Business
What is the state of industrial investing today? What are some techniques you can use to buy industrial properties? Darren Smith, Principal of Solid Growth Properties shares his tips. You can read this entire episode here: https://bit.ly/3FrseNd Why did you decide to focus on industrial? What is the state of that asset class today? Like most investors out there, I started in the single family and dabbled in multifamily and mobile home parks. I actually got hurt really badly in mobile home parks during the last crash. I definitely took some lumps, made some money, so I was able to kind of recover but I’ve tried a lot of different things. The usual transition from people who are doing single family houses, flipping, wholesaling, rentals is to go into multifamily, maybe they get a duplex or a fourplex. And then they scale up from there into larger and larger number of units. I have several good friends who own hundreds and in some cases 1000’s of units in multifamily and are doing it very successfully. What I learned from watching them, though, that it is ultra competitive, my friends are really sharp people that are working really hard. They got really creative and they put these deals together with syndications on cap rates that I would not be comfortable doing. And I didn’t know if I could compete in that market. They’re just better than me. You have a different and maybe unique approach to find industrial properties, please tell us a little bit about that. All I did was I took the things that other people taught me on the single family side, and I just applied them to industrial real estate. I take those things, and I step them up to a higher level of quality. If you’re marketing to houses, maybe you’ll have someone from South America doing your cold calling, maybe you’ll mail them a postcard or more generic type things. Whenever I’m dealing with the commercial side, having that level of sophistication as high as you possibly can when you’re interacting with these people is important, to show your credibility. I have a girl in my hometown, I coach her, we work together, she comes to my house. She’s that real personal touch of somebody who knows the area, she can say, I know that town, I went to lunch there two weeks ago, and making sure that you’re at the highest level where you can have those conversations to build that rapport. For our mailers, it’s the same thing. I like to target properties from 5,000 square feet up to 200,000. When you’re marketing to those, you run across a lot of different types of owners, from institutional type owners that own lots of property to, in smaller properties, it might be the only building that they own, they might have had their business in it. The letter that they get from me, it’s thick cardstock, you can feel the difference, it has a real stamp, they have machines now that actually write with a real pen for the address and the return address and the letter that’s inside. It costs more. I put my business card with my picture in it in every envelope before we seal it up. When they’re talking to me, they can see the person that they’re talking to. And I don’t know how much of a difference that makes, but I definitely have had people comment on it, they can look at the person that mailed them the letter and make that connection. That’s how I target and get people to respond to my letters when I’m mailing, or get people to actually pick up the phone and allow my assistant to set that appointment. Are you finding properties only through mailers today? That is the vast majority of properties that I come across and that I’m talking with, direct marketing. That said, I do love working with brokers, two of my favorite properties came from brokers. Darren Smith darren@solidgrowthproperties.com --- Support this podcast: https://anchor.fm/best-commercial-retail-real-estate-investing-advice-ever/support