J Darrin Gross
I'd like to ask you. Josh Bauchner, what is the BIGGEST RISK?
Josh Bauchner
Well, the biggest risk here is getting sued by one of these serial plaintiffs, with one of these attorneys who's just in it for for the fees. To answer your question, I think ADA compliance planning, bringing in one of these testers, like we discussed, to assess the premises and make any determinations as to what's not compliant, then do an assessment as to what the cost would be to potentially bring it into compliance. Is it something that you could readily do, putting up the handlebars in the bathroom stall, for example, perhaps changing the front entrance door to provide handicap accessibility, or is it cost prohibitive? If the bathroom is downstairs and you can install an elevator, there's really no way around that to gain access. And then the challenge becomes with respect to shifting that burden, the landlords are doing that right. So in most lease agreements, most commercial lease agreements, the landlords are including an indemnification obligation where they're shifting the burden onto the tenant to both ensure compliance, remediate the premises in the absence of compliance, and if sued, pay for the landlord's fees and costs. It challenges again, the tenant doesn't necessarily recognize that obligation in Louise when they're signing on, and they certainly don't recognize what the costs that they're at risk of incurring are going to be if they are sued. And so unless they're a really big business, you know, $100,000 hit to your bottom line could put you out of business, and then again, it becomes the domino effect. Great. So now they are out of business. They've shut down. They've got six more years on their lease term. They vacated the premises. Now the landlord suing the tenant because they've reached the lease the landlord has to find the new tenant to mitigate it just creates a whole host of unintended consequences, all because, again, these serial filers think they're doing right,
Today, my guest is Jennifer Brener Seay. If you're a developer who wants your projects to become more than just buildings, today's episode is for you. Jennifer Brener Seay is the founder and CEO of Art Plus Artisans, who's rewriting the playbook on real estate development by transforming commercial real estate. And in just a minute, we're going to speak with Jennifer Brener Seay about the ROI of Art.
https://www.linkedin.com/in/jennifer-brener-seay/
J Darrin Gross
If you're willing, I'd like to ask you, Jennifer Brener Seay, What is the BIGGEST RISK?
Jennifer Brener Seay
So I'm going to give you two Darrin, one of the biggest risks, I think, is just having solid contracts, and the contracts are there to protect you from all different kinds of risks. So, you know, we're a small business. We've been in business for for 23 years. I think for a long time, I had a very simple contract that I don't think was probably protecting me from what could go wrong. And it was actually a real estate developer friend of mine, as we were going after and winning these bigger and bigger projects, you know, 15 floor ground up brand new builds, and we were going to be installing huge sculptures, he was like, You need a better contract. You need a better contract than this. So we really have worked to strengthen our contracts, to protect us, to protect the artists, to protect the clients, and in addition to that, or as a risk to the business and the economy, I, as a business owner, have never really focused on one vertical, because I got lucky in the 2008 recession that I had just taken on a big our first really big higher education project and our first Assisted Living Project, when kind of everything was hitting the fan at that time and corporate was falling apart. And it really showed me that in a business as niche as mine, I need to. To be diverse in the kinds of projects that we take on. So if one sector is having a hard time, we do not have all of our eggs in that basket. So we we work in in all areas of commercial real estate and with different kinds of companies and different industries to protect ourselves from things in the economy that I have no control over.
https://www.linkedin.com/in/jennifer-brener-seay/
Today, my guest is Blake Rogers. Blake Rogers is the co founder at Steel Peak Properties. Steel Peak is a Southern California based real estate investment firm focused on acquiring and improving industrial outdoor storage assets throughout the western US, and in just a minute, we're going to speak with Blake Rogers about outdoor storage properties.
https://steelpeakproperties.com/
J Darrin Gross
I'd like to ask you. Blake Rogers, What is the BIGGEST RISK?
Blake Rodgers
Sure. So I think in in our space, we say this all the time to to our investors, because they ask us this question as well, what? What's, what do you think the biggest risk is here, guys with this asset class? For us, it's really, since we're buying single tenant deals. I think it's the single tenant nature of these deals. We're buying vacant sites a lot of the time. So the risk for us is you either lease it or you don't, and you either do it in the amount of time that you said you would or you don't. So that, I think that for us is just being hyper focused on, you know, how long is it going to take us to do this. What are all the other, you know, properties in this market leasing for making sure we have all the data and that we're and we're underwriting the amount of time that we need to to lease these up, and that we're buying a product that these tenants want, and that's not going to sit there for a long time, because that's, that's the way that, the way that we can really get hurt, but we can control this risk, though, this isn't, you know, just like a macro risk. A lot of guys in our space got hurt pretty bad four or five years ago when interest rates went crazy during covid, and so that was a huge risk, and some of those guys just didn't foresee that coming. And so that's that's one thing, but for what we can control in buying these types of properties, it's really determining how long do we have to lease this and making sure that we we execute on that business plan.
https://steelpeakproperties.com/
Today, my guest is George Otel. George is the seasoned entrepreneur with over 10 years of experience in real estate and finance, and in just a minute, we're going to speak with George Otel about business finance.
https://www.linkedin.com/in/georgeotel/
J Darrin Gross
If you're willing, I'd like to ask you, George Otel, what is the BIGGEST RISK?
George Otel
The biggest risk when it comes to funding, is not looking for funding early enough, because the biggest risk is when people call me that they need funding yesterday. So it's I tell people you always have to look for funding, even if you don't need it, because when you need it, you may not find it where you may be. Tweaks. Expensive because of your situation. Let's say you got to look for funding when you're doing good, when you're doing great, because the lenders see less risk in you, because when, when you desperate, you you have a need your fire, fire you're burning, then that's a risk. So for the risk, they want to get more premium. So that's, that's how it works. The biggest risk is like, if, if you always got to look for funding, because it's you got to have funding options lined up, because you always growing. You're looking for equipment, you're looking for working capital, even lines of credit. We have lines of credit. So I tell people you rather have those lines of credit and not use it, then you need it and you don't have it, because that's that's another thing. So for example, there's a lot of loans do right right now for the there's a lot of balloons, though, and banks will like to when you approach them, like five, six months in advance to your balloon. You don't want to wait two months because it's too late. It's going to take two, three months to go to the process. So once the balloon is done, it's you're going to be in default. So it's because you got to refinance before that. So the biggest risk is not looking for funding early enough. And again, in good times, the banks, local banks, are really good. I love my local banks, but we are in uncertain times, a lot of volatility, and they don't like risk, so they avoid risk. Also private money lenders, they more risk. They have more appetite for the risk. And there is a small premium, and obviously it's worth it, because you'd rather pay a small premium and get your funding lined up, then have no funding option and be in a unpleasant situation. So also working with a funding finance broker like our company, because we have multiple options lined up. So basically, when the clients come to us in 1015, minutes conversation, initial conversation, we present them multiple funding option. We ask them about how they position their assets, the cash flow, how everything works. Then we present the Multiple option, because when you go to the bank, to to the local bank, they give you one option, and he said yes or no, but we have different options lined up. So if this one doesn't work, we're moving to the next and so on, until you get the funding and you getting the to the results you you need.
https://www.linkedin.com/in/georgeotel/
Today, my guest is Pete Neubig. Pete is the co founder and CEO of VPM solutions, and in just a minute, we're going to speak with Pete Neubig about the Benefits of Hiring a Remote Team.
J Darrin Gross
If you're willing, I'd like to ask you. Pete Neubig, what is the BIGGEST RISK?
Pete Neubig
So the biggest risk for VPM, well, I would say for us, the biggest risk is, at the end of the day, we're a payment processor, okay? You know, even though we have all these whistles and bells where you have this marketplace and you have these searches and you have this training, you have this video, if I can't pay people, I'm out of business. And so my biggest risk is that we are connected to stripe, and if stripe decides to cancel or go belly up. You know that I cannot process payroll. So to me, that's my biggest risk. So I do what I can to make sure that my relationship with stripe is good. And you know the challenge with having a payment processor, it's not normal to have two of them, and so we don't have to payment process. That's my biggest risk.