Commercial Property Investor Podcast Jerry Alexander

Do you already have some Residential and you’re on the fence? Is Commercial for you? Today we are going to discuss some key differences between Residential and Commercial property investing to help answer these two questions for you (and help you make a decision on your investing strategies).

It's important to know a Pension pot can make a serious difference to your Property strategies. 

If you have a residential property and you have a pension (SSAS or a SIP); investing in residential is problematic and difficult. However, commercial property can sit inside a SSAS Pension. I am not a pension expert, but I do know how to make a CMO work in conjunction with a SSAS

Some of the Key Differences at a glance; Commercial Vs. Residential


Commercial Investing; Differences getting into the deal; such as
Theres no additional Dwelling Supplement (ADS) with Commercial
Land & Buildings Tax does apply
VAT - it might be applied – but you could claim it back (including refurb).
Can be up to 75% Loan to Value (LTV)
The Valuations, Surveys and lawyers fees are generally more expensive. The contracts can also be more complex comparatively.

So what about the Finance?


LTV dependant on Vacant Possession Value (value of the bricks & Mortar) or Open Market Value (value of the income/quality of your tenant).
Experience is important to lenders too (they want to know you’ve got it!)
Less lenders in this sector
Some will lend when the Commercial property is within a mixed portfolio, but your residential lenders might not.
Return on Investment (ROI) and Cashflow can be much higher.

Strategies- Commercial is not a single strategyTheres lots of strategies in Commercial just like in Residential.


Buy to Let (B2L)Rent to Rent (R2R)Deal SourcingFlippingLease optionsSingle lets & Multi-letsHMO - CMOSA – Serviced offices


There are many different locational differences; and values that will change depending on which sector you’re in; what location you’re in and what strategy you’re in.

ValuationsOne of the key things is comparable properties to yours. This is to directly evidence the valuation given. In commercial, the comparable are there but they’re looking on the yields (What is the yield rate that the investors are expecting and paying for?), the covenants (quality of the tenant) & the length of the agreement (the security of the income).

Make sure to listen in to get an overview on all the differences as well as help develop your own knowledge and research further to make the right decision for you and your property investing. If you’d like to know more and delve deeper, make sure to join the CPI community and get engaging now

Key Moments


“Commercial is not a single strategy; So strategies could be things you’re very used to i.e. Buy 2 Let,Deal Sourcing, Flipping, Lease options, Single lets & Multi-lets, HMO - CMO & Serviced offices”
“There are many different locational differences; and values that will change depending on which sector you’re in; what location you’re in and what strategy you’re in.”
“…You do have a choice of being passive or active as an investor; and ongoing as potentially an operator”
“Most of the industry is geared up to people coming into the sector, to invest their money that they need somewhere else (rather than coming into commercial to try and develop equity & income and a living from commercial”
“If you can double the yield… then you might actually be able to double the price.”
“Why wait for the market to go up when you can force your own property value up (no matter what the market is doing”
“It’s a subtle difference”

JOIN THE NETWORKIf you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:CPI Website - https://commercialpropertyinvestor.co.uk/Our Sponsors - 

Today we are diving into what's absolutely crucial to overcoming challenges and getting more success in commercial property investing (or any industry for that matter!).

Maintaining a growth mindset is key for experts or beginners and this is best done through listening & learning yourself. It may seem strange as an expert as you're often seen as or treated like a leader or font of knowledge around your expertise; but there's still so much to learn.

Do you manage to maintain your mindset when things become difficult? Or does it go by the wayside? 

For instance, during tough times I have seen many investors get discouraged. Leading to a fixed mindset, where they cannot see out of the box (where they see their current difficulties are permanent and insurmountable. This mindset can stifle growth and innovation (it can be hard to come back)

How to avoid a Fixed - Mindset


Compartmentalising - this is where you treat things or process tasks and challenges separately. It is knowing when to park it to move on and deal with the next problem or task. The key is to recognise the things you can change or control to take pressure away from those that you have zero control or ability to affect in the immediate future. Along side this is the recognition of time; Rome was not built in a day and some things require time for others to act, processes to adhere to and stages to complete.
Networking - Putting yourself out there to meet and see others working (which is inspiring and counterbalances & can really make the difference).
Know when to Back Off (or when to push ahead). Its not an exact science. Its knowing when to go all in at the clutch, but equally when to step back and cruise to reserve energy.
Embrace Challenges - see them as opportunities (Check out last weeks episode for more on this!). A chance to learn, rather than an obstacle.
Acknowledge and learn from Criticism - use feedback as a tool for improvement.
Recognise efforts and perseverance as well as the wins

“ A growth mindset is the belief that abilities and intelligence can be developed; through dedication, hard work and continual learning" - Carol Dweck

KEY MOMENTS


"Mindset is simple; when you think or claim you know everything, your knowledge is limted to what you've achieved so far. thats it. finito!"
"When you're focused on learning more & more every day; your mindset is set on growth"
“This moment right there, is what I am talking about; The mountains have closed in, the weather’s taken a turn and the navigation system is failing.
“Some will give up, right here-and-now; most will push on. Some will then, when required, push on again. But even the strongest willed begin to have doubt…”
“Even the strongest willed begin to have doubts… survival becomes the key focus, and not growth.”
“A growth mindset fosters resilience, creativity and a willingness to take on challenges & to find out the best solution”
“Challenges are inevitable, of course; but how we respond to them can make all the difference”
“ I cannot overstate the power of focussing on one-to-one conversations with those around you (your mentors or mentees) as this is key to growth”
Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

We are talking all about Perspective today; “Every now and then we need to step back from the coal face and review.”

Whats working? what’s not producing the right results? Systems and processes are always vastly important but sometimes neither of these are helping you past a roadblock to help.

Are you making headway or are you stuck in a loop?

Commercial property ebbs and flows, often feeling in one moment like wading through treacle then immediately bombarded by everything all at once.

KEY TAKEAWAYS

Successful property investment is a mix of three key things


Access to funds - You need to access money to invest in property generally (either now, or later in some circumstances). Raising money could even be the key component you are missing. Access to money allows you to be agile and take opportunities as they arise. All is not lost if you don’t have enough money, however it will help in future when you’re prepared.
Knowledge & Experience - Experience helps remind you of when and what to action; where you’ve perhaps had a pitfall before, or prior successes, will always lay a foundation on how to proceed in the future. This brings with it the knowledge on what to do next and is fundamental in successful property investment. However without taking action, it will always be difficult to start to gain and learn both knowledge & Experience (regardless of how many courses or trainings you may have sat- its the action that provides that last lesson). You need to build up some knowledge, and in time as we go on we gain experience. We can use other peoples experiences, but you will always need to ‘take the wheel’ some time.
& Opportunity - Opportunities are often subject to both of the above (access to funds and Knowledge & experience). Additionally, one investors opportunity is another investors nightmare. People often bring to me information on potential properties for sale; perhaps they don’t have the knowledge or experience yet? An opportunity isn’t necessarily a ‘building for sale’; it’s a building for sale, with some upside. By looking for opportunities, you’ll also be adding to your knowledge & experience

All three of these mean nothing, if you’re not taking action. If you’re lacking in any three of these, networking will help you bridge the gap. A lot of people don’t have all three, and will often use networking with purpose, to produce positive results. "Networking with purpose, backed up with action, will produce positive results." JOIN THE NETWORK - https://commercialpropertyinvestor.co.uk/work-with-me/

As we get better & better, each of these three components rise and mesh together.

Key Moments


“Opportunity without access to funds, or experience, is not really a true opportunity is it? An opportunity with access to money, but no experience, could end in disaster. Rarely does anyone have all three.”
“Without access to money or opportunity, Knowledge and Experience is like a jam sandwich; without the bread.”
“We’ve all met the course junkies; been on many courses, spent lots of money, but took no action. “
“Finding buildings for sale is one thing; but finding opportunities is harder”
“If you’ve not prepared the ground work for investors, that opportunity may not wait”

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Commercial Property Investor, properties, investment, Domestic, finance, how to, networking
Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, offic

This time I'm talking to Alexandra Livesey from Clockwise, a company specialising in transforming historical buildings into flexible workspaces. Alexandra discusses Clockwise's rapid growth from 3 to 16 buildings (and counting) across four countries in just a few years. She emphasises the importance of understanding and respecting the local community and heritage of each building, and shares insights on incorporating hospitality experience into the real estate sector, the importance of transparency in business, and the utilisation of the metaverse for virtual meetings. 

KEY TAKEAWAYS


Clockwise focuses on creating flexible workspaces that honour the history and community of each building they operate in.
Clockwise's approach to building out spaces involves incorporating the local community's heritage and values, allowing for individuality and creativity among its members.
Clockwise leverages transparency, scenario planning, and a strong team to drive success in the flexible workspace industry.
The use of the Metaverse by Clockwise showcases innovation in connecting geographically dispersed members and enhancing emotional connections in virtual meetings.
Alexandra emphasises the importance of aligning personal brand values with business ventures to ensure long-term success and growth.

BEST MOMENTS

"I think every building has a purpose... So what works in Exeter doesn't work in Glasgow or in Antwerp or Brussels." 

"I think it will become more and more ingrained in what we do... this new generation is growing up intuitively using not only the real world, but also this virtual world." 

"You always need to know what's the worst case and how you're going to deal with it." 

"The thing about the metaverse is you actually have the ability to connect better because you're not only seeing the face... The exchange of and display of emotion in that environment seemed greater."

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/

Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/
Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

I look into the question of whether one should go full-time in property investment. I have seen this question a few times lately and it is not about "should i quit my job", but rather should I ever go full time in property even if I have the income to do so. Drawing from personal experience and observations, I talk about the different perspectives on this topic, emphasizing the importance of understanding one's goals and circumstances before making such a decision. I'll share my own journey of transitioning to full-time property investment, the potential challenges and benefits of doing so, and the considerations regarding income, experience, and opportunities in the property industry. 

KEY TAKEAWAYS


Going full-time in property should be a decision based on individual circumstances, including financial stability and long-term goals.
It is essential to have a clear understanding of one's financial situation and goals before transitioning to full-time property investment.
Balancing day-to-day income with long-term investment growth can be achieved through a dual strategy approach.
Seeking advice and gaining experience in the property industry is crucial, especially for individuals with significant income from other sources.
Collaboration and support from individuals with diverse backgrounds and experiences can be beneficial in navigating the commercial property investment landscape.

BEST MOMENTS

"I've come across one or two podcasts and commentators saying that you should not be full-time in property, ever. And it made me think..."

"Full-time is the end goal and the starting point all in one. They want to be free from a boss or another business with the annoying customers and challenges it brings."

"For a lot of people, getting started in residential, they're sold, this is the outcome you're after. Get yourself free."

"The big difference for me was that I could choose to work in the business rather than invest from the outside of the business."

"It's just really important to understand where you're at and where those gaps are and try and fill them."

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavors.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/

Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/
Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

This time, I share the top five business expenses of running a multilet commercial flexspace portfolio, incurred by our business over the past financial year. I'll provide you with a detailed breakdown of costs, including energy, staffing, interest payments, maintenance, and cleaning.

Through a comparison with the previous year, I highlight the significant increases in energy costs due to price increases and also touch on strategies for managing costs, projections for the upcoming year, and the impact of various factors on the business's financial performance. 

KEY TAKEAWAYS



The top five expenses for the business were energy, staffing, interest payments, maintenance, and cleaning.



Energy costs saw a significant increase from the previous year, with wood pellets and electric expenses notably higher.



Staffing costs remained relatively stable, while interest payments saw a substantial increase.



Maintenance costs included both regular maintenance and improvements to the properties.



Cleaning expenses are surprisingly high, with additional costs for waste management.



BEST MOMENTS

"Energy didn't used to be our most expensive part of our business, but it is now and has been last year."

"I can't believe how much money we spend on cleaning."

"Our turnover is increasing. It's not quite where we've projected, but hopefully we're going to get somewhere near that."

VALUABLE RESOURCES

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/

Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/
Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/