If you’re considering commercial real estate and looking to which market to invest in, then you’ve got to check out today’s episode as real estate investor Scott Zukin offers hiswealth of knowledge. Scott shares the keys to success in commercial real estate as well as the beauty of living vicariously through the businesses you place in your building.
Cleaning hallways just to get through college and pay for his rent, Scott learned the value of a hard work ethic early on. He was running a cabinet-making business until he realized the skill-based nature of the business and that he was only as good as his hands. He decided to move to West Chester to work for his dad’s real estate business where they managed to grow the team and the business from 25 properties to now 65 mixed-use properties. West Chester is consistently voted “one of the best places to live” because it has its own buzz.
Here are some power takeaways from today’s conversation:
- Buying properties next to each other
- Carefully placing tenants in your building
- Focusing on the balance sheet vs. the cash flow
- Things to consider when you’re looking at which markets to invest in
- Putting your focus on relationships
- How your relationship with money changes
- Why Scott calls his mom the Dalai Mama
- The charities he supports and a huge project he’s working on
Episode Highlights:
[13:42] TIps in Buying Commercial Real Estate
Consider real estate properties that are next to each other. It’s much easier to just get along with yourself than to deal with other owners next to your property. If a tree has to come down, then you just cut it down. You don’t have to call your neighbor and negotiate who’s going to pay for what. That way, you create your own destiny. In commercial real estate, how you carefully place tenants in certain buildings is what defines your progress. You don’t want to be stuffing your building with a bunch of Italian restaurants. Instead, diversify the kinds of businesses you want to place in your buildings, and focus on building relationships and preventing vacancies.
[21:39] Balance Sheet vs. Cash Flow
Look at the debt side of the business instead of the cash flow side of the business. When you’re working on getting the debts paid down, you’re focusing on the balance sheet side of the business. Now, a lot of people are focused on cash flow. The challenge, however, is you don’t want to necessarily make a big improvement on the roof if you’re just looking at the cash flow.
[28:19] Things to Consider When You’re Looking at Which Markets to Invest In
There’s no one formula that works. The perfect mix in one area is not going to be the same mix somewhere else. You’ve just got to take a chance, go slow and carefully, and it takes a little bit of gut and a lot of numbers, as well as a lot of belief in the skills that you have.
[37:43] Changing Your Relationship with Money
Your relationship with money changes once your basic needs are met. Sometimes, it’s almost a spiritual thing. The money flows if you allow it to flow. Don’t fall into that trap of lusting for the next deal. Take a step back and block time for yourself and your family.
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