On a 300,000 sf plaza that might mean 150k square feet is vacant.
If asking rent is $8 per square foot per year, that means the building has a "potential revenue" figure of of $2.4MM.
The wealthiest person I know prints millions out of thin air in the real estate business.
This is what he does...
A thread.
On a 300,000 sf plaza that might mean 150k square feet is vacant.
If asking rent is $8 per square foot per year, that means the building has a "potential revenue" figure of of $2.4MM.
They basically pay all of the landlord's expenses (except debt service on any loans he/she has, of course).
The equation is:
net operating income / (cap rate) = value
The cap rate is a %.
Think about it as the return on your money, annually, as a percentage, you spent to buy a property.
An 8% return would mean an 8 cap.
But the bottom line is this:
Commercial real estate is valued based on how much money it makes (Net Operating Income)
He's looking at a distressed asset. Half vacant. So there is some upside potential. That potential is baked into the cap rate he can buy it at.
So he makes an offer to buy at an in-place 6 cap.
The NOI = 1.2MM
Cap rate is 6
A quiz -> what is the value?
So my friend gets the property under contract for $20MM.
And while its under contract, before he buys it, he pulls an ace out of his sleeve.
So he prepares his plans to sign long term leases with both of these businesses the day he closes on the property.
And now the retail center is 100% full.
Bringing in $2.4MM a year in NOI.
The upside is gone, so the cap rate will go up slightly, and my friend generally achieves an 8 cap valuation here.
So my friend just bought a building for $20MM, signed two leases, and now its worth $30MM.
So he created $10MM of value out of thin air.
And he does this to two or three retail plazas a year.
https://t.co/FEt1sBoSWS
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Facebook originally a CIA program called "LifeLog".
LifeLog, via DARPA, terminated on Feb 4th, 2004.
Facebook was launched on Feb 4th, 2004.
Many of the LifeLog team became execs at FB.
Zuckerberg is a figurehead.
CIA allowed Cambridge to help Trump win
https://t.co/enzOXDCogV
Pentagon Kills LifeLog
LifeLog, via DARPA, terminated on Feb 4th, 2004.
Facebook was launched on Feb 4th, 2004.
Many of the LifeLog team became execs at FB.
Zuckerberg is a figurehead.
CIA allowed Cambridge to help Trump win
https://t.co/enzOXDCogV
Project: Lifelog
— Robert Horan (@Robby12692) December 13, 2018
Started by DARPA in 1999, the goal of Lifelog was to create a database on civilians without their knowledge, and track everything they do.
The project "ended" on Feb 4th, 2004.
Facebook began the exact same day.
The CIA funneled tens of millions into Facebook. pic.twitter.com/r7hwF0v9kh
Pentagon Kills LifeLog
There are 100s of threads on building and running startups.
Here are 10 that are pure gold:
Fund-raising is hard for all of us.
@justinkan shares some unique insights on how to do it well.
We rarely hear honest reflections from founders on what they messed up.
@apartovi shares his reflections on a deal that went wrong with Steve Jobs.
Some gems in this thread by @agazdecki on a wide variety of founder
shares some solid principles learned from building a multi-billion dollar business.
Here are 10 that are pure gold:
Fund-raising is hard for all of us.
@justinkan shares some unique insights on how to do it well.
I've raised over $150,000,000 as a founder, simply by being a good storyteller.
— Justin Kan (@justinkan) October 20, 2021
Here's how to get VC's to throw money at you:
We rarely hear honest reflections from founders on what they messed up.
@apartovi shares his reflections on a deal that went wrong with Steve Jobs.
As the world celebrated Steve Jobs\u2019s life last week, I recalled a lesson he taught me. My one meeting with Steve didn\u2019t end well. It\u2019s one of my most painful memories, and a warning to startup CEOs about the danger of taking hype too far. Here\u2019s the story. (1/n)
— Ali Partovi (@apartovi) October 10, 2021
Some gems in this thread by @agazdecki on a wide variety of founder
Here's 20 of my top startup tweets... \U0001f9f5
— Andrew Gazdecki (@agazdecki) October 16, 2021
shares some solid principles learned from building a multi-billion dollar business.
Over the last 5 years, I built a $4B company.
— Ryan Breslow \U0001f57a (@ryantakesoff) September 20, 2021
Sounds awesome right?
Not until recently.
I made every mistake imaginable.
The toughest part was getting my head right.
Here are the 12 mindset rules that I\u2019ve developed.
