. If five tours typically equal one signed lease and your marketing generates leads at $40 each, you can reverse-engineer your stabilization timeline and figure out exactly how much it's going to cost you per deal. Just dial up marketing spend and hold your team or broker accountable to those KPIs.

That's the "aha" moment. Leasing isn't an art. It's a process you can operationalize.

Why This Matters

When you tell your partners "leasing is taking longer than expected," what they hear is: "We don't have a system."

But when you can say, "We're running five tours per week, converting at 20%, and we need to increase lead volume by 30% to hit our 90-day target," now you sound like a savvy operator.

Start Building

The main difference between operators who hit their projections and those who don't comes down to one thing: building the process yourself first. Create your leads, document your conversations, track your closes, and then hand it off. Once you have the process, you can delegate execution to brokers or run it in-house. But you can't skip building the system.

The operators who stall are the ones who try to delegate before the system exists. The ones who scale are the ones who did the work first, documented it, and then handed off the execution.

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"If you started all over again, Saul, what would you do differently?"

I sat with that for a minute, made another cup of tea, and thought about how every decision I made seemed right at the time. It's only now, with distance, that I can see where I stayed too long or moved too slow.

Jeff Bezos has a quote that nails it:

"We are stubborn on vision. We are flexible on details."

That's the game. The vision (building value in real estate) never changed. But the details? The strategy, the asset class, the tactics? I should've shifted those faster when the market moved.

So here's what I'd do differently, broken into four moves.

Jump To Commercial Sooner

I spent a decade in housing and brokerage, selling 2,000 homes and renovating hundreds of them. It taught me everything: how to see problems, how to fix them, how to move fast.

But commercial real estate has leverage that housing doesn't. More complexity, sure, and more moving parts, but way more upside per deal.

Looking back, I could've made the move ten years earlier. Would I be further ahead today? Probably.

But here's the thing: you can't see it while you're in it. You only see it looking back.

Pivot Strategies Faster

Between 2009 and 2012, I was selling REOs (bank-owned properties). The model was printing money during the financial collapse cleanup.

But I got stuck. When the market started improving around 2012, I should've seen it coming and shifted faster. Instead, I kept riding the REO wave until it dried up.

Wayne Gretzky said it best: "skate to where the puck is going, not where it is."

I should've been more flexible, anticipating the next move instead of optimizing the current one. No business model is permanent. Even Apple and Tesla constantly evolve. The fundamentals stay the same (improve quality, reduce cost), but the execution changes with the market.

Focus on Quality

Early on, I chased quantity: more deals, more transactions, more activity.

But here's what I learned too late: quality assets require less of your time and attention, and they appreciate more over time.

Don't get me wrong: value-add deals are still the bread and butter. They deliver fast wins and taught me how to operate. But quality assets compound differently. Even without the quick value-add pop, they grow steadily and demand less mental bandwidth.

Learn Ground-Up Development

This one stings the most.

I spent years fixing problems on existing buildings through value-add and repositioning. It works, but it also gets saturated fast.

Ground-up development is a moat. Once you learn how to build from dirt (efficiently, affordably, and with quality) no one can take that skill from you.

The barrier to entry is high, the competition is thin, and the market doesn't saturate nearly as fast as value-add does. It's like an art form. You're not just fixing, you're creating.

That's a competitive advantage that sticks with you forever.

Looking Back

Here's the honest part: I don't have an ounce of regret.

Everything happened exactly as it needed to. Every skill I built in housing made me better in commercial, and every pivot taught me something new.

And if you asked me this question ten years from now, my answer would probably be completely different. Every year, you gain new wisdom, and the goalposts keep moving.

Fifteen years ago, I would've said, "I wish I built a massive house-flipping operation across the country." Today, that answer sounds insane. There's nothing left to fit and flip, because such a big portion of homes already got renovated in the last ten years.

The real lesson isn't about what I should've done. It's about staying flexible while keeping your vision clear.

"What's your biggest challenge in CRE right now?"

It's how I fill my bucket of ideas for my Sunday Value Builder newsletter.

Last week, one reader's response stopped me mid-scroll. It was just one word: "Partners."

I almost brushed it off. Too simple. But then I sat with it.

Partnerships are the most catapulting force in commercial real estate when you find the right match. And they're weapons of mass destruction when they go off the rails.

In this article, I'll show you the filter I use to separate the good partnerships from the ones that will blow up in your face.

Common Denominator

I got confirmation of this from Sanjay, who runs Avestor (a platform for fund managers and capital raisers).

I asked him:

"When you see operators fail, what's the common denominator?"

His answer? Hands down, partnerships gone bad.

Then I remembered something from a mastermind I attended.

Gary Keller, the guy who built Keller Williams into a real estate empire, said:

"It takes 5 minutes to get into a partnership and 10 years to get out."

That stuck with me. Early in my career, I said yes to everything. Every opportunity. Every handshake. Every "let's do a deal together." But only a few of those partnerships actually lasted.

Accepting the End

Here's what changed everything for me: almost every partnership has a beginning and an end. Very few last longer than you do, and there's nothing wrong with that!

When you accept that a partnership will eventually end, you start structuring deals differently. You think about the exit before you think about the entry.

You ask:

"If this ends, will it create more value than it takes?"

When you skip that step, one side inevitably feels short-changed on time, effort, or expectations. It makes the whole thing turn sour.

The Filter

This framework also made me pickier on the front end. Now, when a shiny new opportunity comes my way, I run it through one more filter:

Can I see myself working with this person (and enjoying it) for the next 20+ years?

It doesn't have to last 20 years. But if I can't even imagine it on day one? That tells me everything.

Let me give you an example. A few years ago, a group approached me with serious capital. More than I'd ever worked with. The shiny object in my brain screamed "Let's go."

But when I ran it through the filter (could I see myself with these guys for 20 years?) the answer was crystal clear. There wasn't enough gold on the entire planet to make me want that relationship long-term!

So I gave them the polite slow-play: "Let's circle back later this year." (Which, in my vocabulary, means: "thanks, but no thanks.")

Right-Brain Magic

Now, I didn't start here. I've had my fair share of pruning the garden: bad fits, misaligned expectations, partnerships I should've passed on. But that pain built this filter.

The 20-year test won't show up in a course or a YouTube video. It's not science. It's gut. Right-brain magic. And it's saved me more than once.

This philosophy extends to how I approach real estate deals. I explore the dynamics of value creation in my piece on small bay industrial investing.

Conclusion

The right partnerships can catapult your CRE business forward, but the wrong ones can destroy it. When you accept that most partnerships will eventually end, you can structure deals that create value even when they do. And when you apply the 20-year test upfront, you protect yourself from relationships that look shiny but feel wrong.

This filter has saved me from partnerships I would have regretted. It's made me pickier, and that's been worth more than any amount of capital.

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We're monkeys. We want more territory. So, we aim for the stars and hope to land on the moon. We stack goal on top of goal, resolution on top of resolution.

But entrepreneurs don't have a goal problem. We have too many "YESes" piled up like dead weight.

Before you reverse-engineer your 2026 goals, try this instead: Sit in silence and ask "what's gotta go?"

Pruning Your Garden

I call this section of my annual planning "Pruning My Garden." And honestly, it's the most important part.

I break it into two subsections:

What I Will Stop Doing

These are things already in your life. Habits, commitments, relationships, deals that drain focus and energy.

You're doing them now, and they need to go!

It could be a bad habit, a draining relationship, or a deal you keep life-supporting because you're too stubborn to walk away. Anything consuming bandwidth without producing results.

What I Will Say No To

This one's about the future. It's a filter.

When new opportunities float into your universe (and they will) this list tells you what doesn't get a "yes" anymore.

No more shiny object syndrome. No more saying yes out of guilt, FOMO, or politeness. If your gut sends you a weird signal (it doesn't matter how pretty that opportunity is), don't do it!

The Power

You see, most goals are already within your reach.

You don't need to increase the pace, pitch, or effort. You just need to remove the garbage standing in the way.

When you prune the garden, the goal gets easier. Sometimes you get things you didn't even set as goals just because you finally made space for them. It's that powerful. I've experienced this so many times.

So before you build the vision board, before you pick your "word of the year," ask yourself: What do I need to remove?

That question will do more for your 2026 than any resolution.

This pruning mindset has shaped how I approach deals too. I wrote more about finding opportunities in my guide to off-market deals.

Conclusion

Before you stack another goal on your 2026 list, pause. Ask yourself what needs to go. Your goals aren't out of reach because you need more hustle. They're out of reach because too much garbage is in the way. Remove the draining habits, the dead weight commitments, and the opportunities that don't align with your gut. When you prune your garden, the growth happens naturally.

Most goals are already within your reach. You just need to make space for them. So stop adding more. Start removing what's standing in the way.

What's getting cut from your life this year?

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It's a great question. It’s also a question I've answered a hundred times in one form or another.

On my birthday morning, scanning through questions like this, something hit me differently.

Every "how-to" I share (leasing, sourcing, underwriting, building value) didn't come from me.

Not really.

Every framework, every principle, every instinct I have was downloaded from someone else.

It was learned from people who, for whatever reason, were put in my life to shape me into who I am.

They're the giants. I just got to climb up and see the view.

So instead of another tactical deep dive, I want to do something I don't do enough: acknowledge my mentors.

One by one.

The Spark

Tony Robbins. Schaumburg, Illinois. 2009. Unleash the Power Within.

My wife Rosi and I sat in the Renaissance Schaumburg Convention Center at Unleash The Power Within, and something clicked. Tony introduced me to self-development. Not self-help, but the idea that you can actually design who you become.

I walked out believing anything was possible. It sounds cliché until it becomes true for you.

The Foundations

Coach Dapkevicius, my first rugby coach, taught me as a teenager that you can outrain and outwork anyone. It just depends on how many hours of undivided focus you're willing to put in.

Simple, powerful, and still true to this day.

Don Gudmundson at Century 21 broke it down for me early in my real estate career: "This game is easy: whoever makes the most phone calls wins."

Simple math. More calls, more wins. I've never forgotten it.

Mom and Dad taught me hard work, honesty, integrity, loyalty, and one unspoken rule: just get the shit done, no matter what.

The Expanders

Pat Hiban poured wisdom into me, but one lesson shaped our family deeply: love equals time. That's it. That's the whole formula.

David Osborn stretched my thinking. When I complained "there's no deals," he asked one question: "How many deals did you look at this week?" There are thousands of deals trading hands every day. You just have to find them.

Tim Rhode introduced me to designing life intentionally through a 5-year vision. Most of what we mapped out 10 years ago actually happened.

Arnold Kozys was my partner on my first commercial building. He taught me how to buy big. Thank you so much.

Rafik Moore (my friend, my partner, my brother in life) stretches me every single day and shows me what's possible in commercial real estate and in life.

David's question about finding deals is something I address in my breakdown of off-market deal sourcing.

The Coaches

Hector Torres, my Iron Man coach, believed in me when I fell off the wagon. He helped me get back in athlete shape.

Phil Towle, my performance coach, somehow pulls the right lever every time. He's helped me evolve my mind and soul into an ever-expanding entrepreneur and conscious human. It's not easy, but it's worth it.

My Vail mastermind brothers. Thank you for the friendship, vulnerability, insights, and accountability. You push me past limits I didn't know I had.

My Family

My kids: Marty, Nikolas, and Victoria. They stretch me beyond my comfort zone daily. They've taught me to be a student of life, not a teacher.

And my wife, Rosi. She showed up when there wasn't much in the bank account or on the résumé. She believed in us when I didn't have clarity on how far we could go. She keeps up with my insatiable desire to do more, expand more, transform more - all while keeping me grounded.

Conclusion

Here's why I'm telling you this:

None of us build anything alone. Every skill you have, every lesson you carry - someone gave that to you!

So here's my challenge: think about who shaped you.

The coaches, the partners, the family members, the people who believed in you before the results showed up.

And if you haven't told them lately, maybe tell them this week.

It's liberating to write this. I don't do it enough.

But at least on my birthday, I got to say it out loud.

Thank you to every person who showed up in my life, and for every teaching and lesson that helped to build who I am.

In this article, I'm breaking down the AI tools that replaced my old workflows, the no-code builders that let me create apps without touching a line of code, the classic apps that are still standing strong, and the CRE-specific tools that give me an edge in the field.

The AI Layer

These are the AI tools doing the heavy lifting. They've replaced assistants, search engines, and entire workflows.

Claude AI

This is my new workhorse. The team feature is bonkers. You can collaborate with team members on ongoing projects, brainstorm deals, or clarify complex stuff, all inside one shared thread.

It has extensive memory. It handles complex, multi-step tasks. $150/month, and worth every penny.

Wispr Flow

Replaced Superwhisper for me. Ever been juggling three conversations while walking to your car? Wispr Flow turns my voice dumps into coherent texts and emails that actually sound like me.

It's faster, cleaner, and now my default for anything I used to type.

Perplexity AI

I use this instead of Google for most searches now. Need to research demographics, lease rates, or comps? It's almost as good as CoStar or Crexi for quick clarity. It's right there, on the go, in seconds.

Manus AI

This one's for simplifying big data sets. When I need answers distilled from messy information, Manus thinks like an analyst. Manus is like having a brand new "spreadsheet guy" on your team (and available whenever you need him).

Lindy AI

This is where your 24/7 employees live (at almost no cost). I use it for tasks my VA used to handle. Example: finding an email or phone number for a contact. Lindy skip-traces LinkedIn and the web. If it's out there, Lindy finds it.

Another task this handles for me: scheduling. CC Lindy on an email thread, and it coordinates calendars, goes back and forth, and drops the invite into both calendars automatically.

ChatGPT

I hope, by now, everyone is using ChatGPT (even my dad does).

The Builders

No-code tools that let you build apps, presentations, and designs without needing a developer.

Lovable.dev

This is where you build fully functioning apps (with no coding required).

I created a due diligence checklist app for my team. Everyone collaborates on it. Everyone loves it.

Some people are building apps here and selling them. Wild times.

Gamma.app

Game-changer for slide decks, presentations, and flyers. You talk, it builds. Voice-to-slides. I've personally designed presentations that don't feel like a bot made them anymore. Hands down the best presentation tool I've found.

Canva

Still here. Still your $13/month graphic design assistant. Flyers, social posts, marketing decks. All done in minutes.

The Classics

These apps survived the AI purge because they still do their job better than anything else.

Superhuman

Still my favorite email app. AI that corrects your emails. Swipe gestures. Snooze. Send-later. Team comment threads that kill endless back-and-forth. I hit inbox zero at least once a week.

Google Apps

Our command center. Universal folder hierarchies. Naming conventions across the team. GDrive's mobile collaboration is still unmatched.

Apple Notes

My second brain. Daily planning, collaborative checklists, sending OMs on the fly. It does it all.

Notion

Where all my marketing happens. I'm writing this newsletter in Notion right now. The collaboration features are next-level.

1Password

Losing 15 minutes a day to password chaos adds up to 60 hours a year. 1Password solved that. Syncs across devices. Updates for the whole team. Stores logins, credit cards, everything.

Beehiiv

Best platform for sending emails to many. I use it for this newsletter and for investor communications. It has that human, one-to-one feel (not the cold MailChimp vibe).

CRE-Specific Tools

If you're in commercial real estate, these are non-negotiable.

Industrial IQ

This is our in-house Small Bay Industrial acquisition software. Opening to the public soon.

It's a superpower for getting in front of small bay owners. 10x (maybe 100x) speed on targeted acquisitions for small bay industrial.

I wrote a blog about this. Click here to read it.

Karl's Mortgage Calculator

Negotiating seller financing? Running cash flow scenarios? I've calculated numbers on the fly mid-phone-call. This app is your best friend.

LandGlide

Plat maps at your fingertips. First thing I check before stepping out of the car. Square footage, neighboring owners, property lines, everything I need.

Bonus Apps

A couple more tools that make life easier.

• Riverside: best software for virtual podcast recordings. Records locally on both ends, automates short clips, makes post-production painless.
• Grammarly: spell-checks my texts on the go. When I'm not using Wispr Flow, Grammarly catches the typos.

Conclusion

That's the stack. Here's what matters: AI tools like Claude AI, Wispr Flow, and Lindy AI are replacing entire workflows. No-code builders like Lovable.dev and Gamma.app are letting you create without technical skills. And the classics like Superhuman, Notion, and Google Apps are still standing because they work.

The game has changed. What used to require a team of assistants and a mountain of subscriptions now runs on a handful of smart tools that actually talk to each other.

Tech helps, but the fundamentals matter more. I cover the essentials in my proforma lessons.

Use it, abuse it, and let AI do the heavy lifting so you can focus on deals.

If this helped, join my Value Builder Newsletter for more.

My business partner, Shea Lewis, has too. We’ve both built businesses in this niche, and we kept running into the same wall: the tools we use every day just aren't built for us.

So, we decided to fix it. Together, we're building Industrial IQ, a software platform born from our own frustrations and designed specifically for the modern small bay operator.

The Old Way

We've all been there. You are trying to underwrite a potential deal by piecing together information from a dozen different places.

You might use:

• Consumer-focused sites with outdated listings
• County records that are slow and hard to search
• Broker reports that only tell part of the story

This manual process is slow, inefficient, and often relies more on gut feeling than on hard data. It creates a massive disadvantage when you need to move quickly on an opportunity.

A New Approach

Industrial IQ changes that. We are building a single, powerful platform to give you everything you need in one place. It is designed to help you acquire properties easier and faster.

At its core, Industrial IQ provides:

• A Nationwide Database: We are compiling a comprehensive list of small bay industrial properties across the country, so you can stop searching and start analyzing.
• Live Leasing Comps: Get access to real time leasing rates and market data. This helps you understand a property's true potential without the guesswork.
• Deep Market Insights: We pull in key demographic and economic data for every area, giving you a clear picture of a market’s health and growth trajectory.

The AI Edge

This is where it gets really exciting. We are layering a powerful AI engine over our proprietary database.This technology acts like an expert analyst working for you 24/7.

It can identify off market opportunities, analyze investment potential, and even answer your questions in plain English through an interactive chat.

It turns a sea of data into clear, actionable intelligence. More on that soon!

Conclusion

In short, Industrial IQ is the tool for operators who want to move beyond outdated methods. It combines a comprehensive property database with live market data and smart AI to give you a true competitive advantage. This means less time hunting for information and more time closing deals.

This is more than just software for us; it’s a mission to empower the small bay community. We are building this in public, and we want you to be a part of the journey. The feedback we get from our waitlist is already shaping the platform.

We wanted to see what would happen when we put 30 vetted investors in a $20 million oceanfront home—not for luxury, but to change their mindset.

The goal was to create an environment where collaboration wasn't just encouraged, but inevitable. We focused on delivering overwhelming value and getting the right people in the room.

So, how did it go? The results were even better than we imagined.

The Venue Catalyst

Instead of a generic conference room, the bootcamp unfolded in a modern masterpiece with breathtaking ocean views. This setting was intentionally chosen to be inspirational. It immediately broke down the corporate feel and created an atmosphere of energy and possibility.

The environment worked. It sparked a level of open, no-friction collaboration from the moment people walked in. The house itself, a stunning transformation of a 1950s gem, set the tone for the entire weekend: see the potential, then execute the vision.

Photo Gallery

Here are some of my favorite pictures from the bootcamp.

Organic Collaboration

We came in with a packed agenda, but the real magic happened in the moments that weren't planned. The scheduled sessions on acquisitions, development, and leasing sparked so much conversation that the agenda naturally evolved.

We found that collaboration was constantly overflowing into breaks, lunches, and networking hours. The energy in the room was driven by the group itself, with people sharing deals, solving problems, and asking insightful questions. It proved that when you bring the right operators together, the value created is far greater than any single presentation.

Tangible Results

The true measure of any event is what happens after everyone goes home. We wanted our attendees to leave with more than just notes; we wanted them to leave with the clarity and tools to take immediate action.

The feedback we received confirmed that we hit the mark. The testimonials started pouring in before the weekend was even over.

"This was way beyond what I expected, incredible content and an excellent venue. Now it's time to take action and start making offers! Appreciate you all again." - Tim C., CA Investor

This wasn't just about feeling good. Attendees started putting the playbook into action right away.

"I just got off the phone with a couple brokers using the 'bonus commission' tactic telling them we could make them a sweetheart deal if they can bring us some off market product. They were very excited about that. I love this little nugget we got from you guys." - Bill S., DCICOmercial.com

Moments like these are why we do this. We saw the "lightbulbs go off" as people realized that their ambitious goals were not only possible but completely doable.

Conclusion

Our experiment was a success. The combination of an inspiring venue, a curated group of high-caliber operators, and a playbook of actionable strategies created a truly transformative experience. We proved that the right environment doesn't just host an event—it fuels it.

This bootcamp is more than a business for us; it’s a passion project. Our mission is to build a community where operators can be radically transparent, learn from each other's real-world experiences, and have fun while building their portfolios. The energy and results from Newport Beach have us more excited than ever to continue.

The bootcamp is part of our mission to empower small bay operators. Learn more about Industrial IQ, the platform we are building.

We are already planning our next event for the spring. To be the first to know when applications are made, visit our website by clicking here.

The results spoke for themselves—which is why we knew we had to do it again.

Chicago Bootcamp

But for our second bootcamp, we're not just re-running a successful formula. We're elevating it. We asked ourselves: How can we create an even more powerful environment for collaboration and breakthrough ideas?

The answer was to build an experience where the venue itself becomes a case study.

Event Details

When: Sept 13–14, 2025
Where: 642 Via Lido Nord, Newport Beach, CA
Capacity: Limited to 30 vetted investors

Schedule Overview

Day 1: Mastering Acquisitions

• 8:00 – 8:30 AM - Breakfast
• 8:30 – 9:00 AM - Welcome & Introductions (Saul Zenkevicius)
• 9:00 – 9:30 AM - The Small Bay Advantage (Shea Lewis)
• 9:30 – 10:00 AM - Seller Financing Strategies (Alan Schnur)
• 10:00 – 10:30 AM - Fireside Chat w/$3B+ in Sales Broker Josh Altman (Alan Schnur)
• 10:30 – 11:00 AM - Asset Characteristics & What Really Matters (Shea Lewis)
• 11:00 – 12:00 AM - Market Selection & Buy Box Development (Saul Zenkevicius)
• 12:00 – 1:00 PM - Working Lunch + Land Acquisition (Alan Schnur)
• 1:00 – 1:30 PM - Proforma Mastery (Shea Lewis)
• 1:30 – 2:30 PM - Sourcing Off-Market Deals + Industrial IQ Software Demo (SheaLewis)
• 2:30 – 3:30 PM - Making Brokers Your Secret Weapon (Saul Zenkevicius)
• 3:30 – 4:30 PM - Due Diligence & Pre-Leasing (Saul Zenkevicius)
• 4:30 – 5:00 PM - Negotiations (Alan Schnur)
• 5:00 – 7:00 PM - Cocktails & Networking

Day 2: Development, Leasing, and Operations

• 8:00–8:45 AM - Breakfast

• 8:45–9:45 AM - Bus Transfer to Property Tour
• 9:45–10:15 AM - Live Property Walkthrough (Alan Schnur)
• 10:15–11:30 AM - Return Transfer
• 11:30–12:00 PM - Case Study: Beaver Creek Deal (Saul Zenkevicius)
• 12:00–12:30 PM - Working Lunch + Case Study: Fort Myers Deal (Shea Lewis)
• 12:30–1:30 PM - Ground up Development (Alan Schnur)
• 1:30–2:30 PM - Leasing Marketing Funnels (Saul Zenkevicius)
• 2:30–3:00 PM - Ground up Financing (Alan Schnur)
• 3:00–3:30 PM - Lease Structures: NNN vs Modified Gross (Shea Lewis)
• 3:30–4:30 PM - CapEx, OpEx & Reconciliation (Saul Zenkevicius)
• 4:30–5:00 PM - Goal Setting & Wrap-Up (Saul Zenkevicius)

Click here to apply.

The New Stage

Instead of a sterile hotel conference room, we're hosting our 2nd Industrial IQ Bootcamp inside a $20M oceanfront masterpiece in Newport Beach, CA. This isn't about luxury—it's about mindset.

The venue is the latest project from our featured speaker, Alan Schnur. This stunning transformation took a 1950s architectural gem and reimagined it as a modern waterfront estate. It's a living example of the very principles we teach: having the vision to see a deal's potential and the strategic execution to bring it to life.

We believe that an environment embodying excellence is the perfect catalyst for a weekend dedicated to building it.

Access and Action

A great venue means nothing without the right people and actionable content. We've kept the group intentionally small—capped at 30 vetted investors—to ensure this is a roll-up-your-sleeves workshop, not a passive seminar.

You'll have direct access to candid conversations with active operators, including:

• Saul Zenkevicius (Me!): Founder of Z Equity Group, $100M+ Portfolio Operator
• Shea Lewis: Managing Partner at Z Equity and Small Bay Industrial Specialist
• Alan Schnur: Visionary Investor, Author, and responsible for over $200M in transactions

But we're obsessed with closing the gap between learning and doing. Our curriculum is built on four tactical pillars: Acquisitions, Ground-Up Development, Leasing, and Operations.

To ensure you can execute on this playbook immediately, every participant receives complimentary 3-month access to our Industrial IQ Software. You won't just leave with ideas—you'll leave with the tools to implement them.

Me and Shea Lewis in Chicago

Conclusion

The core principles from our first bootcamp remain unchanged: radical transparency, a curated group of high-caliber operators, and a focus on collaborative problem-solving.

What's different is the level of immersion and the immediate implementation tools we provide. This is where breakthrough ideas meet breakthrough deals.

The property tour showcased the principles behind small bay industrial investing. Read why it is my favorite asset class.

This is an exclusive event for serious operators ready to take their business to the next level. Seats are limited and we vet every applicant to ensure the right mix of experience and ambition.

Applications are now open. Join us by applying here.

It usually means one of two things: either you unplug and your business momentum stalls, or you stay plugged in and never actually rest.

I just got back from a three-week trip to Italy with my family, and I’m here to tell you there’s a third way. This wasn’t a vacation. This was a life integration experiment.

Family picture

We didn't just see the sights; we lived, worked, and explored in a way that proves you don’t have to hit the brakes on your life to build your business.

Here’s the truth: the goal isn't work-life balance. It's work-life integration.

Here’s how my trip went.

Boundless Life

We didn't just book an Airbnb or a hotel and hope for the best. We were strategic. We found a program called Boundless.life designed specifically for families like mine.

Boundless.life builds special communities for families in beautiful places around the world. They provide ready-to-live-in homes, shared work spaces, and hands-on learning programs for kids. Their goal is to help families with similar interests connect with each other so they can live, work, and travel together while experiencing the local culture of each place they visit.

We stayed in Pistoia, a little town in Tuscany that became our home base.

Here’s how this program they eliminate the friction:

• A co-working space for me to stay productive.
• A pop-up school for my son to learn and connect.
• A pre-arranged home, taking all the logistical headaches off the table.

Bottom line: this structure gave us the freedom to immerse ourselves in the culture and connect with a community of other families doing the exact same thing. No stress, all upside.

Gallery

Here are more photos I took on this trip.

Core Memories

So, what does that kind of freedom get you? Moments that hit different.

It’s not about checking boxes off a tourist list; it's about core memories.

These are my top three most memorable moments from the trip:

1. Venice Gondola. Yeah, it’s a cliché, but seeing the city from the water with my dad, who was visiting from Lithuania for the first time, was next-level. Some things are famous for a reason. That’s a core memory.

1. Pistoia at Night. This is where you find the authentic energy. We had long, two-hour family dinners every night, surrounded by locals, not tourists. The food was insane, but the real takeaway was feeling the pulse of a real Italian town after dark.

1. The Swiss Alps. We took a side trip to Switzerland. Standing there and seeing the sheer scale and beauty of the Alps for the first time… it just resets your perspective on what’s possible.

Gondola with the family

Try Italy

My biggest piece of advice for anyone thinking of doing something similar? Go small.

Forget the chaotic tourist centers of Rome or Milan.

The magic is in the smaller towns where you can actually connect with the community and feel the rhythm of daily life.

That's where you'll find the best food, the most genuine people, and the experiences that actually stick with you.

Ditch the checklist and find the connection.

My favorite picture

Conclusion

This trip was never about escaping work. It was about proving that an epic life and a thriving business can—and should—coexist.

The supportive, growth-oriented community we found in Italy is the exact kind of environment I work to build for every entrepreneur I coach.

Here’s the crazy part: we had no Facebook ads, no complex sales funnels, and no countdown timers creating fake urgency. We sold it out with a simple newsletter mention and an application form.

But that’s not what shocked me. It was the feedback.

On Sunday evening, we sent out a survey, and the results were unanimous: every single participant rated the event a 10/10.

Honestly, I didn’t expect that. It forced me to step back and analyze why this thing we created—something that went against every conventional sales playbook—worked so incredibly well.

Here’s the full story.

The Thesis

Before we even started, my partner Shea and I had a core thesis. Most industry events feel transactional. They pack a room, pitch hard, and push a big backend offer. It’s a model built on scarcity.

We wanted to build ours on two different principles:

1. Overwhelming Value is the Goal: We knew we had to give away the entire playbook—every tool, spreadsheet, and contract we've honed over the last five years. But more than that, we had to give them the mindset. Tools are useless without the right operating system. We wanted to ensure every person left ready to operate on a completely different level.
2. The Mastermind is the Magic: The most valuable insights don't come from a speaker on a stage; they come from the collective intelligence in the room. Our goal was to facilitate an environment where 20 smart, ambitious people could solve real problems together.

How We Executed

That simple thesis guided every decision.

First, we were intentional about the environment. Instead of a soulless hotel ballroom, we hosted it in my friend Jittender's personal boardroom. The capacity was capped at 20 people. This wasn't a numbers game; it was a quality game.

Second, the curation was manual. There was no "click to buy" button. We had an application, and we personally vetted every single person. Our main criteria wasn't their net worth or portfolio size. It was simply: "Are they a good person? Would we enjoy spending two days in a room with them?" We trusted that good people attract good people.

Third, we were radically transparent.

On day one, I stood up and told the group our two "selfish" motives:

1) We're launching a software and they are our ideal beta testers

2) We're building a portfolio of properties and would love for them to partner with us. No hidden agenda. No surprise upsell. Just honesty.

The curriculum covered everything we have learned about small bay industrial. For a taste, read why it is my favorite asset class.

The Pre-Event Coaching Call

A week before the event, we did something that turned out to be a game-changer. We held a group coaching call with my performance coach, Phil Towle.

He asked everyone a single, powerful question: "Why are you really here?"

Hearing everyone—from the hungry 20-somethings to the seasoned pros—share their core motivations created a foundation of trust and purpose before anyone even stepped foot in the room. It shifted the event from a transaction to a co-creation.

The Magic Moment

On Saturday evening, Shea and I stepped out for a debrief. The energy inside was electric. People who were strangers a day ago were deep in conversation, scheduling dinners, and discussing deals.

I turned to him and said, "Dude, I think we killed it."

The real magic wasn’t happening when we were teaching. It was happening in the spaces between: during the live property tour, on the bus ride, and in the late-night conversations at the hotel bar. The collaboration was happening organically, without any facilitation from us. That’s when we knew our thesis was right.

Here’s what a few of them said:

"The openness and genuine desire to share and uplift others." "Because I do not currently own a small bay, I was super interested in hearing the pitfalls and the buy criteria... you ultimately saved me from making a huge mistake. That is priceless!" "The class size was perfect to be able to ask questions in real time... Shea and Saul were so patient and kind to answer any and all questions to make the learning experience fulfilling for everyone."

Conclusion

So, what’s next? In the survey, we asked if they’d be interested in a follow-up call to brainstorm how we all stay connected.

Every single person said yes. We’re now doing a 2-hour Zoom session with no predetermined agenda—just 20 smart people figuring it out together.

We accidentally created an anti-playbook that works:

• Choose a small room over maximum capacity.
• Use applications instead of buy buttons.
• Embrace transparency over artificial scarcity.
• Prioritize collaboration over one-way teaching.
• Aim for co-creation instead of a predetermined outcome.

The biggest lesson for me is this: when you optimize for genuine value and authentic relationships, the business results take care of themselves. You create raving fans, the connections compound, and the game starts coming to you instead of you chasing it.

Forget the gurus. Focus on transformation. The magic will handle the rest.

Read more of my articles on my blog by clicking here.

Money and Investing

Here are some tips to help you deal with money and investing:

1️⃣ Stick with the S&P for 5 years.

Patience almost always wins. Chasing quick returns in the stock market often leads to emotional decisions and unnecessary losses. This timeframe helps you ride out market volatility and benefit from long-term growth trends.

2️⃣ Buy and hold.

Time in the market consistently beats trying to time the market. Constantly buying and selling often leads to missed opportunities and higher transaction costs.

3️⃣ Cost average, always.

Commit to buying the same stocks on a regular schedule, like monthly, without worrying too much about the daily price fluctuations. This strategy, known as dollar-cost averaging, reduces risk by averaging out your purchase price over time.

4️⃣ Dividends and real estate depreciation create wealth.

This powerful combination is a cornerstone for many investors. It builds your cash flow while simultaneously offsetting your tax burden. Dividends provide regular income, while depreciation is a non-cash expense that can significantly lower your taxable income from real estate.

5️⃣ Prioritize cash flow over net worth.

Cash flow is what funds your lifestyle and pays the bills. A high net worth might look good on paper, but it doesn't provide liquidity.

6️⃣ Avoid problem properties.

If a property has a history of issues that previous owners could not fix, do not assume you will be the one to solve them. Properties with foundational, legal, or recurring tenant issues can drain your time and money with little hope for a turnaround.

7️⃣ Sell the problem properties you have.

Some properties are easy to manage and generate reliable income, while others are a constant headache. Cut your losses and move on. Focus your energy on assets that perform well instead of getting bogged down by ones that consistently cause problems.

8️⃣ Building cash flow takes time.

Stick with your strategy long enough to see it bear fruit. Many people quit right before their efforts are about to pay off. Whether in real estate or business, generating substantial, reliable income streams is a marathon, not a sprint.

9️⃣ Starting a fund takes years.

Be prepared for a long journey. Raising capital, deploying it, and seeing significant returns is typically a 5 to 10-year process.

🔟 Flipping is fun, but risky.

To build long-term security, combine the occasional flip with a portfolio of properties that provide steady, predictable cash flow. Market shifts can leave you with an unsold property, so balancing flips with stable rental income provides a crucial safety net.

For a practical example of these principles in action, see how we applied them in our 165K sq ft industrial redevelopment.

Life and Relationships

Here are some tips to deal with life and relationships:

1️⃣ Spend time with your kids now.

They need your presence and guidance most when they are young. You can't get this time back. The moments you have to shape their lives and build strong bonds are most impactful when they are young.

2️⃣ Put your phone away at home.

Be present with your loved ones. This simple act of undivided attention makes a massive difference in the quality of your relationships.

3️⃣ Make date nights non-negotiable.

Schedule them on the calendar and protect that time. Keeping the connection and romance alive requires intentional effort.

4️⃣ Start the day with love.

The first words you say to your partner in the morning can set the tone for the entire day.

5️⃣ Do not stop asking your teens to hang out.

They may say no frequently, but the consistent invitation reinforces that you care and want to be part of their lives. Eventually, they will come around.

6️⃣ Understand that winning is about gratitude.

Success is not just a number in a bank account. It is about appreciating how far you have come and what you have already accomplished.

7️⃣ Read "Parenting with Love and Logic."

This book is a game-changer for anyone wanting to raise responsible and resilient kids. It offers practical strategies for raising self-reliant children by allowing them to face natural consequences.

Health and Longevity

Here are some tips to help you with your health and longevity:

1️⃣ Focus on your Heart Rate Variability (HRV).

Just 30 minutes of Zone 2 training daily can significantly improve your longevity markers. HRV is a key indicator of your body's resilience and recovery. Zone 2 cardio, or low-intensity steady-state training, is highly effective at improving it.

2️⃣ Sleep is essential.

A consistent lack of quality sleep puts you at a much higher risk for memory loss and other cognitive issues down the road.

3️⃣ Cold plunge, then workout, then sauna.

The order of this routine matters if you want to get the best results for performance and recovery. Starting with a cold plunge can boost adrenaline for your workout, while finishing with a sauna aids in muscle recovery and relaxation.

A Final Thought on Simplification

Here's how you can simplify your life:

1️⃣ Laser focus beats overwork.

Success is about choosing the right dream to pursue, not just working harder on everything. Achieving a significant goal comes from concentrating your energy on the right objective, not from being busy for the sake of it.

2️⃣ One dollar in cash flow today is better than two dollars in future equity.

Real-time, predictable cash flow is what keeps your operation running and gives you options. Guaranteed income now is often more valuable than potential gains in the future, as it provides immediate stability.

3️⃣ Let your tenants pay off your loans.

Remember that you are in the principal pay-down business. The goal is to hold assets as your tenants' rent payments build your equity for you. Do not be in a hurry to sell.

After all, the real question is: What are you doing that you don’t need to be doing?

The lesson about cash flow over net worth is one I live by. I dive deeper into this in my proforma lessons.

Full List

Here’s the full list of all of the wisdom nuggets:

1. Stick with the S&P for 5 years.
2. Buy and hold.
3. Cost average, always.
4. Dividends + real estate depreciation = wealth.
5. Cash flow over net worth.
6. Avoid problem properties.
7. Sell the problem properties.
8. Building cash flow takes time.
9. Starting a fund takes years.
10. Flipping is fun, but risky.
11. Spend time with your kids now.
12. Put your phone away at home.
13. Make date nights non-negotiable.
14. Start with love.
15. Don’t stop asking your teens to hang out.
16. Winning is about gratitude.
17. Read "Parenting with Love and Logic."
18. Focus on HRV.
19. Sleep is essential.
20. Cold plunge → workout → sauna.

Building cash flow through real estate has been my focus. I share more about this journey in my story of transitioning to commercial real estate.

Conclusion

These wisdom nuggets reveal a consistent philosophy: prioritize what generates reliable, long-term value over what looks impressive on paper.

The real wisdom: Stop chasing complexity and start doubling down on the fundamentals that actually work. As the final question suggests, most of what we think we "need" to be doing is just noise distracting us from the simple strategies that build lasting success.

Follow me on LinkedIn or subscribe to my newsletter for more commercial real estate insights.

As someone deeply embedded in the real estate world, I want to share what I'm seeing on the ground—the challenges, the emerging trends, and what I believe businesses and investors should be considering in this new landscape.

The Current State

The office market today presents a complex picture that varies dramatically across metropolitan areas. Most immediate metro and downtown areas remain devastated with very high vacancy rates, and frankly, it's been painful to watch.

However, I'm seeing some encouraging signs in select markets. New York, Miami, and Tampa are already showing improvement—they're rapidly increasing. Maybe there's a signal that soon we're going to hit a tipping point when the national market starts recovering.

But I want to be realistic here. The challenges are still significant. Delinquency rates continue to increase nationally, with commercial mortgage-backed securities (CMBS) loans hovering around 20%, which is a very significant number.

Despite these glimmers of hope in select markets, I remain cautious about a full recovery to pre-pandemic levels.

The Pandemic Effect

The root of our current situation traces back to the pandemic-driven shift to remote work.

During the pandemic, everyone started working from home, and then everyone came back when companies realized they couldn't maintain the same level of business productivity.

This realization has led to what I'm observing as a definitive trend toward companies implementing back-to-office policies.

There's definitely a trend of increasing back-to-office policies for companies—they're either demanding work from the office, or at least it has to be hybrid. The federal government has been particularly clear about this, announcing that federal employees must work from the office.

The Refinancing Crisis

Rising interest rates have created what I can only describe as a perfect storm for office building owners.

Here's what I'm seeing: office loans are typically five-year loans, and since interest rates went up and occupancy decreased, buildings cannot service the loans anymore.

When refinancing time arrives, many properties face a harsh reality that I encounter regularly in my work. The rent coming due from these buildings is not enough to pay the payments for the banks. This forces lenders to require significant loan paydowns for refinancing or extensions.

Those unable to meet these requirements face foreclosure, and I'm seeing this contribute to an increasing number of distressed properties in the market.

External Pressures

Recent tariffs and global uncertainties have added another layer of complexity that I factor into my market analysis.

These generally have a negative effect on office space demand, as companies are pausing their expansion plans because they don't know how things are going to shake out.

Interestingly, while tariffs negatively impact office space demand, they have a positive effect on warehouses because there's reassurance for companies that need industrial space for reshoring operations.

While office faces challenges, industrial continues to thrive. I explain why in my piece on small bay industrial investing.

New Lease Reality

The hybrid work model has fundamentally altered how companies approach office space, and I see this in every deal I work on. Companies are dramatically reducing their permanent office footprints while incorporating flexible arrangements.

The math is striking: a company that previously held a 100,000 square foot lease might now downsize to 30,000 square feet of permanent space and maybe take another 30,000 square feet of co-working space for people who come in for hybrid work.

Golden Opportunities

For companies re-entering the office space market, I'm telling my clients that current conditions present unprecedented opportunities. Here's my advice:

Upgrade to Class A Space: If you were in Class B or Class C office space and you need to go back with the workforce, lock in your Class A workspace. You'll be able to negotiate Class A leases for Class B or Class C prices.

Negotiate Aggressively for Tenant Improvements: You can ask for way more in tenant improvements from landlords—maybe six to twelve months of rent abatements and significant TI packages for specialized build-outs.

Leverage Market Selection: There's definitely a big selection of offices compared to what used to be before. The power is truly in the tenant's hands right now.

Investment Strategy Recommendations

For investors with substantial capital, I'm seeing unique acquisition opportunities that I haven't witnessed in my career.

If you were hesitant to buy an office before, if you want to buy an office as an owner-occupant user instead of leasing it, you can pick up properties right now at a real fraction of the cost.

All major metropolitan cities—Chicago, LA, DC, and San Francisco—present potential opportunities for buyers with long-term investment horizons.

However, I strongly advise against speculation on vacant properties. Instead, buy buildings that are still occupied and buy buildings at the price that current income can support.

My strategy is straightforward: if a building has 20 stories and 10 stories are occupied, you buy this building as 10 stories with existing rents. Those existing rents can support the building. You buy them as if the other 10 stories don't exist. If they, at some point, get occupied, great—that's upside.

Strategic Options

Building owners facing current market challenges have several paths forward:

Mixed-Use Conversion: Keep an office and do slices where there are some old-style offices, then maybe a couple of floors of co-working space, and maybe on the bottom some retail like a gym.

Residential Conversion: See based on demand and construction costs if it can be retrofitted to housing. Do complete redevelopment and see if it's feasible based on how much rent they can demand in that market and how much it's going to cost.

Price Leadership Strategy: Either slash prices to the lowest possible level and become a price leader—if you can still cover taxes and debt—or, if that’s not feasible, hand the keys back to the bank.

The Emerging Trend

Converting towers to residential micro-units.

I'm talking about many, many small apartments with shared common areas, including possibly even kitchens. It's almost like student housing type of dorms, but not for students.

This model addresses what's cost-prohibitive right now with office-to-condo conversion.

Typically, you have a windows problem—you cannot really set up typical condos with windows in the bedrooms. And then there's reconfiguring and building so many bathrooms and kitchens.

But if the dorms-type style would have demand, you don't have to build many kitchens; you don't have to rebuild that heavy plumbing. You can salvage a lot of existing construction.

Timeline for Recovery

While predicting exact timing remains challenging, I believe we may be approaching a critical juncture. It feels like we're kind of close. How close? Within three to twelve months close. Maybe there's going to be an inflection point when that asset class starts going in the positive direction.

However, complete market stabilization will take significantly longer. To absorb entire vacancy, it's really probably a five-year project for the country.

What I Tell Landlords

The best target right now from a tenant perspective is the Class A building that was built pre-pandemic levels, and you can lease it right now at Class C prices.

We're talking about new buildings, modern, with a lot of amenities on the first floor—gyms, cafeterias, bike racks, maybe a spa, smoothie bar, yoga rooms—and convenient access to coffee shops, movie theatres, restaurants, schools, etc.

The Bottom Line

When people ask me about the biggest hurdle facing owners today, my response is direct: there's not enough demand for existing office space. That's the number one reason for everything we're seeing.

However, for those willing to adapt, negotiate aggressively, and think creatively about space utilization, I'm seeing significant opportunities emerge.

The office real estate market stands at a critical inflection point. While the recovery timeline remains uncertain and complete stabilization may take years, I'm observing early indicators that suggest positive momentum in select markets.

Success in this environment requires understanding the new fundamentals: smaller footprints, hybrid work arrangements, premium amenities at competitive prices, and patient capital focused on existing income rather than speculative vacancy.

From where I sit, I believe we're closer to that inflection point than many realize. The question isn't whether change is coming—it's whether you'll be positioned to capitalize on it when it arrives.

For those exploring industrial alternatives, our Industrial IQ platform helps operators find the right opportunities.

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This isn't merely a 'get rich quick' tale; it's a story about getting rich intelligently.

The journey of Shoaib "Sho" Kabani demonstrates how recognizing overlooked opportunities and thinking strategically can lead to substantial wealth creation in unexpected places.

From Consulting to E-Commerce

Sho began his career in management consulting, traveling extensively. Like many ambitious professionals, he eventually transitioned into e-commerce, drawn by the promise of digital entrepreneurship.

However, reality quickly set in.

"E-commerce is a cutthroat industry. You're fighting for attention. Marketing costs keep climbing," Sho realized.

This revelation prompted a crucial pivot. Rather than continuing to battle in an increasingly competitive space, Sho shifted focus towards long-term wealth creation through real estate investing.

Path to Real Estate

Sho started investing as a limited partner in hotels and self-storage facilities.

These traditional real estate investments provided steady returns, but it was during his involvement with self-storage that he noticed something intriguing—a trend that would ultimately change his investment strategy entirely.

Discovery That Changed Everything

Two storage facilities in Sho's portfolio offered larger units specifically designed for business tenants.

These weren't your typical storage customers looking to store household items. Plumbers, electricians, and tradespeople needed small spaces with roll-up doors and bathrooms—functional workspaces that could serve as mini headquarters for their operations.

The results were remarkable: these business tenants rented more quickly and at significantly higher prices than standard storage customers.

In one striking example, a unit increased its rent from $5 gross to $12 NNN (Net, Net, Net—where the tenant pays property taxes, insurance, and maintenance costs in addition to base rent).

Seizing the Opportunity

This observation led Sho to discover his first small-bay industrial opportunity. The property consisted of 12 units totaling around 13,000 square feet.

However, it came with significant challenges that scared off traditional investors and lenders:

• All leases were secured through handshake agreements with no established systems.
• Banks were unwilling to finance the property due to its informal structure.
• The property was clearly mismanaged despite its potential.

While others saw problems, Sho recognized the potential. He secured the property for $1.15 million with seller financing, bypassing the traditional banking hurdles that had deterred other investors.

Transformation and Results

Sho's strategy proved highly effective. He systematically improved the property's operations and positioning:

• Raised rents to $12-$12.50-$13 NNN, aligning them with true market rates.
• Leased 9 out of the 12 units in under 9 months.
• Anticipates an exit valuation between $2.2 million and $2.3 million upon full stabilization.

This represents potentially doubling his investment in less than two years—a remarkable return by any standard.

Key Lessons from Sho

Sho's experience revealed several crucial insights about small-bay industrial investing:

✅ Small-bay tenants are loyal. They remain because their spaces are crucial to their operations. Unlike residential tenants who might move for convenience, these business owners depend on their workspace for their livelihood.

✅ Flex space is severely underdeveloped. There's considerable demand for this type of real estate, yet supply hasn't kept pace with the needs of small businesses and tradespeople.

✅ Mentorship accelerates success. Sho's progress was expedited by learning from the right mentors who had already navigated similar challenges.

Replicable Formula for Success

The formula for this success is replicable for other investors willing to look beyond conventional opportunities:

1. Seek out mismanaged small-bay industrial properties in tight rental markets.
2. Structure debt and equity to enhance cash flow.
3. Align rents with market rates and transition them to NNN.

If you want to learn more about finding these overlooked opportunities, I wrote a detailed guide on sourcing off-market deals.

Conclusion

Sho Kabani's journey illustrates a fundamental principle of successful investing: significant opportunities often lie in overlooked properties essential for solid businesses, not in trendy assets everyone pursues.

While others chase the latest investment fads, smart investors like Sho find value in the unsexy but essential spaces that keep our economy running.

His success with small-bay industrial properties demonstrates that wealth creation often comes from recognizing trends before they become obvious to the masses.

By focusing on properties that serve essential business needs—spaces for plumbers, electricians, and other tradespeople—Sho tapped into a market with built-in demand and tenant loyalty.

The question for other investors is clear: what overlooked asset class do you believe holds hidden potential?

Sometimes the best opportunities are hiding in plain sight, waiting for someone with the vision to see their true value.

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Each summit tells a different story; each trail offers its own challenges and rewards.

Here's a glimpse into some unforgettable mountain adventures.

Above the Clouds

Nothing beats the pure joy of reaching a snow-covered peak. The crisp mountain air, the endless blue sky, and that feeling of accomplishment that makes you want to jump for joy.

Jump shot on a snowy mountain

Coastal Heights

There's something special about hiking high above the coastline. These elevated coastal trails offer a unique perspective, combining the challenge of mountain hiking with spectacular seaside views.

Can't get a better view than this

Mount Elbert, Colorado - 14,439 ft

Colorado's second-highest peak and the highest summit of the Rocky Mountains, Mount Elbert stands as a giant among the famous "fourteeners," offering hikers a challenging but achievable climb through alpine meadows and rocky terrain.

The standard route gains over 4,000 feet of elevation, rewarding summit visitors with 360-degree views of the Rockies.

Nothing feels better than climbing up a mountain with your loved ones

Mount Kilimanjaro, Tanzania - 19,341 ft

Africa's highest peak and one of the Seven Summits, Kilimanjaro is unique as the world's tallest free-standing mountain, rising from tropical rainforest to arctic conditions at its summit.

The journey through five distinct climate zones makes this more than just a climb—it's a voyage through diverse ecosystems in a single ascent.

Adventures fuel my creativity for real estate deals. See how that translates in my favorite asset class.

An experience of a lifetime, one of my favorite summits

Conclusion

I'm looking forward to more hikes, as every summit reached is just the beginning of the next adventure. The mountains keep calling, and there are always new peaks to explore, new views to discover, and new limits to push.

See you on the trails!

Here's a full rundown of what happened.

The Acquisition

In July 2021, we picked up two mismanaged storage sites in Tennessee.

One had no systems whatsoever. The other had a manager pocketing cash.

This was a classic value-add opportunity that we couldn't pass up.

Savannah Property

The Savannah location required quick cleanup and basic upgrades.

We sold it in 6 months for $380K.

While it wasn't exactly a home run, it was still a win for our portfolio.

Clarksville Property

For the Clarksville location, we stabilized operations to 92% occupancy and hit $194K NOI.

The property was appraised at $3.13M, allowing us to refinance at $1.4M—effectively pulling out all our equity.

Why We Decided to Sell

So why sell when things were going so well?

There were several factors that influenced our decision:

1. Self-storage demand is cooling across the market.
2. The space is now commoditized with increased competition.
3. Our investors specifically want 2–3 year exits.
4. The offer was 14x annual cash flow—too good to ignore.
5. We found a buyer willing to assume our loan, helping us avoid a $130K prepay penalty.

We closed at a 9% cap for $2.125M in August 2024.

The Real Lessons

Through this experience, we learned some valuable lessons:

1. Appraisal values don't always equal what the market will actually pay
2. Hot sectors cool down—and they cool down fast
3. Timing matters more than spreadsheets when it comes to real returns

Conclusion

We're moving into small bay industrial next as our strategic pivot.

The self-storage chapter has been profitable, but it's time to adapt to changing market conditions.

Where are you headed with your investment strategy?

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I was done with flips, tired of patchy rehabs, and ready to play bigger.

But I kept one strategy in my back pocket—a quiet killer: urban infill new construction in Chicago's transitional neighborhoods.

We target teardown or vacant lots in places like Bronzeville and Canaryville—neighborhoods with real growth, not hype.

The formula is simple: buy cheap, build clean, sell strong.

I sold this

Why Commercial Works

The contrast with traditional fix-and-flip is stark. Where fix-and-flip brings chaos, this approach offers calm.

Commercial real estate uses the same blueprint every time, eliminating surprises. City lots come with ready utilities, so there's no civil engineering circus to deal with. The quality of contractors is higher, meaning no more chasing unreliable workers like "Cousin Johnny."

Perhaps best of all, local banks understand and appreciate this model. Financing becomes a breeze rather than a burden.

Numbers Behind Success

Let's look at our latest project, a Bronzeville 3-flat:

• Lot: $125K
• Build: $525K
• Sale: $900K–$950K
• Gross profit: $200K–$250K (pre-carry)

You won't find a dramatic flip story here. There's no hero rehab narrative to tell.

What you get instead is clean math, sharp execution, and peace of mind—elements that matter far more than an entertaining before-and-after story.

The Trade-offs

Of course, there are downsides. The process is slow, typically taking 12+ months per deal. It also doesn't scale easily in the way other real estate strategies might.

But these limitations are precisely why the strategy continues to work. While others chase quick, flashy deals, we focus on steady returns.

Conclusion

In real estate, predictable beats popular. Every time.

What's your quietest, most reliable play?

Consider where you might find similar opportunities in your market—the ones others overlook because they lack flash but deliver consistent returns.

Sometimes the most powerful strategies are the ones nobody's talking about.

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Located at 5805 S. Archer Avenue near Midway Airport, this high-traffic spot (20,000+ cars daily) sat in a strong demographic area with 80,000+ people nearby and an average income of $83K.

At $52 per square foot, the numbers looked promising.

Finding Opportunity

Despite targeting industrial buildings, this retail-automotive site caught our attention.

The owner, Bob, had run A-OK Automotive for over 30 years and was ready to retire.

He needed a confidential deal with a fast close and short leaseback.

We structured a 90-day close with a 6-month lease, knowing we'd have an empty building afterward.

After studying comparable properties, I confirmed auto use still had strong demand in the area.

While quick-service restaurant brokers dismissed the lot as too small for major chains, I trusted my instincts.

We moved forward using hard money: 20% down, 11% interest, 2 points, with a 12-month term.

Win-Win Solution

The turning point came when Ricardo, Bob's general manager, expressed interest in leasing the property.

The challenge? He lacked capital for equipment and startup costs.

We solved this by:

• Purchasing Bob's equipment for $25K
• Financing it to Ricardo at $2K/month
• Securing a 10-year lease at $7/sqft NNN with 3% annual increases

Financial Restructuring

During the 6-month lease finalization period, we invested approximately $80K in critical improvements, including replacing half the roof and tuckpointing the building.

Once the lease had seasoned, we refinanced through Heartland Bank, pulling out 90% of our basis and dramatically improving our cash position.

The Profitable Exit

A year later, we listed the property for $1.4M.

While we received offers around $1.2M, we initially held off.

Ultimately, Ricardo himself purchased the property for $1.2M, using SBA financing through Heartland Bank.

Thanks to our contract structure, we avoided broker fees on the sale.

The Bottom Line

• Total timeframe: 2.5 years
• Net profit: $338,000
• Key strategy: Patience, creative structuring, and win-win terms

Finding deals like this requires consistent outreach. I break down the process in my guide to off-market deal sourcing.

Conclusion

Real estate success comes from solving problems at the intersection of people and numbers.

Sometimes you gain equity, sometimes experience—but the best deals deliver both.

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If this were an office building, it would've been a so-so deal.

If it were small-bay industrial, we'd be printing money. But this wasn't either. So we got to work.

We hired the best land-use attorney in town, an architect, and two local government consultants to lobby for us.

Together, we built a plan to get the zoning use modified.

Hearing

The first real test came in October last year when we went before the zoning board for a public hearing.

We didn't realize it at the time, but we had terrible luck with scheduling.

The room was tense, and even though our project had nothing to do with that one, we got caught in the crossfire.

After a long debate, we finally got approval to move forward to next review.

Strategy

The next 2 meetings were the planning commissions—regional and local.

This is where things got really tactical. At these meetings, we brought tenants with us - real businesses that needed space and supported our vision.

Finally, we got a recommendation to approve with some revisions.

Progress

By January this year, we were back in front of the zoning commission.

This was the same board that had given us the most heat back in October.

But this time, the conversation was more productive. We won approval with some guardrails—office/warehouse tenants over 10,000 sq. ft. would need conditional approval.

Victory

And we moved to the last step of approval process - Trustees Meeting.

The moment of truth was around a month ago. We showed up prepared. No public opposition (huge win). Letters of support from community leaders.

Then, after a long discussion, we reached the deal:

✅ Office-warehouse use approved, with conditional approval for tenants over 10K sq ft.

✅ Automotive use reinstated - but limited to customization shops only (no engine work, no outdoor activity)

✅ And a total of 29 newly approved uses.

Results

That was it. This legislation turned on the switch for property demand. We ended up on local news. Land value became 2-3x more valuable. And this property will be full in next 12-18 months.

Can't wait to get this done. I'll write another blog when I have updates.

This type of transformation is what draws me to small bay industrial. Read why it is my favorite asset class.

Subscribe to my newsletter here if you want to learn more or read more content of the same type.

From my own 2 decades of experience, here are 4 things I swear by when it comes to value-add deals.

Know Your Numbers

I use this formula to determine max offers:

Do this:

• After Repair Value (ARV): $380,000
• Renovation Costs: $70,000
• Other Costs (eg: 10% for holding, closing, commissions, etc.): $38,000
• Desired Profit: $50,000

The maths?

$380K - $70K - $38K - $50K = $217,000 max offer.

Set Your Vision

For me, my process starts with a rough 'chicken scratch' sketch.

I take a look over the floor plan and examples of finishes I want to include.

The architect then refines this into detailed drawing and renderings, before I share my vision with the GC.

Why?

Because if you can't see what you want, they can't see either, and you won't get what you want.

Control Your Budget

Find a GC who’s compensation is tied to profit, not total cost.

Sharing profits ensures they have invested interest and skin in the game, so losing hurts both people.

But winning benefits both too.

Your Broker is Your Partner

From my experience, you want someone who acts as a principal rather than an agent.

Their compensation should be directly tied to the project's overall success and profits.

I usually hire a broker for both sales and leasing. They receive a commission and a bonus tied to the improved part of NOI. (This ensure they’re invested, have skin in the game and also think like owners.)

For a deeper look at the numbers behind value-add, check out my proforma lessons.

Conclusion

The game doesn’t change. Only the size of the deal does no matter where you are in your real estate journey.

Interested in discovering more tips and strategies for value-add deals?

Each week, I share insights and real-life case studies in my weekly Value Builder newsletter. Click here to join.

It's a risky game.

Now, that's not to say you shouldn't go into the industry.

It's more about learning how to:

• Avoid or minimize risks.
• Learn from others & leverage networks.
• Bounce back from setbacks and challenges.

Because even if you do make a mistake…

You get the chance to learn a lesson from failures, which, in my opinion, are usually key to shaping your success.

What Not To Do

So instead of:

• Talking yourself out of investing.
• Following the crowd and TikTok trends.
• Blindly aiming in one direction and hoping for the best.

There are many things you can do ↴

Smart Strategies for Success

Here's a list of strategies for success.

1️⃣ Find Mentorship Opportunities

What better way to learn than from those who have been there and done it.

2️⃣ Don't Assume You Know It All

In the ever-changing landscape that is CRE, nobody will ever ‘know it all,’ because, truthfully, the learning never stops.

3️⃣ Strategize

The worst thing you can do is walk into a deal without a strategy.

Don't neglect the importance of this!

4️⃣ Stay Ahead Of The Curve

A great way to be more successful is to keep absorbing new knowledge and stay on top of the latest updates, trends, and information.

In fact, I actually share all this (and more!) each week in my Value Builder newsletter.

Conclusion

Sure, real estate contains its fair share of risks.

Honestly, it always will.

But that doesn't mean you shouldn't take the leap or shy away from it.

It just means that you should do the research, learn and keep adapting to be cautious of how you can minimize them.

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Some highways slowed down to a crawl—others just stopped completely.

My usual one-hour drive home turned into a two-hour test of patience.

Surprisingly, I didn’t see any accidents.

But the moment drivers felt their wheels slipping, they hesitated, and everything ground to a halt.

Chaos.

Meanwhile, I was cruising in my 4-wheel drive pickup, breezing past the mess.

That's when it hit me - this whole situation is a perfect example of a value-add proforma.

A value-add proforma always has four key levers:

✅ Income

✅ Expenses

✅ Improvements (CAPEX)

✅ Time

These four levers need to align, just like a car’s traction system.

If one is off, the whole thing skids out of control.

A proforma is more than a spreadsheet.

It’s a blueprint that connects all four elements.

This helps make sure a deal works in real life, not just on paper.

Now, let’s dive into each one.

Proforma spreadsheet

Why Most Proformas Don’t Work

I’ve tried quite a number software and templates for proforma modeling.

In the end, I found one key point: they only work if you buy the same, identical asset each time.

Value-add real estate is dynamic.

Every deal is unique.

Properties, locations, and market conditions vary.

So, you need to be flexible.

That’s why I believe:

❌ Forget hard-coded proformas.

✅ Learn basic Excel gymnastics, and you’ll be 10x better off.

And one more thing—you can’t outsource this 100%.

The final decision-maker on the numbers should be someone who has walked the property, shares the vision, and has real-world experience.

In other words, this is you. 🫵

Proformas aren’t just about plugging in data—it’s almost an art.

The 4 Levers That Make or Break a Value-Add Deal

Here's a breakdown of the 4 levers.

1. Income

When I first analyze a property, I start with the in-place income—the revenue it’s generating today.

📌 Step 1: I create a “Current” tab in my Excel sheet and input:

• Existing rent roll
• Other income sources (parking, laundry, etc.)
• Tenant reimbursements (taxes, insurance, CAMs, utilities)

📌 Step 2: I copy and paste this data into a new “Projected” tab.

Then, I adjust rents based on what they’ll be after renovations and stabilization.

This gives me two critical topline revenue numbers: where the property is today vs. where it will be after the value-add improvements.

2. Expenses

Next, I focus on operating expenses (OPEX) and separating reality from seller Data

📌 Step 1: In the “Current” tab, I enter all expense data provided by the seller.

📌 Step 2: I go line by line and compare these numbers to similar properties we own.

Common red flags?

🚩 Underreported maintenance costs

🚩 Missing property management fees

🚩 Unrealistically low insurance or tax numbers

I update the expense numbers to what I think it should be.

📌 Step 3: In the “Projected” tab, I estimate what the building’s expenses will be once stabilized and fully operational.

At this point, I now have two critical NOI numbers:

1. Current NOI (based on seller’s data, adjusted for reality)
2. Future NOI (post-renovation, fully stabilized)

3. CAPEX

Estimation of costs for a real estate project

CAPEX is where most investors—including myself—tend to underestimate.

This step is easy to understand, but hard to do.

First, list all improvements.

Then, estimate the cost for each one.

🚧 Pro tip: Your initial numbers will be estimates, but they should be as close as possible. Eventually, you’ll back them up with actual bids.

To make sure I’m in the right ballpark, I use a cost matrix—a tool I’ll share in a future newsletter.

4. Time

Time is the biggest proforma killer—and it sneaks up on you fast.

Many investors underestimate how long it will take to complete a value-add project.

Here’s the harsh reality:

🚀 If you plan for 2 years but finish in 1, you turn a good deal into a goldmine.

⏳ If you plan for 2 years but take 4, a good deal turns into a bust.

In my proforma, I create a separate tab for each project year. Here, I map out:

• Yearly NOI growth projections
• Timing for filling vacancies
• Dates for rent bumps

Dressing It Up

Once these four levers are dialed in, the deal either works—or it doesn’t.

If it works, now comes the fun part:

📌 Calculating IRR, equity multiples, cash flow projections

📌 Structuring the investor payout model

📌 Deciding leverage levels

At this stage, I’m not massaging the numbers to make a bad deal look good.

I’m just slicing up the pie in a way that’s fair and win-win for everyone involved in the project.

Conclusion

✅ Before getting lost in the weeds, focus on these four levers first:

• Income
• Expenses
• CAPEX
• Time

✅ Time is the most overlooked lever in value-add.

It can be just as powerful—if not more—than income.

✅ A deal cannot be dressed up if these four main components are off.

Here's my value-add proforma template (Google Sheet).

Use it, abuse it, and make moves.

That's it for today.

Hope you got some value.

If you have a question you want me to answer, please hit reply!

These proforma principles have guided my deals. See them in action in my 165K sq ft Milwaukee redevelopment.

(Yes, this is the real me; I read every email).

Be Well,

After 15+ years in real estate, I've learned what truly matters in this business.

These aren't textbook lessons — they're hard-earned insights from the trenches.

If I could go back and mentor my younger self, here's exactly what I'd say.

Learn from Failure

The most valuable lessons come from the deals that fall through and the investments that don't pan out.

Analyze these failures meticulously to understand what went wrong and how to avoid similar mistakes in the future.

Master Emotional Intelligence

Understanding your people's emotions and motivations can be more powerful than any sales tactic.

Real estate is about people, and honing your emotional intelligence can help you build trust and long-lasting relationships.

Listen actively, empathize genuinely, and communicate clearly.

Your clients and colleagues will remember how you made them feel more than the deals you closed.

Think Long-Term

Think about how your actions today will impact your business five, ten, or even twenty years down the line.

This perspective will guide you to make decisions that build a sustainable and reputable career.

Conclusion

Bonus tip: Diversify your skill set.

Real estate is multifaceted, and having a broad skill set will make you more adaptable.

Learn about finance, marketing, negotiation, and even technology trends that can influence the market.

This versatility will make you more resilient in a dynamic industry.

I've followed these principles and it has transformed my journey.

Apply them to your own path and watch your career improve.

These lessons shaped my journey into commercial real estate. I share more in my story of transitioning from residential.

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2 years ago, we were pouring money down the drain.

The property was half-empty, needed desperate repairs, and was half vacant—every commercial real estate investor's dream scenario, right?

The Remarkable Turnaround

Today, that same investment generates 5x more than when I started.

This exact same building now:

• Has full occupancy
• Is becoming more profitable
• Has met the dreams of the community

In less than 24 months, we've increased NOI from $162,000 to $855,000.

And here’s how we did this.

The Hidden Potential

My 3 business partners and I saw a desolate building.

But what we also saw was a huge amount of potential.

We saw what this same building could one day be.

What made this property attractive despite its condition:

• 21,000 vehicles driving by daily
• 83,000 square feet on 5.7 acres in affluent Lake County
• 1 mile average household income of $122,000 (just under the average US household)

Transformation Strategy

We began to fix what was damaged.

From paving the car park to white-boxing the vacant units (creating a fresh canvas for businesses), we completely transformed the appearance.

Beyond Traditional Leasing

When it came to filling the property and sourcing tenants, we didn't just rely on brokers to lease the units.

Instead, we actively marketed ourselves through platforms like:

• Facebook
• Crexi
• LoopNet

We also engaged directly with the community for outreach and feedback.

The Results

What have we achieved so far?

• 12 new tenants, from Subway to dance studios and hardware stores
• Less than $4 million spent in improvements
• Our trending NOI is $855K

It just goes to show that anything is possible when it comes to commercial real estate.

You just need a clear vision and an excellent team.

And our Lindenhurst Plaza project is a huge testament to that.

Follow me on LinkedIn or subscribe to my newsletter for more commercial real estate insights.

I have purchased many great deals.

I have 20+ years of experience.

Here’s my story.

My Humble Beginnings

On paper, things couldn't be better.

But in reality, things have been far from perfect.

You see, in my early childhood, I grew up in Lithuania when it was the USSR, in what is known as "communist dorms".

To paint you a picture ↴

• We didn't have much.
• Definitely, no easy life.
• 1 small room shared amongst all of us.
• The living situation was hardly ideal.

Looking back, I sometimes feel a little embarrassed to share this side of my story.

But today, it's important that I do!

My Journey of Growth

I've spent the last 2 decades:

• Learning as I go.
• Overcoming mistakes.
• Progressing and growing. (Not just professionally but personally too!)

But, I believe that anyone can change or reinvent their situation (just like I did.)

Why I'm Sharing This

This is why today I want to support and inspire more people on their own journey into commercial real estate.

• Sharing the key lessons I've learned along the way.
• Helping others to learn from my own mistakes.
• Giving away the key tips I've accumulated.

All to help other people like me who are ambitious enough to succeed and reshape their paths.

My Weekly Commitment

So each week, I open my laptop and every Sunday morning I think about the key lessons and share advice I've picked up along my journey.

I want to help elevate others on their own journey to success.

Join Our Community

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I became obsessed with studying case studies.

I wanted the most effective model for off-market deals.

It should add the most value in the least time and with the fewest resources.

What I've come to realize is that a model that works brilliantly for one operator can be a complete disaster for another.

Yet, finding good deals can make or break your success, and every real estate professional needs to master this skill.

With that in mind, I'll answer a question from Ruta (one of our readers).

How do you buy real estate that's sold off-market? Whether residential or commercial, I'm interested in properties that never hit the market.

Great question.

The strategies I will share work for both residential and commercial real estate.

And no, these aren’t some gimmicky hacks like "magic postcards" or "secret probate lists." (Those tools have their place, sure, but they’re not the foundation).

At the core of every successful off-market strategy is the list.

Everything starts there.

After that, you select the marketing channels to communicate with the people on that list.

And here’s the thing about marketing campaigns: they only work if you actually do them consistently.

It’s not a one-and-done thing; you’ve got to work at it, tweak it, and stay consistent.

My rule of thumb?

Spend 20% of your time and effort optimizing campaigns.

Let’s dive in.

Two Lists You Need

Here's a break down of what you need.

1️⃣ Broker List

Most people overlook this, but brokers are one of the best sources for off-market deals.

Why?

Brokers often shop deals to their most trusted buyers before they hit the market.

Why?

They like working with closers—buyers who are easy to work with and don’t re-trade.

Plus, they get to keep the entire commission when they don’t co-broker the deal.

Here’s how you build your broker list:

📍 Use CoStar to pull 5 years of closed comps for your target asset class in your market. Identify the listing brokers on those deals and start adding them to your list.

📍Introduce yourself. Call them and compliment their work on specific deals. Then share your “buy box” (the type of deals you’re looking for) and your track record.

📍 Set alerts on platforms like CoStar or Crexi to track new deals and identify new brokers to add to your list.

For your broker list, you'll need the basics: their name, email, and birthday (yes, you can find most of them on Facebook).

Also, include notes on your conversations.

Target 20 active brokers to start.

If you’re operating in a larger region, aim for 50.

Rank them on a scale of 1–10 based on the quality of the deals they bring you.

Focus your energy on the top performers.

Pro tip: Email your broker list consistently.

Remind them of your buy box.

Congratulate them on wins.

Share testimonials from other brokers.

Provide feedback on the deals they pitch you, especially the ones you pass on.

2️⃣ Owner List

This is where the technical heavy lifting happens.

The better your owner list, the better your campaign results.

Here’s how to build it:

1. Use CoStar to pull properties in your target market.
2. Identify the LLCs or entities that hold the title.
3. Scrub your list. Remove institutional owners—they rarely sell value-add properties in off-market situations. Focus on mom-and-pop owners instead.
4. Skip trace the members of the LLCs to get their contact info. You can use tools like TLO, LexisNexis, Lead Sherpa, IDI Core, or even hire freelancers on Fiverr to help.

Aim for a minimum of 1,000 owners on your list.

If you can get 5,000, even better.

Three Channels That Work Today

Once you’ve built your lists, the next step is putting them into action.

These are the three marketing channels I’ve found work consistently:

1️⃣ Email

Your broker list thrives on email communication.

At a minimum, you should be emailing them twice a month.

Don’t overcomplicate it:

📌 Share reminders of your buy box.

📌 Congratulate them on birthdays or professional achievements.

📌 Provide value—offer insights, tips, or even case studies of how you’ve added value to other properties.

📌 Invite them to lunch or coffee.

If you’re just starting out, Gmail will work fine for managing this communication.

But as your list grows, consider using tools like ActiveCampaign, Mailchimp, or Beehive.

(Beehive is my favorite.)

The goal is simple: get 5 phone calls per week with brokers pitching you deals or discussing your buy box.

2️⃣ Direct Mail

Direct mail works best with your owner list.

Write a simple letter introducing yourself and expressing interest in buying their property.

Keep it short—around 100-150 words.

Mention if you can close quickly or buy “as-is,” but don’t overpromise.

Direct mail's effectiveness isn't in the letter.

It's in the quality of your list and consistency of your outreach.

Send letters monthly.

It’s not unusual to get calls after 6–8 months of mailing consistently.

3️⃣ Cold Calling

This is the most underutilized channel, but also one of the most effective.

Take your owner list and start dialing.

If you can dedicate 2 hours a day, you should expect to generate at least one lead per day.

When I say “lead,” I mean someone who’s open to hearing your offer—not necessarily someone ready to sell immediately.

Conclusion

You can build one list and one channel in a quarter.

Within 9 months, you can have all three channels up and running by dedicating just 10 hours a week.

You should expect, at bare minimum, 1 deal in those 9 months.

On average, you should expect one deal per quarter from running these 3 channels consistently.

Let’s do some quick math: If a deal nets you $1M in value-add potential, and you spend 360 hours to land it, that’s $2,777 per hour.

For perspective, that’s twice the average hourly rate of an NFL player.

They are exceptionally talented and have trained their whole lives for that performance.

The difference?

Today, what I've shared with you doesn't need someone with extraordinary talent or years of training.

All it takes is consistency, time, and persistence.

Hope it hits home for you!

Got more questions?

I read every email, and I may feature your question in the next newsletter.

Subscribe to my newsletter here if you want to learn more or be featured.

...but I'm a collector and (dare I say?) a buff of real estate models.

For years, I've collected commercial real estate value-add models.

Why?

Successful models are like keys.

They unlock the path to success.

So today, I'm going down into my temperature-controlled wine cellar to bring out one of the finest bottles from my best value-add collection.

Buckle up, because this one’s got it all—big risks, big spend, and even bigger rewards.

Let’s get into the story of the Milwaukee Tech Center.

The Big Leap

In 2021, my partner Rafik Moore and I stumbled upon two industrial properties in Milwaukee.

Together, they totaled 165,000 sq. ft. of buildings on 15 acres, offered separately as two listings.

One was 6000 N 76th St. and the other was 7320 W Florist Ave.

But here’s the thing: if you connected both, it was an entire block in the city.

We saw the opportunity.

But this time, it was not a small property compared to our typical buy of 20K-50K sq ft boxes.

It was so big that you could see it on Google Maps when you zoomed out to view all of Milwaukee.

I remember thinking to myself that we typically park the car and walk the property, but this one was so huge that we needed to stay in the car and drive around it.

I thought, how are we going to pull this off?

This wasn’t just outside our comfort zone—it was leagues away, and for the first time this deal landed us in the local newspaper.

Here’s what we bought:

📌 Two buildings: 6000 N 76th St. and 7320 W Florist Ave.

📌 A combined 165,000 sq ft of space, already deteriorating and underperforming.

📌 15 Acres total, with the possibility of repaving 6 acres and expanding truck parking.

📌 5.1M with a $500K repair credit, negotiated during due diligence.

📌 A property with some tenants who weren't paying, weren't leaving, or were trashing the space.

📌 $450K NOI at purchase. However, impending vacancies would slash it to $250K in a few months after closing.

One building (76th St.) had a single logistics tenant leaving in six months.

The other (Florist) had five tenants, but the largest one was about to vacate, leaving it a half-empty building.

So this was a situation we were getting into.

The Vision

The property came with 15 acres of potential, and here’s how we saw it:

1️⃣ Truck parking: We envisioned repaving 6 acres, creating parking for 120 semis and box trucks.

At $20K per month in rental income, this would create $2M in value.

2️⃣ Small bay conversion: We imagined cutting two buildings into 25± smaller units ranging from 3,000 to 10,000 sq ft.

Each unit would have a dock and a drive-in door.

3️⃣ Renovation plan: We budgeted $2M for renovations but ended up spending closer to $3M.

Game Time

Here's a break of the steps.

Step 1: Exterior

✅ Clean-up came first. We started removing trashy tenants on day 1.

✅ Next, we gave the buildings a facelift (YouTube Video).

We repainted and repaired roofs, added LED lights, and installed fences with two automatic gates for security.

✅ We built a website and payment platform—milwaukeetruckparking.com.

It lets tenants pay online and get access codes.

Within 6 months, we optimized it to get to the #1 website on Google search when it comes to truck parking in Milwaukee.

Our truck parking spots are now 85%-95% occupied year-round.

Step 2: Interior

Florist building came first.

We turned the building's vacant half into 8 small-bay units, bringing the total to 15 units.

Here's what that took:

✅ Cutting in multiple doors along the perimeter and adding a 12-ft hallway in the middle.

✅ Submetering utilities to make tenants responsible for their own gas and electricity.

✅ Bringing in an additional 1,200 amps of power.

✅ Installing new HVAC systems, electrical wiring, LED lighting, and catch basins to allow for automotive and truck repair use.

Once Florist was done, we repeated the process at the 76th St. building, converting it into 7 smaller units.

Inside our warehouse

Leasing

Leasing started slow—painfully slow.

At first, the property had no buzz.

But as we wrapped up construction, the momentum shifted.

The new look, security, and improvements signaled progress, and tenants started calling.

Here’s how we filled the space:

➡️ We hired a broker under a non-exclusive agreement who brought in one lease.

➡️ The rest was done in-house. I handled most of the tenant leasing myself (YouTube Video).

➡️ Half of the deals came from Facebook. The other half came from Loopnet, direct mail, and direct-to-tenant prospecting.

Florist filled up within 6 months before construction was even complete.

76th St. wasn’t far behind, reaching full occupancy shortly after.

Stabilization

Let’s talk numbers. This property started with a NOI of $450K, which dropped to $250K post-vacancies.

But today?

🔥 Current NOI: $1.075M

🔥 Projected NOI (within 24 months): $1.24M

We’ve turned down an unsolicited offer for $11.5M last year.

Why? Because we know the potential.

The property is trending toward $13M+ in value after 1st round of leasing renewals.

Conclusion

📌 Breaking down large spaces into smaller units is a proven OG model that has stood the test of time and still works.

📌 We exceeded our budget by $1M, but we made up for it by achieving a higher NOI, which offset a significant shortfall.

📌 You don’t grow without risk. This deal took us out of our comfort zone, and it’s become one of our best moves yet.

Now, I want to close with this.

You have 16 days left until the New Year, which many think will be a roaring 2025.

I challenge you to pick your most inspiring value model by the time you pop the champagne bottle.

Just pick one and go after it hard in 2025.

You don't have to have a deadline when this needs to happen.

But keep it as your north star, high in your mind.

I promise, if you hold it there long enough, you'll make it happen.

And it’s been a little over two years since we bought this small bay industrial property in Tinley Park, IL (YouTube Walk Through), which taught me a few very interesting lessons.

Let’s dive in

Our partner Joe found this off-market deal through a broker.

He got the offer accepted at $1,100,000 with a $100,000 repair credit, CASH, AS-IS.

So the net price was $1M, which was $37/SF—a pretty good deal for that time.

He signed the deal on April 13, 2021.

It was a 27,000 Sq. Ft. industrial building on 2 acres with 4 existing tenants.

Each bay had 1 dock and 1 to 2 drive-in doors, with a clear height of 14-16 feet.

It was owned by a seller who hadn’t done much (if any) improvements for quite some time.

The leases were gross and month-to-month, close to $5/gross/foot.

Taxes were $3/SF, so the property was barely breaking even after operating expenses.

The property was in need of repairs, and tenants knew they were paying half of what the market rate was.

Our goal was to make some improvements, split the largest unit into two, and raise rents to market levels.

I projected that improvements would cost no more than $150,000 and that market rates would command $5.25-$5.5/SF NNN, which would bring us to $145K in NOI and $1.8M in value.

It should have taken us no longer than 12 months.

What happened next was quite unusual.

During due diligence, I walked the property and began tenant interviews.

I normally start this process during due diligence, especially when we have month-to-month leases.

Surprisingly, none of the tenants showed 100% commitment to stay.

They preferred to remain on month-to-month leases, and I was getting ready to look for new tenants.

What happened next was even more interesting—and something I’d never experienced before.

Foreclosure

We were to close in 60 days.

But, the seller stopped providing needed due diligence info, including the leases.

He was essentially trying to back out of the deal.

Later, I found out that one of the existing tenants had tried to offer a higher price after we already had it under contract.

We muddled through due diligence almost blind.

So, we decided to close, despite the seller providing almost no documentation.

In terms of financing, we lined up a bridge lender for $850,000, with the remaining $150K down payment and $150,000 for improvements coming from our cash.

What happened next was even more unusual.

The seller refused to come to the closing and wasn’t committing to a closing date.

The funny part is that our attorney and the seller’s attorney were long-time colleagues.

They didn’t want to escalate to legal action, and we tried to find a peaceful solution for almost a year—with no luck.

The seller was stubborn, thinking he could get away with it.

I attempted to arrange a meeting with the seller through the broker, but it was no use.

I told my attorney to record the contract on title and cloud it.

This would prevent the seller from selling the property behind my back.

That didn’t help either.

Then, I instructed the attorney to file a suit for specific performance, which is essentially a foreclosure process.

I didn’t want to go this route, as I believe both parties typically lose in legal actions—the only winners are the attorneys.

The best way is usually to negotiate and settle issues face-to-face.

Unfortunately, this wasn’t possible since the seller refused to meet.

Luckily, after the county sheriff served the seller, he changed his tune.

Closing and Renovation

He committed to closing—if we paid an extra $50,000.

We didn’t have to accept his counteroffer, but we just wanted to move forward, so we agreed.

We finally closed in September 2022 after being under contract for 1.5 years.

After closing, we proceeded with renovations.

We fixed the asphalt, sealed and striped it, and replaced a few HVAC units.

We fixed roof leaks, tuckpointed the brick façade, and painted the exterior.

That painting turned into another ordeal.

We pulled permits for all the work except painting, which normally isn’t required in other municipalities.

We received a citation and were required to remove the paint from the front-facing wall, which ended up costing us three times what we spent on painting.

With the building updated, we approached the original tenants to extend their leases.

One tenant, who had tried to buy the building, had purchased another property and left.

The other two tenants didn’t want a long-term agreement.

So, we signed 3-year leases with modest rent increases and a 60-day cancellation clause.

These were like month-to-month leases.

But, they had more weight with banks for refinancing than true month-to-month leases.

We also started marketing for lease (web flyer), and I had 4-5 prospects right away for the empty spaces.

Exit

This was just post-COVID free money Disneyland, a time when rates were low and leasing velocity was high.

We decided to test the market and sell to owner-user.

Small businesses flush with stimulus funds were willing to pay more than investors for turnkey properties.

I knew the building’s value, based on NOI, would be $1.8M once leased up and could be held for the long term.

However, if we could find a buyer willing to pay $2M, we’d sell.

We hired a broker, and within two weeks, we received seven offers.

We took the highest one, $2,020,000, but the buyer never submitted their earnest money deposit.

We ended up closing with the backup offer for $1,945,000.

It was from a national company, Stanley Steamer.

They planned to use the building for their trucks and operations.

The sale closed in June 2023.

Conclusion

1️⃣ While it took a long time, this deal was low-risk and not a heavy lift.

I’ll take this type of deal every time over a heavy lift with double or triple the profit.

2️⃣ Mismanaged small bay industrial properties with light rehabs are my favorite type of deal.

They're simple.

A bit of knowledge on renovations, leasing, and common sense is all it takes to unlock great value.

But the one thing you DON’T need is a degree in rocket science… because it’s not.

If I can do it, you can do it.

Read that again.

For more case studies like this one, check out my breakdown of our 165K sq ft Milwaukee redevelopment.

If you want to streamline your deal sourcing, take a look at Industrial IQ, the platform we are building for operators like us.

I also shared how another investor, Sho Kabani, built wealth using similar strategies in this profile.

You can do it.

And I’m showing you how.

I failed at it last week.

I prepared for absolute chaos and was expecting the apocalypse.

Let me tell you why.

Hurricane Milton was looming, and it was supposed to be the biggest, nastiest storm Florida had ever seen.

With four properties in Florida's southwest, valued at approximately $10M, I was on edge.

Two self-storage facilities in Fort Myers and Naples, one in Lehigh Acres, and a small-bay industrial property in Fort Myers.

Just dodging the aftermath of Hurricane Helen, I wasn’t feeling lucky.

Helen had only cost us $500 in minor roof damages.

The Fear Sets In

On Monday, my partner Shea called me and said, “Hey, there’s another storm developing”

My gut twisted.

Every forecast showed the storm zeroing in on Fort Myers.

My first thought: This is it.

I started running numbers in my head, looking at the insurance deductibles—5%, 10%—and figuring out that we would be out anywhere from $500K to $1M.

I was going in circles.

Also, my mom lives in Naples.

I called her that same night and told her to pack her bags and head to Miami.

By 6 a.m. Tuesday, she was on her way, safe and sound.

But me?

I was still wrestling with the disaster that was brewing in my mind.

Panic on the Rise

By Tuesday, it was official—Milton had upgraded to a Category 5, and every news outlet was screaming about the "catastrophic damage" it would bring.

The monster in my head went full throttle.

I wasn’t just thinking about roof damage anymore. I started picturing everything being wiped out.

The buildings would be gone.

Insurance companies wouldn't pay.

Banks wouldn't refinance loans.

Tenants would leave.

We'd be stuck with debt and investors' capital, with no real estate to back it up.

The idea spiraled so far that I actually started rationalizing a post-disaster plan.

We’ll raise a fund, buy the wreckage at pennies on the dollar, and wait for the market to bounce back.

It’s a terrible plan, but what choice would we have?

Wednesday morning, I woke up to the mayor of Fort Myers saying, “If you don’t leave now, you will die.”

My stress levels were off the charts. I was ready to brace for the worst.

Shea and I prepped a plan: we’d bring in crews from Chicago, get my truck and trailer loaded up, and be ready to head down and clean up the carnage.

Shea was lucky to find a contractor.

He braced the garage doors on the industrial property.

Bracing the garage doors for the storm

We expected them to blow off like they did in Hurricane Ian.

At this point, I wasn’t fun to be around.

Honestly, I was miserable.

The Turnaround

By Wednesday afternoon, something changed.

The models shifted.

Milton was headed north. The forecasts showed lower wind speeds for Fort Myers—about 60 mph.

After Hurricane Helen, which hit us at 70 mph, I realized we might actually be okay.

The cameras at our Fort Myers properties went down around 7 p.m. on Wednesday.

I spent the night wondering if we passed the storm OK.

But Thursday morning, the first tweet I saw was from a guy in Tampa Bay who had stayed in his boat through the storm.

He was smiling, the bay was fine, and I knew—we were fine too.

By Thursday, we had inspected all the properties.

The damage?

One single branch had fallen at Lehigh Acres.

No roof damage, no floods, no catastrophe.

What I Learned from My 72 Hours of Fear

Here's what I learned.

1. We Suffer More in Imagination Than in Reality, that’s what Seneca said. My fear monster had a field day. I spent days drowning in worst-case scenarios, and yet, none of them came true.
2. Managing a Distant Portfolio Is a Nightmare. This experience was a breaking point. We had already planned on selling our Florida properties, but Hurricane Milton sealed the deal. It’s too hard to manage properties from a distance, especially in hurricane-prone areas. We’ll only buy in regions where at least one partner is local.
3. Define Your Fears, Don’t Let Them Define You. Tim Ferriss’ video, is spot on for these situations.

Hurricane Milton didn’t turn out to be the disaster I feared.

But for 72 hours, it sure felt like the end of the world.

Next time, I’ll be preparing for the worst—but for sure I’ll give the utmost weight to hoping for the best.

Managing distant properties is challenging, which is why I focus on local deals. I share my strategy in my piece on transitioning to commercial real estate.

If you found this helpful, please share my newsletter with your friends.

Be Well,

Whenever you're ready, there are 3 ways I can help you:

1. Investing in Our Next Deal. If you are an accredited investor interested in commercial real estate opportunities, please sign up for our waiting list. We will notify you as soon as we have the next value add opportunity under contract.
2. Partner on The Deal. If you're a broker, wholesaler, or investor and have a great value add, a small bay industrial deal — we want to listen to what you've got.
3. Book a 1:1 Call. Personalized advice through live video consultation.

Let's get to business

In July 2021, we closed on two self-storage facilities in Tennessee for $1,075,371.

In November 2022, one of them appraised at $3.13M.

Two weeks ago, we sold it for $2.125M.

Let’s talk about it.

These were your classic value-add projects – totally mismanaged and ripe for turnaround.

The properties were located in Clarksville (2110 Golf Club Ln, click here for a real video) and Savannah (935 Pickwick Rd).

Both facilities were in terrible shape, with no website, no online presence, and an absentee owner who lived 600 miles away.

It was pretty obvious why these properties were underperforming.

The Savannah property was managed by someone who was likely struggling with dementia.

The Clarksville property was even worse – the manager was living on-site and pocketing cash from renters under the table.

Clearly, the first step was replacing management and installing professional systems to get these operations back on track.

Executive Summary of The Deal

We financed this deal with bridge lender.

Here is our summary of debt memo:

Z Equity Group is purchasing off market 2 value add self storage facilities in Tennessee.

Clarksville facility is 21,724 SF, has 234 storage units and sits on 1.6 acres.

The Savannah facility is 14,600 SF, has 81 units and sits on 2.97 acres. Both facilities are significantly mismanaged.

The owner is 77 years old and lives 600 miles away.

Clarksville property manager is suspected of intentionally
mismanaging the books and Savannah property manager has dementia.

Currently, rents are over 30% below market.

Economic vacancy in the Clarksville facility is over 50% and in the Savannah facility is over 40%. They have no online presence and take only checks or CASH.

Turning around is very straightforward. Replace existing management to offsite professional management.

Sign up with self storage automatic collection software, install automatic gates and keypads that connect to software to start leasing online.

Raise rents and occupancy to market (competition at Clarksville is 95%-100%).

Savannah has more saturation. We intend to hold Clarksville log term and Savannah to fix and flip.

At Clarksville, we'll do facade makeover, install automatic gates, keypads, repave asphalt, install new signs.

We'll also change outside lights to LED, repair/replace non-working doors, convert property manager apartment to additional 17 self storage units, convert front building to climate control building, install security system, paint exterior.

At the Savannah facility we'll trash out a small bay warehouse, repaint exterior, repaint property manager's apartment, replace A/C, seal coat the driveway, set up web, online collections and self storage software.

The total budget is expected to be $1,477,650 with the sponsorship seeking financing at 80% loan-to-Cost ("LTC") with an interest rate of 10% and 2% points with 18 months term.

While self-storage can work, I have found small bay industrial to be more consistent. Read why it is my favorite asset class.

The anticipated loan amount will be $1,182,120.

Stabilized value of Clarksville expected to be $1.79 million and Savannah — $425K.