BC ECONOMY
Saved by @SteveeRogerr

On Sep 3rd 2020 we closed on a 120k sf glove factory built in 1890 in a small NY town.

Has 45k sf of self storage inside and had $14k a month of net operating income at closing.

Let's breakdown this deal.

A THREAD on creating $2 million out of thin air in 18 months...

๐Ÿ‘‡๐Ÿ‘‡

 First saw the property on Loopnet in mid 2018. I ignored it. Who wants to try to operate a business in an old factory in a dying NY town.

A few months later I reached out. Broker sent me financials. They were good. $24k a month in revenue and $10k in expenses.
So I visited the property. It was old. Needed a new roof. Full time manager. Only accessible to customers 9am-5pm M-S. No autopay. A lot of folks paying 1/2 market rent.

I loved everything about it.
But I knew they were going to have trouble selling this thing no matter the profitability, so on July 1 2018 I made a low offer. $750k + seller pays for new $250k roof + $20k in environmental work.

Countered at asking price + $100k credit towards roof.

I ignored the response.
Broker called me back mid September of 2018. Make another offer, he urged.

I knew it was a good biz so I got more aggressive - $1MM + seller pays for roof / environmental.

Declined. Countered with $1.2MM but they'd give me a new roof and do the environmental.
The next day I offered them their price, but said they'd need to hold $300k of paper in the form of a second mortgage. 5% rate, 20 yr term.

They agreed and we signed a deal.

More on seller financing here:

https://t.co/qsEQRJ4E1l
I convinced my bank to loan me 67.5% LTV at 3.5% with 12 mo interest only.

They replaced roof. Did environmental. A few other things that came up in inspection.

It had $168k in NOI so appraisal came back at $1.85MM.

My bank: $950k
Sellers: $300k
Purchase price: $1.2MM
On closing day we remembered the property had a house on it. There is a tunnel right into the 2nd floor of the factory from the upstairs dormer. Needs $75k worth of work to be livable. Likely not worth it.
Changes we made right away:

New security system ($12k)
Automatic / wifi overhead doors ($5k)
12 hr / 7 day access
No office (keeping manager on team though)
Rent increase to get customers up to market rate
The manager who was working 50 hours a week from the office on site went remote (work from home nearby) on October 15th as soon as the automated doors and security system were finished.

She now answers phones and does admin for 3 other facilities in addition to this one.
Things have been going well to say the least.

In October we increased revenue from $24.8k in September to $30k. November and December were just shy of $30k as well.

Occupancy is up. Economic occupancy is WAY up.
And from an expense perspective we've leaned out and we took the expenses from $10k to $8.5k.

Marketing: $1k
Payroll (1/4 of manager pay): $1k
Utilities / Software / Mis: $1.25k
Snow removal / Lawn: $750
Supplies: $500
Maintenance: $1k
Management fee: 1.5k
Taxes / Ins: $1.5k
So now we have $30k in revenue and $8.5k in expenses for $21.5k in net operating income.

On an annualized basis thats $258k in net operating income.
Then what? Sell it? How much will someone pay for it?

Let me tell you why I don't care how much someone will pay.

If I sell it I'll have about $3.5MM in capital gains. 25% of that will go to uncle sam. And I'll be left trying to figure out what to do with the remaining 2.5MM.
And I don't need to sell it to realize 80% of that gain while keeping a money-making asset and not having to redeploy any capital or give a chunk to the government.

Here's how:
At the 18 month mark we plan to be around $40k a month in rev (after expansion) on $9k in exp for an NOI figure around $370k.

Then we'll go back to our bank and get the thing reappraised. We expect it to be valued at about $4.5MM.

The bank will lend 75% of that value to us.
As long as our monthly operating income covers the debt by 1.5x or more, we'll lever up, taking $3.375MM in new loans on the building.

After $1.25MM goes to clear seller financing and original loan, we'll have $2.125MM in cash go into our checking accounts.

And the best part...
We still own the building and its $150k a year in cashflow.
We paid no taxes.

In the sell scenario: We trade our building for $2.5MM cash.
In the ReFi scenario: We keep our building and get $2.125MM cash.

I'll take #2 all day. And thats our plan with every building we buy!
If you'd like to understand the dynamics of real estate deals like this and see more deal examples. Sign up for my email newsletter:

https://t.co/ofRGWDCaNx

More from Nick Huber

Nick Huber
Nick Huber
@sweatystartup
Think slow, work fast.

A thread on entrepreneurship and what folks don't understand about opportunity.

It comes in waves.

Long periods of time are spent blocking and tackling and going through the motions.

Short periods of time can change your life.

Don't get me wrong, successful folks are consistent. They show up. They stay focused for years.

But...

Ask them to point to a time period where they made most of their money and they'll direct you to a time span between 6 months and 2 years.

When the opportunity arose and they seized it.

They built something that continues to create value. They built an asset that continues to create cash.

They seized an opportunity and did work over a short period of time and they harvest the fruit for years or generations.
ENTREPRENEUR
Nick Huber
Nick Huber
@sweatystartup
Want to know how to get brokers to bring you deals first?

Want to build a machine that can buy real estate while you play golf?

Have a very professional and organized METHOD for closing on a property.

It's a system. And here's how we do it.

A thread ๐Ÿ‘‡๐Ÿ‘‡๐Ÿ‘‡

The thing is most sellers (that I deal with) have never sold a property before.

They don't know what to expect. They don't know how it works.

So they naturally have unreasonable expectations and there is a lot that can get lost in the shuffle.

And it creates stress.

And most brokers are working several deals at a time. And they aren't at liberty to tell a buyer how to do business.

So their hands are tied.

And for that reason a lot of closings are shit show. They are delayed. They end up with lawyers huddled up on Thursday night at 10pm.

And for that reason its YOUR JOB as the buyer to take charge.

Set the expectations.

Set the timeline.

And be a professional.

Step one:

Get a signed letter of intent that lays out the terms for your attorney to draft a contract with.

Step two (5 minutes after signed LOI)

Send out an email linking all of the parties and outline their role and a timeline.
BUSINESS
Advertisement
Nick Huber
Nick Huber
@sweatystartup
Too many folks set the bar way too high with entrepreneurship. The next million dollar company. The next sexy startup.

Forget all that.

Why isnโ€™t the goal to build something that pays you good $ every year and requires only a few hours of your time per week to make it happen?

When you start a business your goal shouldn't be to get an article in TechCrunch or raise VC $.

It should be to make $1,000 as quickly as possible with as little risk as possible.

Trade your time for money to test an idea.

Speaking of ideas.....

Business ideas are OVERRATED.

The only thing a brand new, world-changing idea will get you is an interesting Twitter bio and very shitty odds of success.

We only hear about the unicorns like Jobs and Musk.

The successful entrepreneurs in your town all have something in common...

They did common things uncommonly well.

They did something that someone else was already doing and they just did it a little bit better.

Young entrepreneurs hear the same advice over and over again...

Change the world. Do something you're passionate about. Thing BIGGER.

That advice is BULLSHIT.

Shoot for the stars and the odds you'll end up with a JOB.
ALL
Nick Huber
Nick Huber
@sweatystartup
I'm not gonna lie.

My success is 95% attributable to running with the right people and being in the right place at the right time.

The lucky part for me:

Itโ€™s a flywheel and itโ€™s all about momentum.

Iโ€™ve learned a lot from those folks. Iโ€™ve learned a lot about business and management and real estate.

My network is growing.

And Iโ€™ll continue to get even more opportunities and meet more people.

My advice:

Surround yourself with great people, add value to their lives so they keep you around, and focus on spotting opportunities.

Do the not fun, hard, sweaty work early so you can build up capital. Then work smart and keep the flywheel going.

And the thing you need to realize:

50% of people are negative, incompetent, mean and take more than they add.

Like crabs. They pull you back down into the bucket. Instead of lifting you up to help you win.

Cut the crabs (even the family crabs) out of your life.

The other 50% have an abundance mindset.

They donโ€™t complain or blame.

They believe you winning is good for them. So they want you to win and will do things to help you win because they know it comes back around.

These are the folks you need to find, help and spend time with.
LIFE LESSONS
Nick Huber
Nick Huber
@sweatystartup
There is a lot of bad advice floating around online when it comes to real estate investing.

Time for a stiff drink and some stuff you might not want to hear.

A thread ๐Ÿ‘‡

Most real estate influencers spend 99% of their time trying to sound smart.

They purposely make things too complicated.

When you do this for a while you can tell if a property is worth buying with a napkin and 30 seconds.

The problem with being a big real estate PE firm:

You need to do good deals year after year and deploy 10s or 100s of millions in capital.

Itโ€™s a hamster wheel making others wealthy.

The advantage of being you:

One building like this can change your life.


Buying real estate that doesnโ€™t cashflow well because values have risen 10% / yr for 10 yrs while wages have risen 3% / yr for 10 yrs is very risky.

I donโ€™t care how long your interest rate is โ€œfixedโ€ for.

Markets are cyclical. Trends change. Bankruptcy is real.

If you donโ€™t know anyone with money and you have less than $250k of your own cash real estate isnโ€™t the best way to make money.

Even a $500k property (like the one pictured above) requires $150k down and another $100k in cash reserves.
BUSINESS

More from Economy

Rohan Grey
Rohan Grey
@rohangrey
๐Ÿšจ๐Ÿšจ๐Ÿšจ ANNOUNCEMENT ๐Ÿšจ๐Ÿšจ๐Ÿšจ

@AyannaPressley Unveils Historic Federal Job Guarantee

The resolution draws on historical Civil Rights leaders like Coretta Scott King & economists like Sadie Alexander, & is supported by a wide coalition including @policylink, @NatlJobsForAll, @thepublicmoney, @SEIU, @sunrisemvmt, @CPDAction, @ACREcampaigns, @ourmoneyus, @NelpNews

โ€œItโ€™s time to establish a legal right to a job for all people in America. For years, we have legislated hate, harm & injustice ... Itโ€™s long past time to pursue bold, intentional policies that affirm equity & recognize the dignity & humanity of all people.โ€

"A federal job guarantee is an important investment in the American people, our communities, & an equitable economy that works for all. It affirms the right to meaningful, dignified work & a living wage."

"Iโ€™m proud to build upon & honor the legacy & work of generations of Black women Civil Rights leaders by introducing this historic resolution.โ€
ECONOMY
TraderLion
TraderLion
@TraderLion_
Why do we track institutional footprints? ๐Ÿ˜ (Thread)

Large institutions like mutual funds, hedge funds, banks, insurance companies, trusts, etc. amount for over 75% of all volume. These institutions move the market, not you and I.

It makes sense that if these guys are moving the markets, we would ideally want to buy the same stocks they are buying, but before they buy them? Right?

So, letโ€™s get a clear understanding of how and why this is so important and what this might look like behind the scenes.

For starters, letโ€™s discuss what we mean by a large institution. In this case, we are referring to the many funds, pensions, trusts, etc. that are responsible for managing tens, if not hundreds of billions of dollars.

Hence, they easily attract and can afford to retain the planetโ€™s top talent, not to mention, their research budgets are enormous.

They have access to information and resources that the retail crowd simply does not, and if they did, it would likely be extremely unaffordable.
ECONOMY , TRADERLION
Advertisement
hegelian vs predator \U0001f42c
hegelian vs predator ๐Ÿฌ...
@reachrachelkahn
๐Ÿšจ๐Ÿšจ THREAD TIME ๐Ÿšจ๐Ÿšจ

let's talk about the differences between income, wealth, and class

tl;dr: income is earned, wealth is bought, and class is inherited

also hi friends, while on the topic of income, this work is my only source of it! times are tough and folks are really struggling, but if you have a couple extra bucks please consider sending a tip my way

๐Ÿ’ฐ venmo rachel-kahn-5
๐Ÿ’ต cashapp

INCOME is the amount of money a person makes from labor and investments

so if you work for 2,000 hours and are paid $40,000 in a year, that's income

OR if you have a $1,000,000 stock portfolio with a 5% return rate and cash out $40,000 of it, that's income too (fucked, right?)

WEALTH is the amount of capital you own

that could be owning a house and land worth $150,000

or owning a small business with $150,000 in assets

or owning $150,000 worth of stocks

wealth is the investments that are themselves accruing value

CLASS is about what you stand to inherit

in the united states we use a lot of weird doublespeak to avoid talking about the proletariat, the petit bourgeoisie, and the bourgeoisie directly

proletariat ~ working class
petit bourgeoisie ~ middle class
bourgeoisie ~ upper class
ECONOMY
LearnLifeWealthTravel | Dream Big, Think Growth !!
LearnLifeWealthTravel ...
@AnyBodyCanFly
Thread - How to spot a potential multibagger

Multiple fundamental parameters however we cannot be rigid on any of these parameters.

Be flexible to interpret things from bigger picture point of view.

Input 1 ~ No doubt on business survival

Come whatever event (health crisis, economic bubbles, economic recessions, political events, etc.), there should not be any doubt on business survival.

Earlier it used to be only food companies into this category, but now there are many.

Input 2 ~ Visible & sustainable growth potential

At any point of time, we can think with a certain common sense approach that if management wants, there can be a sustainable growth at any point of time.

Obviously this growth may come thru innovation, optimization, etc.

Input 3 ~ Management has vision towards growth

Management should be forward looking, should be able to read into future to build right growth avenues, should be considerate towards every stakeholder.

In addition management should be ethical & should have good social image too.

Input 4 ~ Promoter stake

There should be a reasonable skin in the game from promoter.

If in case there is a low promoter stake, then promoter should increase stake at every possible opportunity.

Also pledging should either be zero or minimal.
ECONOMY
John B. Holbein
John B. Holbein
@JohnHolbein1
Does raising the minimum wage reduce the number of low-wage jobs?

No.

"We also find no evidence of disemployment when we consider higher levels of minimum wages."

https://t.co/vlgagEHeyy


Minimum wage increases reduce crime.

https://t.co/1G1clXqF9t


When you increase the minimum wage, you decrease infant mortality among poor families.

https://t.co/iwW1FDsLYG


Increasing the minimum wage improves kids' health.

https://t.co/66DLHERpOJ


The minimum wage reduces racial income inequality.

https://t.co/wkn9Ajotlx
ECONOMY

You May Also Like

Erik Torenberg
Erik Torenberg
@eriktorenberg
1/ Someone emailed me asking how to break into VC, so I wanted to answer on Twitter where others could see and contribute to the conversation.

2/ โ€œBeing a VCโ€ can mean a lot of different things, so itโ€™s worth asking:

What actual activities do you want to do?

- Deep market analysis?
- Be in the flow of information and people?
- Make deals?
- Work closely w/ founders over time (e.g take board seats?)
- Manage capital?

3/ Itโ€™s worth specifying what type of VC you might like to become โ€” as there are different archetypes. E.g.

- Benchmark (Lead series A/B - couple investments a year)
- First Round (Lead seed rounds, partner w/ a few companies a year)
- SV Angel (Make lots of seed investments)

4/ Continued:

Expa - Incubate companies

YC / Village Global - Build a platform to help entrepreneurs at scale

Do you want to join a firm or start one? Thereโ€™s a lot to consider.

Different paths will require different skillsets & sets of experiences.

5/ Since the person who wrote the email is a young person trying to break into VC by joining a firm (and who doesnโ€™t want to start a company), Iโ€™ll tailor this tweet storm to that goal. Thereโ€™s some overlap.
STARTUPS
KrishnaLeela
KrishnaLeela
@Talesofkrishna
๐ŸŒฟ๐‘ป๐’‰๐’† ๐’”๐’•๐’๐’“๐’š ๐’๐’‡ ๐’‚ ๐‘บ๐’•๐’‚๐’“ : ๐‘ซ๐’‰๐’“๐’–๐’—๐’‚ & ๐‘ฝ๐’Š๐’”๐’‰๐’๐’–

Once upon a time there was a Raja named Uttฤnapฤda born of Svayambhuva Manu,1st man on earth.He had 2 beautiful wives - Suniti & Suruchi & two sons were born of them Dhruva & Uttama respectively.
#talesofkrishna https://t.co/E85MTPkF9W


Now Suniti was the daughter of a tribal chief while Suruchi was the daughter of a rich king. Hence Suruchi was always favored the most by Raja while Suniti was ignored. But while Suniti was gentle & kind hearted by nature Suruchi was venomous inside.
#KrishnaLeela


The story is of a time when ideally the eldest son of the king becomes the heir to the throne. Hence the sinhasan of the Raja belonged to Dhruva.This is why Suruchi who was the 2nd wife nourished poison in her heart for Dhruva as she knew her son will never get the throne.


One day when Dhruva was just 5 years old he went on to sit on his father's lap. Suruchi, the jealous queen, got enraged and shoved him away from Raja as she never wanted Raja to shower Dhruva with his fatherly affection.


Dhruva protested questioning his step mother "why can't i sit on my own father's lap?" A furious Suruchi berated him saying "only God can allow him that privilege. Go ask him"
RELIGION
Advertisement
Dr Amanda Moehring
Dr Amanda Moehring
@FlyBehaviour
In Academia, people arenโ€™t always supported when they need it. I want to share what @WesternU did when my husband died right after the pandemic shutdown. It should be shared with other uniโ€™s as a model for empathy and proactive care when someone is in crisis.
1/
#AcademicChatter
SCIENCE
WORLD OF SANATAN DHARMA
WORLD OF SANATAN DHARM...
@world_sanatan
THE LAST STAND OF PAVAN KHIND - THE 300 BATTLE OF INDIA

A long๐Ÿงตthat u must read

In desperate times, great men come forth. Those men who are ready to sacrifice all of their lives work for a single cause.

Baji Prabhu Deshpande is one such man.

1/25


Battle was between the Maratha Warrior Baji Prabhu Deshpande and Sidi Masoud of Adil Shahi Sultanate.

In 1660, the Maratha King Shri Chhatrapati Shivaji was trapped in the fort of Panhala, under siege and vastly outnumbered by an Adilshahis army led by Sidi Masoud.

2/25

And while everyone is thinking that finally the Maratha king will be subdued, Shivaji planned to escape to the fort of Vishalgadh. It was administered by a Maratha chieftain named Range Narayan Orpe under Shivaji.

3/25

For months the siege warfare continued as Shivaji made sure that the food source of the Besieging army drops down, due to which they will initiate a general assault on the castle.

4/25

Shivaji, Baji Prabhu, and around 600 of their best troops, hardened mountaineers of the Maval region, would dash through the Adilshahis force at night.

A man named Shiva Kashid, who resembled Shivaji in appearance, had volunteered to dress like the king and get captured.

5/25
ALL
Conviction | Patience
Conviction | Patience
@unseenvalue
5 webinars/conclaves since May 2020 and over 100 stock ideas shared. Still not enough :)

Twitter should be like that airport shuttle service, the moment you walk out (start following someone) - there should be a chauffeur (new stock idea) ready to drive you to your destination!

[Free CDMO Masterclass #18] https://t.co/208eQbYKEF

[Free Art of Investing] https://t.co/bHvUqnpiTE

[Paid IIC Dec 2020 on SeQuent] https://t.co/3iDO438Et9

[Charity fund raise on Unseen Trends in Biotechnology] https://t.co/eNi1x1qwhH

[Q&A on APIs]
UV , HIDDEN GEM UV 1 , HIDDEN GEMS