Commercial Real Estate Pro Network

Today, my guest is Frank Xia. Frank is an ex engineering director in tech startup where he specialized in pricing and decision making. He is passionate about AI and investing in real estate and alternative assets. And in just a minute, we're going to speak with Frank Xia about deal underwriting and raising capital for B and C Class multifamily deals in Dallas, Texas.

J Darrin Gross

I'd like to ask you, Frank Xia, what is the BIGGEST RISK?

Frank Xia

I think the biggest risk for me is, I think, interest rate right now, and how I choose to, I don't think I can transfer that. But I think I can minimize it number before for a few for a few strategy. Number one is I just invest less deals, because the less you invest, the less risk you expose, right. But if you don't invest anything, then you have no income. That's not an option. So you have to participate in debate, but you can participate very strategically. So that's number one. Number two is you can use a fixed rate mortgage to alleviate your risk, right. Instead of few years back, everybody is using floating interest rate with two years of recap. So we learned the lesson, we're going to be more conservative using a fixed rate mortgage. So that's number two. Number three is that we are looking for a cheaper price. We're giving us more buffer so that we can tolerate this kind of waste. So these are the three things we're going to be doing. But the biggest risk to us right now our interest rate.

Today, my guest is Michael Salafia. Michael is the Founder and Managing Partner of Stax real estate LLC, a platform for sale leaseback of single tenant Net Lease real retail assets, located in Miami Beach. And in just a minute, we're going to speak with Michael Salafia about the benefits of triple net sale lease backs for both investors and tenants.

J Darrin Gross

Michael Salafia, what is the BIGGEST RISK?

Michael Salafia

As an investment manager, it's the fluctuations in interest rates are our biggest risks that we are dealing with at the moment. That changes that become very, the changes of interest rates are somewhat predictable to a degree and we'd get communication from the Fed. Our challenge is the market reaction or slow reaction and and kind of gauging how slow the reaction is going to be to the shifts. So getting getting sellers to understand that, you know, interest rates are not at three and a quarter. They're now at seven and a quarter. So your five cap property that you think is worth a five cap is now worth an eight cap and getting them to swallow that pill. That's that's been the biggest challenge.

Today my guests are Mike Merrigan and Bo Kort. After being best friends for 25 years, Mike and Bo started doing business together in 2015. He started purchasing buildings together in Texas. This partnership captured or catapulted their success. Together, the duo has found multiple eight figure companies in Houston motorsports cord industries and Mojave storage. Since the partnership began, 2015, Mike and Bo have built their portfolio of 43 companies have over $150 million in commercial real estate. They're involved in 14 different industries, motor sports, industrial fabrication, special T services, construction and self storage to name a few. And in just a minute, we're going to speak with Mike and Bo about the Power of Partnership, how to scale a business in any industry.

J Darrin Gross

Mike Merrigan, and Bo Kort, what is the BIGGEST RISK?

Mike Merrigan:
I'll go first, if you're, because you're an insurance, one of the best feelings I've gotten, as far as an insurance thing, and looking at risk is once I had it explained to me, once I did get some assets, an umbrella policy gives me a lot of comfort, never had to use it. But I feel like it's a good investment. So if you're talking about literally insurance, I like the fact that I have an umbrella policy to protect things that I might not be thinking of. So I love having that. And I think it's a good value. And I'm glad to have it, and I don't think I'll ever not have it. On the other side of just generally speaking risk. One of the things that I learned, the biggest risk is not taking a risk, not taking the chance of buying real estate, I don't care, then buying an index fund, throwing your 10% every year, or every month, or whatever. But the biggest risk in life is don't take a risk. And guess where you're going to end up. If you can draw a picture, you're going to be just fine, you're going to be 30 pounds overweight, you're going to have a retirement that's going to be small, and you're going to just live this life, as opposed to take a few risks. Get a little older, take care of yourself, physically eat where you want, stay where you want, live, where you want, do what you want, it's a lot happier life, don't take a risk is the biggest risk and take in my opinion.

Bo Kort:

I agree completely. Gonna be hard to follow that one because I wanted to so Trump. I would say the other thing that I was thinking of is, is that in risk, and in real estate investing, is just staying disciplined and don't get emotional over things. And I think partnerships help in that, you know, like Mike talked about, he's good at one thing I'm good at another. Another thing that we lean on each other about a lot of times is we'll come up with a deal, and we'll have a feeling about it. We'll be in the office, and we'll spend hours just going over it and this and that. Okay, what do you guys want to do. And then one of us usually speaks up and goes to a call tomorrow. Tomorrow, nobody makes a decision that we're supposed to call him tonight. So call them back and let them know, we're not going to talk to him till tomorrow, you know, I mean, just let them know, something came up, whatever it is, and we sleep on it, we come back, and just make sure that we're not being emotional about the decisions that we're making. And because of being like that, and a lot of that is Mike's good about that to hold us all accountable for for things like that. But um, it has saved us tremendously on not making mistakes. And mistakes are good, and you learn from mistakes. And that's why you start small so that you don't have the type of mistakes that crumble you. But you educate yourself from those mistakes and it keeps you to be disciplined and not get too emotional about things. And your old self will be thanking your ass whenever you're whenever you got the money coming to you. Because you were disciplined, persistent

Today, my guest is Weina Zhang. Weina is the CEO and founder of the Z Life Company, a ground up developer builder based in Las Vegas. And in just a minute, we're going to speak with Weina Zhang, about Z Life and the use of their proprietary model to develop mid rise projects that are changing the path for young adults to enter the urban housing market.

J Darrin Gross

Weina Zhang, what is the BIGGEST RISK?

Weina Zhang

So the reason the we crave matrix system, like you said, was 20 years, his parents are from the line, we meet him lies, minimalize excuse the language. A lot of risk already. Right. But still our risk is. So like you said, the Fed. How can I give affordable housing for middle class? Right? The really the interest rate, right? So that's, that's I cannot control ever one problem I need to solve that. Right. So that's the that's really the biggest obstacle. The interest rate See, I solved the parking I solved the HOA, I solved the great location, beautiful glass condo, small, you know, not like super, like super 505,000 square foot. But there's a fed? Yes. That's the risk of I don't know if you call feather risk. Other than that, I think. Yeah, I don't think there's a lot of risk on me. Other developer? Probably, but not me.

Today, my guess is Sridhar Sannidhi. He is a 30 year it professional turned full time real estate professional. And it just a minute. We're going to speak with Sridhar about multifamily syndication and development.