Don't Sign That Lease Yet: Crucial Advice for Practice Owners

WEBVTT

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I'll record your intro

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actually after this.

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So we'll just jump right into it,

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if that's all right.

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Okay, sounds great.

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So last time we had you on the show,

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I remember like half the time,

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I remember my mind just spinning.

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I was like,

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this guy just focuses on real

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estate for healthcare.

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I'm like healthcare providers.

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I'm like,

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this is where we are in the world

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where it's like niches are this powerful,

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powerful thing.

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So you've got sort of like a

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courtside seat at a lot of

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things that could go right and wrong.

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So I'm more than a thousand

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real estate deals across healthcare.

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I want to know what your biggest...

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if they only knew mistake

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that a practice owner still

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makes when it comes to

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their space because this

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thing sticks around when

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you sign that lease it's

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good for that term yeah

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yeah you're locked and

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loaded I think a lot of

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times people have this idea

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like well just you know

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I'll just do it again or I

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got a mulligan or I can

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change it it's like no man

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you're locking into a

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typically a ten-year

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contract for a lease.

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If you're buying a building,

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you cannot come in and out

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of commercial real estate

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deals the same way you do residential.

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There's a lot more time and energy.

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So you want to make sure you

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do it right the first time.

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So if I could only give

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people one piece of advice,

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and certainly I can give a lot more,

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but if I could only give one,

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it would be you have to have

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a strategy and posture in

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every negotiation that you go into.

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So that's kind of like the

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high level statement.

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And then like the underlying

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statement there is, well, people say,

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well, how do I do that?

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The only way you can have a

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strategy or posture in a

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commercial real estate

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negotiation is you have to

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have multiple options.

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And this is the number one

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error people make is

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whether they're in a

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current building and their

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lease is coming up for

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renewal and they're like, well,

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I'll just negotiate with my

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current landlord and see what I can get.

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That's a fool's game plan to

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get completely crushed in a

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negotiation and lose

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hundreds of thousands.

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Or they just drive around

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and see a property for a new location.

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They call them, oh, this would be great.

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And so the problem with that

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is you have nothing to benchmark

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terms against.

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All you can do is look at

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what they said in their first offer,

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where they started,

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which is never going to be

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a meaningful place.

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People go, oh yeah,

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I got the landlord to come down,

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or I got him to go from

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this amount of concessions

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to this amount.

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The landlord's smart enough

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to know that you think you

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getting a little bit of

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movement makes you feel good,

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but that deal could be

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terrible compared to what

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you could have received

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from three or four other landlords.

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In order to have posture and

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strategy in a commercial

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real estate negotiation,

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You've got to have multiple options.

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In order to have multiple options,

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you've got to know the market.

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You've got to take time to

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get in the market.

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You've got to make sure that

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you can put one landlord up

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against another landlord,

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and you've got to go two or

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three or four rounds of

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negotiations because

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landlords are not just

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going to give you their best terms.

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They're not just going to say, oh,

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you submitted an offer.

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Here's my best deal where

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I'm going to give you an

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extra three hundred

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thousand dollars over ten

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years more than I would

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have just because you asked.

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That's not how it works.

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I would say that's my number one point.

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And I gotta say one more

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thing that's tied to it is,

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hopefully this does not offend people,

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but it's a reality.

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There's not one out of a

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hundred landlords that's

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gonna assume that a

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healthcare provider knows

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what they're doing.

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And so if you're going into

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a commercial real estate

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transaction without representation,

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the landlord will be cordial to you.

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They'll be accommodating to you.

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They'll get you in the space

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or the listing broker,

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whoever you're talking to.

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They'll send you information.

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They're not going to assume

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you know what you're doing.

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They're going to assume that

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you are a fool.

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do you do you honestly think

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like that like jp chase

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morgan bank or bank of

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america or lockheed martin

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or chipotle or starbucks or

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whether it's office user or

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retail user you know

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whether it's an industrial

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manufacturer do you think

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there's gonna have some

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random person in the

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business who's whose

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expertise is clinical

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handling the real estate like

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No way.

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When a doctor shows up,

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the landlord's literally

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thinking themselves,

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I'm going to take this guy

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for literally three hundred,

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four hundred thousand

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dollars more than he would

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pay or she would pay if

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they had an agent.

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And it's just it's the unfortunately,

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it's just a really common

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mistake that doctors or

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health care providers make.

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It's I'm intelligent.

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no one's doubting your

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intelligence when it comes

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to health care but you're

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not a real estate expert

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like it's it's not it's

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it'd be no different than a

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patient being like well I

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can just do my own

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procedure like you know I

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saw a video online like you

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know it's like oh yeah this

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guy went to school for like

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six eight ten twelve years

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he's been practicing

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practicing for x number of

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years since that time it's

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their only their primary

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and only craft like they

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know what they're doing

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they spend eight ten hours a day doing it

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you're not going to get the

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same result taking it for a

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drive once every ten years.

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It's the same thing for real estate.

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I was going to say,

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my follow-up question was going to be,

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why would healthcare

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providers maybe not be equipped to this?

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Are we just bleeding hearts?

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But you answered it, which is like,

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it's not our bag,

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so you brought a knife to a gunfight.

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yeah no I mean the the

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question of like can you do

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it yes like you have the

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ability to do it you can

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pick up a phone you can

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call a landlord or listing

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agent say send me a pro a

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brochure can we meet can I

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see the property send me a

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proposal like you can do

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those things um but the

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landlord is going to look

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at the person showing up

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without representation and

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again I worked for

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landlords for almost ten

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years before I before I

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started this company I I

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did a lot of landlord work and when

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especially healthcare

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providers would show up

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without representation.

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The landlord's thought was like,

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literally like what an idiot,

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like what a fool, like, again,

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there's no possible way that,

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that fortune,

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five hundred companies are

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just having some random guy

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or gal show up.

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So the landlords,

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when they'd see these

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doctors show up without representation,

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they would be like, let's make a deal.

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And they'd even say stuff like, Hey man,

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like, you know,

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I want to take care of you.

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You seem like a good guy or, you know,

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like I like you.

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Like they would say things

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like I'd listen to the

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landlords or other listing

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brokers or property managers,

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like make comments to the doctors.

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And I'm just like, Oh man, like,

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this is just such a bad, like,

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like subpar,

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like high school drama that you're like,

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you're just watching this

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really bad performance.

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You're just like,

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and the doctors are just like, oh,

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this is great.

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Now he said he had to take

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care of me or he says he really likes me.

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So he was going to give me a better deal.

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Or he said,

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because I didn't have an agent

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that he'd give me a better

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deal as opposed to paying

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an agent at commission.

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He'd give me the, he'd give me a discount.

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And it's like, it's like, dude,

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it's not how it works, man.

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Sounds like what you don't know.

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can hurt you and can hurt

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you bad deep and for a long

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time that you can't take a

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mulligan on no no so yeah I

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mean it's one of those

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things and so then the next

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question is people say well

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you know well why wouldn't

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someone hire someone um

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there's a couple reasons

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why um number one a lot of

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times the they just doctors

00:07:11.189 --> 00:07:12.310
health providers office

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administrators they don't

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have a lot of time and

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they're like I don't know

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what to do I don't know

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where to start I'll just

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just give it to me and I'll

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do it and out of like

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desperation or frustration

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Or just timing, they're just like,

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I just had to do this.

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I don't have time.

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Let's figure it out.

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That's one reason.

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Another reason is they think about it,

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but they don't know who to call.

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Or maybe they get introduced

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to a couple commercial

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brokers that primarily

00:07:36.939 --> 00:07:38.000
represent landlords.

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They don't give them the time of day.

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They don't show them respect.

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A lot of landlord brokers

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don't like doing tenant and

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buyer rep for a lot of reasons.

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And so they talk to a broker

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or two and they're like, well,

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this guy doesn't seem like

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he's going to help me at all.

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And so they're saying, well,

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I don't have anyone good.

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And then the third reason is

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they'll just say,

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I don't have the money or I

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don't want to spend the money.

00:07:59.666 --> 00:08:01.509
And this is where, again,

00:08:01.928 --> 00:08:03.009
what you don't know hurts

00:08:03.029 --> 00:08:03.750
you at a high level.

00:08:04.550 --> 00:08:05.471
Commissions and commercial

00:08:05.511 --> 00:08:06.692
real estate are paid just

00:08:06.732 --> 00:08:08.052
like in residential real estate.

00:08:08.153 --> 00:08:09.374
They're paid by the landlord

00:08:09.394 --> 00:08:09.894
or the seller.

00:08:10.499 --> 00:08:11.720
If you're selling your house,

00:08:12.841 --> 00:08:14.401
it's incredibly rare to

00:08:14.440 --> 00:08:16.081
tell the buyer that they're

00:08:16.101 --> 00:08:17.403
going to pay their agent.

00:08:17.442 --> 00:08:19.584
It's just not the real estate industry.

00:08:19.783 --> 00:08:21.425
Sellers of houses set aside

00:08:21.444 --> 00:08:22.446
a commission amount that's

00:08:22.505 --> 00:08:23.786
negotiable with the

00:08:23.826 --> 00:08:24.726
percentage of the deal.

00:08:25.107 --> 00:08:26.208
And then they say, look,

00:08:26.228 --> 00:08:27.028
to the listing agent,

00:08:27.088 --> 00:08:28.168
you get half and then give

00:08:28.189 --> 00:08:29.589
the other half to the buyer's agent.

00:08:30.555 --> 00:08:32.436
if the buyer shows up without an agent,

00:08:32.456 --> 00:08:33.437
that listing agent gets a

00:08:33.476 --> 00:08:34.216
double commission.

00:08:34.736 --> 00:08:36.217
So in a scenario,

00:08:36.378 --> 00:08:37.479
commercial real estate healthcare,

00:08:37.839 --> 00:08:39.320
when a doctor shows up or

00:08:39.360 --> 00:08:40.340
health provider shows up

00:08:40.399 --> 00:08:41.541
and they don't have an agent,

00:08:41.581 --> 00:08:42.520
the listing agent gets a

00:08:42.541 --> 00:08:43.981
double commission or the

00:08:44.022 --> 00:08:45.342
landlord just keeps that money.

00:08:45.883 --> 00:08:47.543
And so it's not a for sale by owner.

00:08:47.562 --> 00:08:48.884
Like if you're a doctor,

00:08:48.903 --> 00:08:49.504
health care provider,

00:08:49.624 --> 00:08:50.864
you're not you're not the

00:08:51.104 --> 00:08:52.364
owner of the property

00:08:52.423 --> 00:08:54.764
deciding who gets paid what commission.

00:08:55.125 --> 00:08:56.205
And if you don't use an agent,

00:08:56.245 --> 00:08:58.625
you keep it as a tenant or buyer.

00:08:59.004 --> 00:08:59.745
You're literally just

00:08:59.784 --> 00:09:00.966
telling the listing agent, hey,

00:09:01.105 --> 00:09:02.265
take my commission that

00:09:02.306 --> 00:09:03.645
would have gone to my agent.

00:09:03.846 --> 00:09:05.785
You get fat off that and I'm

00:09:05.806 --> 00:09:06.767
going to get completely

00:09:06.846 --> 00:09:08.027
hosed because I don't have

00:09:08.047 --> 00:09:09.187
anyone to help me.

00:09:09.706 --> 00:09:10.667
So it's a no brainer.

00:09:10.947 --> 00:09:12.047
So when health care

00:09:12.067 --> 00:09:13.067
providers realize you're

00:09:13.087 --> 00:09:15.048
not saving money by not having an agent,

00:09:15.509 --> 00:09:16.610
The money is already set

00:09:16.669 --> 00:09:17.451
aside and you're just

00:09:17.471 --> 00:09:19.312
basically forfeiting this benefit.

00:09:19.793 --> 00:09:21.174
Then the light bulb comes on.

00:09:21.195 --> 00:09:21.875
They're like, okay, well,

00:09:21.895 --> 00:09:22.897
this is a no brainer.

00:09:22.937 --> 00:09:24.638
But then the next question

00:09:24.658 --> 00:09:25.519
goes back to that other

00:09:25.558 --> 00:09:27.640
question of how do I find someone good?

00:09:27.681 --> 00:09:29.263
That's a whole nother situation.

00:09:29.302 --> 00:09:30.504
But once they realize

00:09:30.524 --> 00:09:31.445
they're not paying for it,

00:09:31.465 --> 00:09:32.346
it's not going to cost them

00:09:32.385 --> 00:09:33.607
tens of thousands of dollars.

00:09:34.207 --> 00:09:35.249
You can't afford it because

00:09:35.269 --> 00:09:36.110
it's not going to cost you

00:09:36.129 --> 00:09:36.831
anything directly.

00:09:38.125 --> 00:09:39.246
That changes the narrative.

00:09:39.267 --> 00:09:40.226
So then it becomes,

00:09:40.267 --> 00:09:41.447
how do I find good people then?

00:09:42.028 --> 00:09:43.149
So I'm not letting you go

00:09:43.188 --> 00:09:43.948
until you tell me that.

00:09:45.129 --> 00:09:46.630
How to find someone good.

00:09:46.671 --> 00:09:48.812
So the criteria of what

00:09:48.831 --> 00:09:49.812
you're looking for

00:09:50.072 --> 00:09:52.493
determines the course of action.

00:09:52.754 --> 00:09:53.634
You're looking for someone

00:09:53.653 --> 00:09:54.715
who understands healthcare.

00:09:54.735 --> 00:09:55.674
So that's really important.

00:09:56.174 --> 00:09:57.855
Someone that does industrial

00:09:57.895 --> 00:09:59.897
warehouse manufacturing deals, like sure,

00:09:59.956 --> 00:10:01.057
they can get a deal done,

00:10:01.418 --> 00:10:02.217
but you want someone who

00:10:02.298 --> 00:10:03.178
understands healthcare.

00:10:03.198 --> 00:10:03.778
That's number one.

00:10:04.183 --> 00:10:04.804
Number two,

00:10:04.924 --> 00:10:06.105
you want someone that does not

00:10:06.125 --> 00:10:07.567
have conflicts of interest.

00:10:07.986 --> 00:10:09.067
A conflict of interest is

00:10:09.087 --> 00:10:10.009
when someone's trying to

00:10:10.048 --> 00:10:11.910
represent two opposing parties.

00:10:12.451 --> 00:10:13.873
And this is super obvious, again,

00:10:13.913 --> 00:10:14.673
when you hear it,

00:10:14.692 --> 00:10:15.374
but a lot of people don't

00:10:15.394 --> 00:10:15.974
think about this one.

00:10:16.754 --> 00:10:17.916
If somebody sued you,

00:10:17.936 --> 00:10:18.716
you're not going to ask the

00:10:18.736 --> 00:10:20.398
attorney who is suing you

00:10:20.677 --> 00:10:22.740
to help you out of the situation.

00:10:22.860 --> 00:10:23.801
You've got to have your own

00:10:23.841 --> 00:10:24.581
representation.

00:10:25.081 --> 00:10:25.482
Same thing,

00:10:25.602 --> 00:10:28.184
if you get a tax audit or the IRS says,

00:10:28.264 --> 00:10:29.105
what's going on here?

00:10:29.655 --> 00:10:31.663
You don't call the IRS guy and say, Hey,

00:10:31.703 --> 00:10:32.707
give me some advice.

00:10:32.768 --> 00:10:34.816
Like you get your own CPA or attorney.

00:10:36.235 --> 00:10:38.157
You can't work for, or you can't,

00:10:38.197 --> 00:10:39.356
you can't have a listing

00:10:39.456 --> 00:10:41.076
agent that's working for a

00:10:41.116 --> 00:10:42.518
landlord also helping you.

00:10:42.538 --> 00:10:43.077
So you've got to have

00:10:43.097 --> 00:10:44.518
someone who is conflict free,

00:10:44.878 --> 00:10:46.859
who's doing tenant buyer representation.

00:10:47.278 --> 00:10:49.318
They're not listing properties in the area,

00:10:49.678 --> 00:10:50.659
and they're also not going

00:10:50.679 --> 00:10:52.860
to use your deal as bait to

00:10:52.899 --> 00:10:53.740
get a relationship with the

00:10:53.779 --> 00:10:55.000
new landlord and like just

00:10:55.041 --> 00:10:56.760
kind of glad hand the landlord,

00:10:56.801 --> 00:10:57.701
get your deal done.

00:10:57.721 --> 00:10:59.261
Then all of a sudden, two weeks later,

00:10:59.402 --> 00:11:00.981
their signs in front of the building that,

00:11:01.201 --> 00:11:02.361
that you're leasing now,

00:11:02.662 --> 00:11:03.743
and they were formerly your agent.

00:11:03.763 --> 00:11:04.982
Now they're the landlord's agent.

00:11:05.355 --> 00:11:06.537
That happens all the time.

00:11:06.557 --> 00:11:08.537
So healthcare experience,

00:11:09.038 --> 00:11:11.318
tenant and buyer rep, expertise and focus,

00:11:11.399 --> 00:11:12.519
no conflicts of interest.

00:11:12.999 --> 00:11:14.740
So you can search that online.

00:11:14.759 --> 00:11:15.639
You can Google like

00:11:15.740 --> 00:11:17.061
healthcare tenant buyer rep.

00:11:18.041 --> 00:11:20.543
You can use terminology like

00:11:20.562 --> 00:11:21.482
that for whatever search

00:11:21.523 --> 00:11:22.243
engine you're using.

00:11:23.004 --> 00:11:24.403
But another great way to do

00:11:24.443 --> 00:11:26.284
it is you just talk to industry experts.

00:11:26.304 --> 00:11:28.206
Like you find lenders that

00:11:28.245 --> 00:11:29.426
specialize in healthcare.

00:11:29.466 --> 00:11:32.988
You find CPAs or attorneys or architects

00:11:33.413 --> 00:11:34.773
And if you ask a few people, Hey,

00:11:34.812 --> 00:11:35.913
who do you know that that

00:11:36.193 --> 00:11:37.374
really specializes in

00:11:37.413 --> 00:11:38.594
healthcare tenant buyer rep

00:11:38.614 --> 00:11:41.094
for real estate, no conflicts of interest,

00:11:41.615 --> 00:11:42.495
you're going to probably

00:11:42.534 --> 00:11:44.414
hear similar names in a

00:11:44.534 --> 00:11:45.934
certain city or market that

00:11:45.975 --> 00:11:46.715
are prominent.

00:11:47.155 --> 00:11:48.056
And then that gives you a

00:11:48.135 --> 00:11:48.956
short list of people to

00:11:48.995 --> 00:11:49.855
start talking to

00:11:49.975 --> 00:11:51.196
interviewing and then

00:11:51.235 --> 00:11:52.456
trying to find someone that you like.

00:11:52.496 --> 00:11:54.116
But when all else fails,

00:11:54.177 --> 00:11:55.456
if you don't have those relationships,

00:11:55.476 --> 00:11:56.817
just get online, search it,

00:11:56.917 --> 00:11:58.597
start making some phone calls or emails.

00:11:59.258 --> 00:12:00.158
And you know, the,

00:12:00.922 --> 00:12:02.602
The direction is pretty simple.

00:12:02.822 --> 00:12:04.003
Just don't stop until you

00:12:04.023 --> 00:12:05.124
find someone you like.

00:12:05.783 --> 00:12:06.403
Talk to someone.

00:12:06.423 --> 00:12:06.683
You're like,

00:12:06.703 --> 00:12:08.044
I'm just not feeling this person.

00:12:08.804 --> 00:12:10.304
Even if they come highly referred,

00:12:10.325 --> 00:12:11.306
just go on to the next person.

00:12:12.306 --> 00:12:13.866
There is more than one fish in the sea,

00:12:14.287 --> 00:12:15.606
especially in this situation.

00:12:16.168 --> 00:12:16.988
And there's enough people

00:12:17.067 --> 00:12:17.847
out there that you should

00:12:17.868 --> 00:12:19.168
be able to find someone that you like,

00:12:19.328 --> 00:12:20.589
trust, want to work with,

00:12:20.928 --> 00:12:21.529
and that you actually

00:12:21.549 --> 00:12:22.450
believe is going to help you.

00:12:23.509 --> 00:12:23.690
All right.

00:12:23.710 --> 00:12:24.591
You mentioned this word before,

00:12:24.630 --> 00:12:25.331
which is lease.

00:12:25.611 --> 00:12:26.932
You mentioned another word was just buy.

00:12:26.993 --> 00:12:27.994
I'm feeling like there's a

00:12:28.033 --> 00:12:28.914
health care phrase going to

00:12:28.934 --> 00:12:30.035
come up like it depends.

00:12:30.676 --> 00:12:31.636
But a lot of people are thinking,

00:12:31.677 --> 00:12:32.758
should I lease or buy?

00:12:33.158 --> 00:12:34.539
I'm guessing there's a lot of depends.

00:12:34.659 --> 00:12:35.600
How should a practice owner

00:12:35.620 --> 00:12:37.562
really think through that big decision,

00:12:37.621 --> 00:12:39.244
especially maybe early in

00:12:39.264 --> 00:12:40.625
their growth as a practice owner?

00:12:41.403 --> 00:12:41.623
Yeah,

00:12:41.682 --> 00:12:44.144
so I'm a huge fan of owning

00:12:44.183 --> 00:12:46.163
commercial real estate if

00:12:46.203 --> 00:12:47.264
it's a great location,

00:12:47.304 --> 00:12:48.245
a great building and the

00:12:48.284 --> 00:12:49.304
numbers make sense.

00:12:49.686 --> 00:12:51.365
And so it's kind of like

00:12:51.466 --> 00:12:52.446
leasing a house versus

00:12:52.466 --> 00:12:54.027
buying a house or renting versus buying.

00:12:54.986 --> 00:12:55.927
If you can find a great

00:12:55.966 --> 00:12:57.048
house in an area that you

00:12:57.067 --> 00:12:59.207
want to be in and the numbers make sense,

00:12:59.628 --> 00:13:00.328
I think there's a lot of

00:13:00.428 --> 00:13:02.509
arguments why ownership is

00:13:02.548 --> 00:13:04.389
better than renting.

00:13:05.289 --> 00:13:06.471
But it also depends on the

00:13:06.530 --> 00:13:08.251
season of your life and it

00:13:08.272 --> 00:13:10.253
depends on a lot of factors.

00:13:10.293 --> 00:13:11.352
But here's some of the

00:13:11.373 --> 00:13:12.192
criteria I tell you.

00:13:12.874 --> 00:13:14.735
Number one, when you go into a market,

00:13:15.495 --> 00:13:16.215
let's say you said, hey,

00:13:16.235 --> 00:13:17.375
I want to be in this area,

00:13:17.475 --> 00:13:19.476
this sub market within a two,

00:13:19.496 --> 00:13:21.177
three mile radius of this location,

00:13:21.197 --> 00:13:21.977
whatever it might be.

00:13:22.477 --> 00:13:23.438
There might not be any

00:13:23.519 --> 00:13:24.399
options to purchase in

00:13:24.418 --> 00:13:25.340
commercial real estate.

00:13:25.460 --> 00:13:26.460
Like in residential real estate,

00:13:26.480 --> 00:13:27.279
there's almost always

00:13:27.320 --> 00:13:28.400
another neighborhood or

00:13:28.620 --> 00:13:30.562
another building or a house to buy.

00:13:31.062 --> 00:13:32.243
In commercial real estate,

00:13:32.342 --> 00:13:33.442
if you're in a certain area,

00:13:33.942 --> 00:13:35.144
you could run a certain two

00:13:35.183 --> 00:13:36.163
mile radius and not find

00:13:36.264 --> 00:13:37.284
one property for sale.

00:13:38.345 --> 00:13:40.025
From a scarcity standpoint,

00:13:40.046 --> 00:13:40.946
there are a lot less

00:13:40.985 --> 00:13:41.946
commercial properties that

00:13:41.985 --> 00:13:43.706
are for sale than there are for lease,

00:13:44.206 --> 00:13:45.168
and then there's a lot less

00:13:45.347 --> 00:13:46.408
properties that are inside

00:13:46.427 --> 00:13:48.009
of a certain price range that work.

00:13:48.149 --> 00:13:50.230
A four story office building

00:13:50.250 --> 00:13:51.330
that's a hundred thousand

00:13:51.370 --> 00:13:52.450
square feet is not going to

00:13:52.470 --> 00:13:54.110
be an option for most

00:13:54.150 --> 00:13:54.931
healthcare providers.

00:13:54.951 --> 00:13:55.652
They're not going to have

00:13:55.731 --> 00:13:56.792
fifteen million dollars.

00:13:56.812 --> 00:13:57.312
They're going to say,

00:13:57.331 --> 00:13:58.572
I have a million and a half dollars.

00:13:59.349 --> 00:13:59.589
you know,

00:13:59.609 --> 00:14:00.850
the first question is what's the

00:14:00.929 --> 00:14:02.451
inventory, what's the availability.

00:14:02.991 --> 00:14:04.993
Um, the next question is, you know,

00:14:05.013 --> 00:14:05.854
could you have the down

00:14:05.894 --> 00:14:06.794
payment and can you afford

00:14:06.835 --> 00:14:07.615
the monthly payment?

00:14:07.975 --> 00:14:08.655
You might say, Hey,

00:14:08.676 --> 00:14:09.917
that's a beautiful property.

00:14:10.376 --> 00:14:11.817
Um, it's right where I want it to be.

00:14:12.139 --> 00:14:12.818
But again, if,

00:14:12.979 --> 00:14:14.740
if the cost of buying that

00:14:14.780 --> 00:14:15.400
is going to give you a

00:14:15.461 --> 00:14:17.582
monthly payment of and you

00:14:17.602 --> 00:14:19.965
can rent for six thousand, you might say,

00:14:20.044 --> 00:14:21.645
look, the juice isn't worth the squeeze.

00:14:21.686 --> 00:14:21.846
Like

00:14:22.341 --> 00:14:22.600
Sure.

00:14:22.701 --> 00:14:23.902
I love to own my own building.

00:14:24.022 --> 00:14:25.282
I love principal pay down.

00:14:25.402 --> 00:14:26.482
I love depreciation.

00:14:26.543 --> 00:14:28.523
I love tax deductions that

00:14:28.543 --> 00:14:30.423
you get when you own, but it's, it's not,

00:14:30.683 --> 00:14:32.945
it's not conducive to, you know,

00:14:32.985 --> 00:14:34.666
me being successful in my practice.

00:14:35.346 --> 00:14:36.166
Other times you find these

00:14:36.206 --> 00:14:38.287
buildings that the price works,

00:14:38.647 --> 00:14:39.967
the numbers work, et cetera,

00:14:40.008 --> 00:14:41.327
but it's not a good location.

00:14:41.368 --> 00:14:42.948
Like, you know, you gotta turn right,

00:14:42.989 --> 00:14:44.070
turn left, turn right.

00:14:44.090 --> 00:14:45.549
And it's the third building behind the,

00:14:45.710 --> 00:14:47.951
you know, behind the, the warehouse.

00:14:47.990 --> 00:14:48.551
And you're like,

00:14:48.811 --> 00:14:50.231
that's not gonna help me because,

00:14:50.970 --> 00:14:52.451
While the numbers make sense,

00:14:53.471 --> 00:14:54.890
patients are not going to like it.

00:14:55.010 --> 00:14:56.652
It's not going to help my referrals.

00:14:57.131 --> 00:14:58.173
Staff's not going to be as

00:14:58.212 --> 00:14:59.352
excited to show up to work

00:14:59.373 --> 00:15:00.253
here every day compared to

00:15:00.273 --> 00:15:00.953
the other options.

00:15:00.974 --> 00:15:04.274
So the simple game plan is this.

00:15:04.794 --> 00:15:06.176
If you're open to purchasing

00:15:06.336 --> 00:15:07.816
outside of leasing or additional leasing,

00:15:08.176 --> 00:15:08.897
go to the market,

00:15:09.017 --> 00:15:10.297
look at all your top options,

00:15:10.557 --> 00:15:11.738
narrow them down to the top

00:15:11.778 --> 00:15:12.817
three or four properties.

00:15:13.399 --> 00:15:14.919
negotiate simultaneously on

00:15:14.940 --> 00:15:15.801
three or four properties,

00:15:15.841 --> 00:15:17.601
whether it's for lease or for purchase.

00:15:18.042 --> 00:15:18.982
And then you compare the

00:15:19.043 --> 00:15:20.443
numbers and you say things like,

00:15:20.884 --> 00:15:22.205
what's the cost to get in the lease?

00:15:22.225 --> 00:15:23.745
What's the cost to get into the purchase?

00:15:24.187 --> 00:15:24.966
What does the monthly

00:15:25.006 --> 00:15:25.967
payment look like on a

00:15:26.008 --> 00:15:27.288
monthly cashflow basis?

00:15:27.816 --> 00:15:28.897
And then you factor in

00:15:28.937 --> 00:15:30.437
things like principal pay down.

00:15:30.738 --> 00:15:31.698
Every month you cut a check

00:15:31.719 --> 00:15:33.400
to a mortgage company or a

00:15:33.441 --> 00:15:34.240
bank or a lender,

00:15:34.301 --> 00:15:35.322
your net worth goes up

00:15:35.341 --> 00:15:36.863
because a portion pays down principal.

00:15:37.364 --> 00:15:38.764
What's the depreciation look

00:15:38.804 --> 00:15:40.125
like on the purchase of the real estate?

00:15:40.145 --> 00:15:41.047
Because you can depreciate

00:15:41.067 --> 00:15:42.567
the real estate and pick up

00:15:42.788 --> 00:15:43.869
a lot of times tens of

00:15:43.889 --> 00:15:44.669
thousands of dollars per

00:15:44.710 --> 00:15:46.091
year in extra tax deductions.

00:15:46.610 --> 00:15:47.532
And then what do the tax

00:15:47.552 --> 00:15:49.234
deductions look like in a lease,

00:15:49.274 --> 00:15:49.813
in a purchase?

00:15:49.833 --> 00:15:50.575
How do they compare?

00:15:51.075 --> 00:15:51.916
That's called the purchase

00:15:51.936 --> 00:15:53.037
versus lease analysis.

00:15:53.076 --> 00:15:53.697
And once you get to the

00:15:53.736 --> 00:15:55.519
bottom of that equation,

00:15:55.979 --> 00:15:56.879
you'll see the effective

00:15:56.919 --> 00:15:58.681
cost of owning versus leasing.

00:15:59.120 --> 00:16:00.221
And then it'd be really clear,

00:16:00.260 --> 00:16:01.902
like either yes,

00:16:01.922 --> 00:16:03.363
this makes sense to buy or no,

00:16:03.403 --> 00:16:04.303
it's too expensive.

00:16:04.984 --> 00:16:05.063
Um,

00:16:05.124 --> 00:16:06.784
but the numbers will basically tell you

00:16:06.865 --> 00:16:08.086
very quickly whether it's

00:16:08.125 --> 00:16:09.125
even an option or not.

00:16:09.687 --> 00:16:11.028
And sometimes you might have

00:16:11.067 --> 00:16:11.847
three or four options to

00:16:11.888 --> 00:16:12.648
purchase and you're in a

00:16:12.687 --> 00:16:13.308
really good place.

00:16:13.349 --> 00:16:15.149
Other times, like you might want to buy,

00:16:16.008 --> 00:16:17.229
you have nothing to purchase

00:16:17.269 --> 00:16:18.210
it just doesn't make sense

00:16:18.230 --> 00:16:19.552
so inventory will determine

00:16:19.572 --> 00:16:20.412
that for you a lot of times

00:16:20.451 --> 00:16:22.014
too smart a lot of good

00:16:22.033 --> 00:16:22.754
questions you should be

00:16:22.855 --> 00:16:24.096
asking and one of them I

00:16:24.135 --> 00:16:25.197
bet you would say your

00:16:25.236 --> 00:16:27.178
biggest advantage is time

00:16:27.198 --> 00:16:28.220
you mentioned earlier these

00:16:28.259 --> 00:16:29.441
things sneak up you're

00:16:29.480 --> 00:16:31.163
running a business then a

00:16:31.222 --> 00:16:32.624
lease ending is coming up

00:16:32.644 --> 00:16:33.345
and you're like I'll get to

00:16:33.384 --> 00:16:34.205
it I'll get to it until

00:16:34.225 --> 00:16:35.046
you're like man we got to

00:16:35.086 --> 00:16:36.567
solve this thing so those

00:16:36.607 --> 00:16:37.509
things can sync up quick

00:16:37.568 --> 00:16:38.470
what's what's a piece of

00:16:38.490 --> 00:16:39.450
advice you wish every

00:16:39.490 --> 00:16:40.490
provider would follow

00:16:42.030 --> 00:16:42.351
months,

00:16:42.412 --> 00:16:44.174
a year before that renewal date

00:16:44.255 --> 00:16:44.996
actually hits.

00:16:45.298 --> 00:16:45.457
Well,

00:16:45.958 --> 00:16:47.883
you actually just hit it yourself and

00:16:48.024 --> 00:16:49.245
start the process at least

00:16:49.285 --> 00:16:50.389
twelve months in advance.

00:16:51.028 --> 00:16:53.470
A lot of landlords are very,

00:16:53.590 --> 00:16:56.652
very savvy with this and

00:16:56.751 --> 00:16:58.212
they will run the clock out.

00:16:58.373 --> 00:16:59.214
And so, you know,

00:16:59.254 --> 00:17:01.174
whether you're a sports guy or not, or,

00:17:01.534 --> 00:17:01.796
you know,

00:17:01.875 --> 00:17:03.056
you watch like you watch

00:17:03.076 --> 00:17:04.636
football and you know,

00:17:04.678 --> 00:17:05.897
the team who's on defense

00:17:05.917 --> 00:17:07.599
is down and the team on offense is like,

00:17:07.619 --> 00:17:07.759
look,

00:17:07.799 --> 00:17:09.240
we're going to run the clock out there.

00:17:09.260 --> 00:17:11.021
They're staying in bounds at all costs.

00:17:11.321 --> 00:17:12.222
They're going to run the ball,

00:17:12.262 --> 00:17:12.903
not pass it.

00:17:12.923 --> 00:17:14.104
They want that clock just to

00:17:14.124 --> 00:17:15.625
keep taking down because

00:17:15.664 --> 00:17:16.486
they know that if they can

00:17:16.526 --> 00:17:18.267
keep the defense from getting the ball,

00:17:18.686 --> 00:17:19.928
They're not going to have time to win.

00:17:19.968 --> 00:17:21.829
So a lot of landlords will

00:17:21.869 --> 00:17:23.531
wait till the tenant is

00:17:23.592 --> 00:17:24.873
like a month or two or

00:17:24.932 --> 00:17:26.795
three from their lease expiring.

00:17:27.295 --> 00:17:28.395
And then they'll realize

00:17:28.415 --> 00:17:29.837
that that tenant has no

00:17:29.857 --> 00:17:32.140
ability within a reasonable

00:17:32.180 --> 00:17:33.922
timeframe to go find another location,

00:17:33.961 --> 00:17:35.262
get it built out, relocate.

00:17:35.663 --> 00:17:36.805
And so then they get stuck

00:17:36.825 --> 00:17:38.747
in this corner with like,

00:17:38.886 --> 00:17:39.928
I guess I have no option

00:17:40.008 --> 00:17:41.809
besides to stay and take this deal.

00:17:42.290 --> 00:17:43.231
And then at that point,

00:17:43.291 --> 00:17:44.993
the landlord knows whatever

00:17:45.054 --> 00:17:46.075
that tenant asked for,

00:17:46.234 --> 00:17:47.557
they're literally begging like,

00:17:47.696 --> 00:17:49.398
would you give me a better lease rate?

00:17:49.439 --> 00:17:49.759
No.

00:17:49.839 --> 00:17:50.640
Would you give me TI

00:17:50.660 --> 00:17:51.642
allowance to renovate?

00:17:51.801 --> 00:17:52.122
No.

00:17:52.542 --> 00:17:53.624
Can you give me some free rent?

00:17:53.784 --> 00:17:53.983
No.

00:17:54.865 --> 00:17:55.224
Eventually,

00:17:55.244 --> 00:17:56.006
they might give them some

00:17:56.046 --> 00:17:58.548
little carrot to get them

00:17:58.587 --> 00:17:59.948
just to do the deal and go away.

00:17:59.988 --> 00:18:01.730
But the landlord knows at

00:18:01.769 --> 00:18:03.171
that point that person

00:18:03.211 --> 00:18:04.451
doesn't have a viable

00:18:04.611 --> 00:18:06.031
opportunity to move in time.

00:18:06.071 --> 00:18:08.733
And so the timing is really important.

00:18:08.894 --> 00:18:10.454
Ten to twelve months in advance.

00:18:10.515 --> 00:18:12.296
Ten months should be the minimum.

00:18:12.336 --> 00:18:13.037
Twelve is ideal.

00:18:13.076 --> 00:18:14.698
Fourteen, fifteen, sixteen months.

00:18:15.103 --> 00:18:15.844
Fantastic.

00:18:16.223 --> 00:18:17.065
You don't want to start at

00:18:17.105 --> 00:18:17.885
three years in advance

00:18:17.905 --> 00:18:18.846
because there's no option

00:18:18.886 --> 00:18:19.846
for you to get out of your lease.

00:18:19.968 --> 00:18:20.847
You're just wasting time

00:18:20.867 --> 00:18:22.088
because what's available

00:18:22.130 --> 00:18:22.890
three years from your lease

00:18:22.910 --> 00:18:23.851
expiring is not going to be

00:18:23.871 --> 00:18:25.112
available twelve months.

00:18:25.452 --> 00:18:26.513
But twelve months gives you

00:18:26.574 --> 00:18:28.915
time to go to market, look at options,

00:18:29.336 --> 00:18:31.157
negotiate multiple properties,

00:18:32.199 --> 00:18:33.380
select the best option,

00:18:33.400 --> 00:18:34.181
decide to move forward.

00:18:34.201 --> 00:18:35.642
And then if you are relocating,

00:18:36.021 --> 00:18:37.763
it gives you the time to design it.

00:18:38.625 --> 00:18:40.247
Get construction documents, get a permit,

00:18:40.326 --> 00:18:42.888
build it out, equip it, move in,

00:18:42.929 --> 00:18:43.848
work the kinks out,

00:18:44.369 --> 00:18:45.891
get the IT and all the wiring done.

00:18:46.351 --> 00:18:47.372
And then you open the door

00:18:47.412 --> 00:18:48.272
to see patients again.

00:18:48.292 --> 00:18:49.574
But if you don't have at least ten,

00:18:49.614 --> 00:18:51.674
twelve months, you can get it done.

00:18:51.714 --> 00:18:53.277
But you're going to be on a

00:18:53.317 --> 00:18:54.396
more rapid time frame than

00:18:54.416 --> 00:18:55.298
you'd like to be.

00:18:55.417 --> 00:18:55.698
Yeah.

00:18:55.739 --> 00:18:56.558
Want to buy some time.

00:18:56.578 --> 00:18:56.838
All right.

00:18:56.858 --> 00:18:58.800
So my rudimentary knowledge

00:18:58.840 --> 00:18:59.461
of real estate.

00:18:59.500 --> 00:18:59.741
Right.

00:18:59.761 --> 00:19:01.222
The first three rules are location,

00:19:01.262 --> 00:19:02.463
location, location.

00:19:02.483 --> 00:19:02.703
Right.

00:19:03.144 --> 00:19:04.684
But in healthcare real estate,

00:19:04.704 --> 00:19:05.785
are there myths around

00:19:06.566 --> 00:19:07.665
things like visibility?

00:19:07.685 --> 00:19:09.166
You mentioned make a right, make a left.

00:19:09.227 --> 00:19:10.407
It's behind the warehouse or

00:19:10.488 --> 00:19:11.488
square footage.

00:19:11.508 --> 00:19:13.189
Are there myths around those

00:19:13.249 --> 00:19:15.029
things that we take too

00:19:15.049 --> 00:19:16.790
much to heart and that hurts us?

00:19:16.830 --> 00:19:18.211
Things that maybe are

00:19:18.271 --> 00:19:19.551
repeated because they sound

00:19:19.592 --> 00:19:20.633
good that actually aren't true?

00:19:21.403 --> 00:19:22.103
Yeah, no, I mean,

00:19:22.443 --> 00:19:24.285
location is exceptionally important.

00:19:24.325 --> 00:19:26.205
I mean, the quality of your location,

00:19:26.226 --> 00:19:27.486
the accessibility of it,

00:19:27.586 --> 00:19:29.528
if it has visibility, that's great.

00:19:29.567 --> 00:19:30.508
But you can find all those

00:19:30.528 --> 00:19:31.828
things that not have parking.

00:19:32.048 --> 00:19:33.569
Like, I can give you an example.

00:19:33.609 --> 00:19:34.690
I'm in Denver, Colorado.

00:19:35.310 --> 00:19:36.211
And like, you know,

00:19:36.250 --> 00:19:38.873
we had this retail center, where this,

00:19:39.053 --> 00:19:39.692
this, you know,

00:19:39.732 --> 00:19:40.894
healthcare provider went in,

00:19:41.233 --> 00:19:42.194
and then this brand new

00:19:42.255 --> 00:19:44.415
restaurant concept came in, which I said,

00:19:44.455 --> 00:19:45.395
everyone would know what it is.

00:19:45.997 --> 00:19:46.217
And

00:19:47.125 --> 00:19:47.967
If you're there at eight or

00:19:48.007 --> 00:19:49.287
nine in the morning, no problem.

00:19:49.326 --> 00:19:50.807
But when it hits eleven o'clock,

00:19:51.229 --> 00:19:52.429
this restaurant literally

00:19:52.489 --> 00:19:53.670
there's you cannot park.

00:19:53.710 --> 00:19:55.230
There's not a single parking space.

00:19:55.830 --> 00:19:57.531
And then if you get there on four or five,

00:19:57.571 --> 00:19:58.313
it's the same thing.

00:19:58.333 --> 00:19:59.834
And so, you know,

00:19:59.913 --> 00:20:01.914
it's a combination of the location.

00:20:02.715 --> 00:20:04.737
If you can get accessibility or sorry,

00:20:04.797 --> 00:20:06.038
visibility, that's great.

00:20:06.077 --> 00:20:07.578
Sometimes it doesn't make sense.

00:20:07.598 --> 00:20:08.578
Sometimes an office building

00:20:08.598 --> 00:20:09.819
makes more sense than retail.

00:20:10.450 --> 00:20:10.549
Um,

00:20:10.630 --> 00:20:13.030
parking obviously is a big factor and

00:20:13.070 --> 00:20:14.490
then you have other concepts though.

00:20:14.530 --> 00:20:15.632
Like what's the leash rate.

00:20:16.051 --> 00:20:16.832
And then you've got to go

00:20:16.872 --> 00:20:17.672
deeper from there.

00:20:17.832 --> 00:20:18.553
How much money is the

00:20:18.593 --> 00:20:19.393
landlord giving you to

00:20:19.432 --> 00:20:20.333
build out the space?

00:20:20.873 --> 00:20:22.173
Like how much free rent are

00:20:22.193 --> 00:20:22.614
they giving you?

00:20:22.894 --> 00:20:23.413
Cause you can have a

00:20:23.453 --> 00:20:24.374
scenario where one

00:20:24.394 --> 00:20:25.615
landlord's charging you a

00:20:25.674 --> 00:20:26.654
higher leash rate,

00:20:27.055 --> 00:20:27.795
but what if they gave you

00:20:27.835 --> 00:20:28.615
enough money to pay for

00:20:28.635 --> 00:20:29.496
your entire build out?

00:20:29.884 --> 00:20:30.703
And so, you know,

00:20:30.723 --> 00:20:32.044
you look at one landlord's

00:20:32.084 --> 00:20:33.565
at twenty dollars a square foot.

00:20:33.924 --> 00:20:34.984
One guy's at twenty five

00:20:35.025 --> 00:20:35.944
dollars a square foot.

00:20:36.285 --> 00:20:37.204
But the one at twenty five a

00:20:37.244 --> 00:20:37.865
square foot is going to

00:20:37.885 --> 00:20:39.246
give you seventy five

00:20:39.286 --> 00:20:40.006
dollars a square foot to

00:20:40.026 --> 00:20:40.986
build out your space.

00:20:41.546 --> 00:20:43.227
If you run the math on not

00:20:43.267 --> 00:20:44.926
borrowing seventy five dollars a foot,

00:20:44.987 --> 00:20:45.707
paying seven or eight

00:20:45.727 --> 00:20:46.906
percent interest over ten

00:20:46.946 --> 00:20:49.448
years and then factor in free rent,

00:20:49.807 --> 00:20:51.968
you'd be better off to pay

00:20:51.988 --> 00:20:52.868
a higher lease rate,

00:20:52.949 --> 00:20:53.808
not borrow that money.

00:20:53.828 --> 00:20:54.169
And so, you know,

00:20:54.969 --> 00:20:56.209
the economics always come

00:20:56.229 --> 00:20:57.890
into play no matter what you're doing.

00:20:58.069 --> 00:20:59.670
You know, what's the total cost per month?

00:21:00.273 --> 00:21:01.695
my lease and then any money

00:21:01.756 --> 00:21:02.916
I have to borrow to get the

00:21:02.957 --> 00:21:04.679
space built out how do you

00:21:04.699 --> 00:21:05.720
factor in free rent you get

00:21:05.839 --> 00:21:06.641
one land that gives you

00:21:06.681 --> 00:21:07.682
four or five months of free

00:21:07.721 --> 00:21:09.462
rent to start a new deal I

00:21:09.482 --> 00:21:10.483
mean that could shave off

00:21:10.545 --> 00:21:11.526
you know a dollar two or

00:21:11.546 --> 00:21:12.586
three dollars a foot on the

00:21:12.626 --> 00:21:13.688
lease rate if you factored

00:21:13.748 --> 00:21:15.690
over you know five seven ten years so

00:21:16.561 --> 00:21:17.643
Location's important.

00:21:18.942 --> 00:21:20.663
Visibility, signage, if you can get it,

00:21:20.703 --> 00:21:21.023
great.

00:21:21.604 --> 00:21:23.005
Sometimes office makes more sense.

00:21:23.025 --> 00:21:25.066
Sometimes the cost savings

00:21:25.105 --> 00:21:26.626
is worth not having a sign,

00:21:26.967 --> 00:21:27.586
especially if you've got a

00:21:27.606 --> 00:21:28.788
really established practice

00:21:28.807 --> 00:21:30.469
with really good referral patterns.

00:21:31.009 --> 00:21:32.930
And then the economics.

00:21:33.009 --> 00:21:35.111
And again, that's why.

00:21:36.194 --> 00:21:37.174
Somebody might hear this say, well,

00:21:37.194 --> 00:21:38.096
that's overwhelming.

00:21:38.375 --> 00:21:39.395
It's not overwhelming when

00:21:39.415 --> 00:21:40.797
you take it step by step

00:21:41.196 --> 00:21:42.258
and you have an advisor,

00:21:42.617 --> 00:21:43.458
but that's why you can't

00:21:43.478 --> 00:21:44.659
just pick a property and

00:21:44.679 --> 00:21:45.699
then hope it works.

00:21:46.138 --> 00:21:48.599
You've got to take property one, two,

00:21:48.920 --> 00:21:49.861
three, and four,

00:21:50.740 --> 00:21:52.781
go three or four rounds of negotiations.

00:21:53.201 --> 00:21:54.182
And then when you're looking at it,

00:21:54.202 --> 00:21:54.863
you can say, look,

00:21:55.599 --> 00:21:56.340
this property is going to

00:21:56.381 --> 00:21:58.122
cost me a thousand dollars a month more,

00:21:58.362 --> 00:21:59.262
but it's worth it to me

00:21:59.282 --> 00:22:00.124
because it's a way better

00:22:00.144 --> 00:22:02.986
location and the free rent's fantastic.

00:22:03.066 --> 00:22:05.327
And I like this or that, or you say, look,

00:22:05.367 --> 00:22:06.569
this is not worth paying an

00:22:06.630 --> 00:22:07.810
extra two thousand a month.

00:22:08.451 --> 00:22:09.991
I'd rather go to the office space.

00:22:10.472 --> 00:22:11.453
I can use that money for

00:22:11.513 --> 00:22:12.354
targeted marketing.

00:22:12.375 --> 00:22:13.075
I don't even probably need

00:22:13.095 --> 00:22:14.016
that because my practice is

00:22:14.056 --> 00:22:16.577
thriving and I'd rather save, you know,

00:22:16.617 --> 00:22:17.098
twenty five,

00:22:17.138 --> 00:22:18.420
thirty grand a year in rents

00:22:18.839 --> 00:22:19.540
and either put it in my

00:22:19.601 --> 00:22:21.021
pocket or invest it somewhere else.

00:22:21.061 --> 00:22:22.083
And it's not worth getting

00:22:22.123 --> 00:22:23.324
assigned for thirty thousand a year.

00:22:23.819 --> 00:22:25.221
Yeah, a lot of factors.

00:22:25.260 --> 00:22:27.082
Compare apples to apples and make sure you,

00:22:27.142 --> 00:22:27.801
I mean, again,

00:22:27.862 --> 00:22:28.883
I think that time element

00:22:28.903 --> 00:22:30.983
you're saying is if you're rushed,

00:22:31.003 --> 00:22:32.884
you can't make those

00:22:33.365 --> 00:22:34.664
decisions properly because

00:22:34.684 --> 00:22:35.486
you're not able to invest

00:22:35.526 --> 00:22:36.465
the time while you're

00:22:36.486 --> 00:22:37.267
running your business.

00:22:37.967 --> 00:22:38.086
Colin,

00:22:38.106 --> 00:22:39.107
we're going to play a game called

00:22:39.147 --> 00:22:40.528
Deal or No Deal, clinical edition.

00:22:40.548 --> 00:22:41.068
Are you ready for this?

00:22:41.108 --> 00:22:42.489
Let's do it.

00:22:51.501 --> 00:22:51.721
All right.

00:22:51.741 --> 00:22:52.382
I hit the button twice.

00:22:53.282 --> 00:22:55.722
So I'm going to give you a scenario.

00:22:55.762 --> 00:22:56.644
You give me deal,

00:22:56.663 --> 00:22:59.163
which is like a green flag or no deal,

00:22:59.384 --> 00:22:59.924
red flag.

00:22:59.944 --> 00:23:00.464
And then you can give a

00:23:00.505 --> 00:23:01.644
little one sentence or you

00:23:01.664 --> 00:23:03.465
can go deep into why.

00:23:03.506 --> 00:23:05.046
First segment on deal or no

00:23:05.086 --> 00:23:06.787
deal clinical edition with Colin Carr.

00:23:07.166 --> 00:23:08.366
My landlord says I don't

00:23:08.406 --> 00:23:09.366
need representation.

00:23:09.406 --> 00:23:11.028
They'll just handle everything for me.

00:23:11.147 --> 00:23:11.288
I mean,

00:23:11.627 --> 00:23:12.948
you already tipped your hand on this.

00:23:12.968 --> 00:23:14.088
No deal.

00:23:14.148 --> 00:23:14.669
No deal.

00:23:15.410 --> 00:23:15.650
Yeah.

00:23:15.809 --> 00:23:16.029
I mean,

00:23:16.310 --> 00:23:18.111
that person is the person you're

00:23:18.171 --> 00:23:19.051
negotiating against.

00:23:19.172 --> 00:23:20.093
They're not going to

00:23:20.133 --> 00:23:21.712
negotiate in your best interest.

00:23:21.953 --> 00:23:22.814
Yeah.

00:23:22.854 --> 00:23:24.154
The reciprocal statement to

00:23:24.174 --> 00:23:25.134
the landlord would be great.

00:23:25.394 --> 00:23:26.135
Then you don't go to the

00:23:26.175 --> 00:23:27.496
doctor or health care provider ever.

00:23:27.516 --> 00:23:28.356
You just do it yourself

00:23:28.376 --> 00:23:28.936
because that's what you're

00:23:29.017 --> 00:23:30.077
asking me to do.

00:23:30.968 --> 00:23:31.989
If a health care provider

00:23:32.028 --> 00:23:33.951
told a landlord never go to the doctor,

00:23:33.971 --> 00:23:35.172
you can just do it yourself.

00:23:36.192 --> 00:23:37.594
The landlord say that's foolish.

00:23:37.673 --> 00:23:38.595
I'm not a doctor.

00:23:38.894 --> 00:23:40.676
Then you'd say this is foolish, too.

00:23:40.737 --> 00:23:42.117
I'm not a real estate specialist.

00:23:42.137 --> 00:23:42.238
Yeah.

00:23:43.318 --> 00:23:44.921
My lease auto renews, Colin,

00:23:44.980 --> 00:23:46.382
and I forgot to negotiate it.

00:23:48.016 --> 00:23:49.696
That's a bad place to be.

00:23:49.757 --> 00:23:50.936
A lot of leases do auto

00:23:50.957 --> 00:23:53.958
renew or you miss the

00:23:54.077 --> 00:23:54.878
option to renew and they

00:23:55.618 --> 00:23:56.659
kick you out or they charge

00:23:56.699 --> 00:23:58.039
a good twenty five percent premium.

00:23:58.400 --> 00:23:59.780
So there's a couple of

00:23:59.820 --> 00:24:01.661
things you cannot miss and

00:24:01.681 --> 00:24:03.162
you cannot miss lease

00:24:03.321 --> 00:24:05.462
expiration deadlines and

00:24:05.522 --> 00:24:06.923
time frames that you need

00:24:06.962 --> 00:24:08.483
to exercise options to

00:24:08.523 --> 00:24:10.105
renew or exercise options

00:24:10.125 --> 00:24:11.125
to negotiate a renewal.

00:24:11.144 --> 00:24:12.525
Yeah.

00:24:12.545 --> 00:24:13.705
There's no free rent or

00:24:13.746 --> 00:24:15.287
build out allowance in the offer,

00:24:15.326 --> 00:24:16.267
but the rent is low.

00:24:18.143 --> 00:24:18.723
Bad deal.

00:24:19.683 --> 00:24:20.104
No deal.

00:24:21.144 --> 00:24:22.865
There is a lease rate that

00:24:22.925 --> 00:24:23.846
landlords will typically

00:24:23.925 --> 00:24:25.646
not go below because when

00:24:25.707 --> 00:24:28.127
you lower the lease rate on

00:24:28.189 --> 00:24:29.409
a space or a property,

00:24:29.769 --> 00:24:31.170
it devalues the property.

00:24:32.371 --> 00:24:34.311
Investment properties sell

00:24:34.392 --> 00:24:36.653
or trade on a multiplier or

00:24:36.712 --> 00:24:37.653
multiple of rent.

00:24:37.692 --> 00:24:38.653
It's called a cap rate.

00:24:39.074 --> 00:24:39.493
And so,

00:24:39.954 --> 00:24:41.214
and so people sometimes will see a

00:24:41.255 --> 00:24:43.296
space that vacant for like, you know,

00:24:43.375 --> 00:24:44.317
a period of time, I'll say, well,

00:24:44.336 --> 00:24:45.076
this has been vacant.

00:24:45.116 --> 00:24:45.797
So the landlord should be

00:24:45.876 --> 00:24:47.958
motivated to do an aggressive deal.

00:24:48.378 --> 00:24:50.259
No, because the second they do a lower,

00:24:50.400 --> 00:24:51.380
a lower lease rate than the

00:24:51.440 --> 00:24:52.500
property should have,

00:24:52.820 --> 00:24:54.181
it just devalued the property.

00:24:54.541 --> 00:24:55.342
And especially if you have

00:24:55.402 --> 00:24:57.202
multiple tenants there, you know,

00:24:57.702 --> 00:24:58.604
A lot of landlords,

00:24:58.663 --> 00:25:00.184
if they got ten tenants in the building,

00:25:00.325 --> 00:25:01.205
one space vacant,

00:25:01.486 --> 00:25:02.967
they'll sit on a vacancy for two,

00:25:02.987 --> 00:25:03.507
three years.

00:25:03.528 --> 00:25:03.968
And people are like,

00:25:03.988 --> 00:25:04.929
why are they doing this?

00:25:05.348 --> 00:25:06.630
It's because they don't want

00:25:06.650 --> 00:25:07.750
to devalue the property.

00:25:07.891 --> 00:25:09.291
If you take that last lease

00:25:09.352 --> 00:25:10.792
rate and the last deal and

00:25:10.813 --> 00:25:11.773
you lower the lease rate

00:25:12.413 --> 00:25:13.954
and you want to go sell that property,

00:25:14.194 --> 00:25:15.115
whether you want to or

00:25:15.155 --> 00:25:16.017
maybe you're forced to if

00:25:16.037 --> 00:25:17.096
you have to as a landlord

00:25:17.116 --> 00:25:17.698
for some reason.

00:25:18.327 --> 00:25:19.807
anyone who looks at it is going to say,

00:25:19.907 --> 00:25:21.469
well, the property is really worth this.

00:25:21.568 --> 00:25:23.269
Even though you have nine leases higher,

00:25:23.648 --> 00:25:24.730
it's not worth that because

00:25:24.789 --> 00:25:25.829
you would not have done

00:25:25.869 --> 00:25:27.490
this tenth deal at that

00:25:27.549 --> 00:25:28.549
lease rate if it wasn't.

00:25:29.030 --> 00:25:30.830
And so it's really interesting.

00:25:31.230 --> 00:25:32.810
In the game of investment real estate,

00:25:33.692 --> 00:25:35.172
you do one bad deal,

00:25:35.231 --> 00:25:36.231
especially if it's recent.

00:25:36.271 --> 00:25:37.692
It's one thing it's four or five years ago,

00:25:37.732 --> 00:25:38.913
you just slam someone in

00:25:38.932 --> 00:25:39.853
there to get a deal done.

00:25:39.873 --> 00:25:41.534
You can maybe talk your way

00:25:41.554 --> 00:25:43.074
out of that scenario as a seller.

00:25:43.453 --> 00:25:44.054
But if you're doing

00:25:44.094 --> 00:25:45.434
investment real estate and

00:25:45.454 --> 00:25:47.194
you just made a deal at, let's say,

00:25:47.796 --> 00:25:48.676
twenty dollars a foot and

00:25:48.696 --> 00:25:50.178
everyone else paying twenty five a foot.

00:25:50.657 --> 00:25:51.538
Anyone who looks that's

00:25:51.558 --> 00:25:52.339
going to say that's not

00:25:52.420 --> 00:25:53.381
market or you wouldn't have

00:25:53.421 --> 00:25:54.080
done that deal.

00:25:54.121 --> 00:25:56.442
And so landlords have a

00:25:56.502 --> 00:25:57.604
lease rate that they won't

00:25:57.644 --> 00:25:58.825
go below typically,

00:25:59.305 --> 00:26:01.287
but they will give you TI

00:26:01.326 --> 00:26:02.188
and free rent and other

00:26:02.228 --> 00:26:03.429
concessions even at that

00:26:03.469 --> 00:26:04.148
lowest lease rate.

00:26:04.209 --> 00:26:05.829
And that's that's a long answer.

00:26:05.871 --> 00:26:07.432
But a lot of people think, well,

00:26:07.471 --> 00:26:08.251
give me the best deal

00:26:08.291 --> 00:26:08.952
possible with no

00:26:08.992 --> 00:26:12.155
concessions that that does not exist.

00:26:12.215 --> 00:26:13.396
The best deal possible on a

00:26:13.436 --> 00:26:14.758
lease rate is still going

00:26:14.778 --> 00:26:16.318
to have concessions available.

00:26:16.788 --> 00:26:17.650
because they're going to

00:26:17.690 --> 00:26:19.211
have money set aside for

00:26:19.251 --> 00:26:20.934
those other benefits, commissions,

00:26:21.499 --> 00:26:23.359
free rent, build that allowance.

00:26:23.440 --> 00:26:24.240
The lease rate might not

00:26:24.259 --> 00:26:25.701
come below a certain number,

00:26:26.020 --> 00:26:26.921
but if you don't capture

00:26:26.941 --> 00:26:27.781
the other benefits,

00:26:27.882 --> 00:26:29.061
even with that lower lease rate,

00:26:29.461 --> 00:26:30.742
you lost probably tens to

00:26:30.762 --> 00:26:31.823
hundreds of thousands of dollars.

00:26:32.323 --> 00:26:32.542
Oof.

00:26:32.722 --> 00:26:32.983
All right.

00:26:33.003 --> 00:26:34.443
Last thing we do on the show, Colin,

00:26:34.503 --> 00:26:36.944
is called the parting shot.

00:26:37.105 --> 00:26:38.846
What's a bit of advice or a

00:26:38.905 --> 00:26:40.165
mantra that you would leave

00:26:40.185 --> 00:26:42.446
with clinicians who are listening,

00:26:42.586 --> 00:26:42.847
you know,

00:26:42.968 --> 00:26:43.988
twenty eight minutes into this

00:26:44.048 --> 00:26:45.048
episode and saying, OK,

00:26:45.087 --> 00:26:46.489
there's a lot more than I need to know.

00:26:46.528 --> 00:26:47.368
What's what's something you

00:26:47.388 --> 00:26:48.789
want to just burn into their psyche?

00:26:49.348 --> 00:26:49.528
Yeah.

00:26:49.548 --> 00:26:52.151
Let an expert, uh, do the process for you.

00:26:52.191 --> 00:26:53.131
Hold your hand for you.

00:26:53.151 --> 00:26:54.771
Like you'll cooperate.

00:26:54.832 --> 00:26:56.353
You are the ultimate decision maker.

00:26:56.692 --> 00:26:57.933
It's very similar to healthcare.

00:26:58.453 --> 00:26:59.835
No one's going to strap you

00:26:59.855 --> 00:27:01.236
to a table and force you to

00:27:01.276 --> 00:27:02.516
do a procedure or do

00:27:02.536 --> 00:27:03.457
something or take medicine.

00:27:03.497 --> 00:27:04.518
You don't want to take or do

00:27:04.557 --> 00:27:05.317
something you want to do.

00:27:05.718 --> 00:27:06.858
They're going to advise you.

00:27:06.878 --> 00:27:07.838
They're going to counsel you.

00:27:07.880 --> 00:27:08.500
They're going to give you

00:27:08.519 --> 00:27:09.480
the pros and cons.

00:27:09.941 --> 00:27:10.560
And at the end of the day,

00:27:10.621 --> 00:27:11.461
you're still fully in the

00:27:11.481 --> 00:27:12.521
driver's seat as the patient,

00:27:12.541 --> 00:27:13.343
but you've got someone

00:27:13.423 --> 00:27:14.603
helping you navigate the

00:27:14.643 --> 00:27:16.243
situation and trying to get

00:27:16.263 --> 00:27:17.484
you the best outcome possible.

00:27:17.971 --> 00:27:19.573
Same thing is true with tax strategy.

00:27:19.593 --> 00:27:21.973
There's significant tax laws

00:27:22.315 --> 00:27:23.315
that are on the table right

00:27:23.355 --> 00:27:25.175
now in Congress.

00:27:25.615 --> 00:27:26.997
There's things that changed last year.

00:27:27.237 --> 00:27:28.458
You don't do your own taxes.

00:27:28.637 --> 00:27:31.319
You have a really good expert CPA.

00:27:31.880 --> 00:27:33.221
And the same thing is true for legal.

00:27:33.921 --> 00:27:34.821
You're not an attorney.

00:27:34.882 --> 00:27:36.303
You don't play games with contracts.

00:27:36.323 --> 00:27:37.482
You have a really good attorney.

00:27:37.542 --> 00:27:39.604
So it's really simple.

00:27:40.025 --> 00:27:42.086
Again, pick your sports analogy.

00:27:42.810 --> 00:27:43.590
You're going to have a pitcher.

00:27:43.612 --> 00:27:44.392
You're going to have a catcher.

00:27:44.412 --> 00:27:45.732
You're going to have a first baseman.

00:27:45.772 --> 00:27:46.272
You're going to have

00:27:46.353 --> 00:27:47.693
different people on your team.

00:27:47.713 --> 00:27:49.394
They each have a unique skill set.

00:27:49.815 --> 00:27:50.894
But trying to make your

00:27:51.435 --> 00:27:52.516
catcher or your pitcher

00:27:52.576 --> 00:27:53.696
doesn't work very well.

00:27:54.196 --> 00:27:55.218
And trying to be the guy

00:27:55.238 --> 00:27:56.417
that does it all himself or

00:27:56.458 --> 00:27:58.398
herself is a really bad game plan.

00:27:58.499 --> 00:27:59.440
Going to get in trouble.

00:27:59.460 --> 00:28:00.681
All right, hire a professional.

00:28:01.080 --> 00:28:03.761
And we'll make sure they can

00:28:03.801 --> 00:28:04.643
reach out in the show notes.

00:28:04.682 --> 00:28:05.522
But where should they go to

00:28:05.863 --> 00:28:06.963
get in touch with you if they're like,

00:28:06.983 --> 00:28:07.163
all right,

00:28:07.183 --> 00:28:08.003
this Colin guy sounds like he

00:28:08.023 --> 00:28:08.884
knows what he's talking about?

00:28:09.508 --> 00:28:11.868
Yeah, our website is car.us.

00:28:12.028 --> 00:28:13.729
So car.us.

00:28:14.568 --> 00:28:15.670
We are a national firm.

00:28:15.730 --> 00:28:17.029
We're the actually only firm

00:28:17.289 --> 00:28:18.410
that's truly national that

00:28:18.430 --> 00:28:19.750
does healthcare tenant by rep.

00:28:20.171 --> 00:28:21.730
We're licensed in all fifty states.

00:28:22.852 --> 00:28:24.432
We're helping over fifty

00:28:24.451 --> 00:28:25.311
five hundred health care

00:28:25.332 --> 00:28:26.952
providers with their real

00:28:26.972 --> 00:28:28.492
estate right now as we speak.

00:28:28.532 --> 00:28:30.113
So we're not the only

00:28:30.153 --> 00:28:31.213
company that does this.

00:28:31.773 --> 00:28:33.013
We do believe that we do an

00:28:33.094 --> 00:28:34.755
excellent job and we've been doing it for

00:28:36.852 --> 00:28:37.853
Sixteen and a half years now,

00:28:37.913 --> 00:28:40.753
so we've got some time under our belt,

00:28:40.794 --> 00:28:42.035
but that's a great way to start.

00:28:42.075 --> 00:28:44.996
And I think that people

00:28:45.635 --> 00:28:46.676
getting representation,

00:28:46.717 --> 00:28:47.758
starting the process,

00:28:48.238 --> 00:28:49.478
reaching out to find an agent,

00:28:49.498 --> 00:28:50.858
having an initial conversation,

00:28:51.659 --> 00:28:52.660
you'll be glad that you

00:28:52.680 --> 00:28:53.420
didn't go it alone.

00:28:53.941 --> 00:28:54.361
Colin Carr,

00:28:54.381 --> 00:28:55.721
appreciate you stopping by the show again,

00:28:55.761 --> 00:28:55.942
Colin.

00:28:55.961 --> 00:28:57.102
Thanks for dropping some insight on us.

00:28:57.461 --> 00:28:57.863
Thanks, man.

00:28:57.883 --> 00:28:58.542
Appreciate you having me.