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Suggest You - Strategy for Shopping Center Investments in California
SimplicityDo not over complicate the CV. It is your one and only chance to impress the reader, so keep it simple and pull out your strongest points to sell yourself. Keep it short, to the point and punchy.AchievementsAchievements are important to highlight and shows the reader the level of your ability. Use active verbs, such as, managed, led, responsible for, achieved as this just highlights all of your skills in an effective way.Work chronologicallyThe CV should start with your current or last employment and work backwards. If this is your first job, then list any work experience you have got in the construction industry. If you have many years experience, include about 5 previous employers. Include the employer’s name, job title, start and end dates and include a short description of your job along with your major achievements.HonestyAvoid lies and exaggerating. If you are lucky enough to be invited to an interview, you will be asked to elaborate on what you have put in your CV. Interviewers can identify liars via body language. If you get caught out, you will not even be considered for the role – so it is not worth it.Education
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adj
Are you the one who is looking for a loan? Do you need some extra cash to fill in the financial gaps? But, you don’t own any property to put as collateral? If your answer to all these questions is yes then you are at the right place at right time. It is commonly believed that being a home owner, one can enjoy horizon of opportunities and lenders find it easier to lend loans to them. But compared to the earlier times, the number of lenders with loans for tenants in the UK has increased. The lenders have realised that by taking a moderate risk they can increase their customer base. UK tenant loan is basically an unsecured loan meant to cater to the financial needs of those who do not have their own houses. This loan is also good for council tenants and people living with their parents. You do not need to keep any collateral to procure UK tenant loan. UK tenant loan is granted only on the guarantee of your repayment capacity. These loans are tailor made to fulfill the financial requirements of tenants.And it’s obvious that people living in rented houses are in no way different to those who own their own houses. Their requirements are similar to those of house owners to a great exten
1. Sell the property at a lower cap rate. If you purchased a shopping center at a higher cap rate 5-10 years ago then you will be able to capture strong appreciation. However, if you purchased the property recently at a low cap rate already, it’s not possible to reduce the cap rate much lower. So this approach probably won’t work.
2. Increase the rental income. Most NNN leases have a fixed 3% annual rent increase. Assuming the market cap rate remains the same, this will only equate into an unimpressive 3% annual appreciation, unless you want to achieve appreciation in different ways.
Property Analysis The goal to increase the rental income begins with the analysis of your purchase. While most retail properties in California offer 4-6% cap rate, many properties charge tenants below market rent due to
1. Poor property management and/or simply ignorance about market rent. Some property owners choose to manage their own properties to save expenses. However, they are among the worst property manager if the collected rent is used to measure their performance. They often are not aware of the market rent and so they often lease to the first tenant to ensure the unit is occupied quickly.
2. Long term leases signed when the rent was low.
So the key is to identify properties with below market rents and a low price per square foot. These properties will provide you with upside potentials. However, the market rents often have a wide range. For example retail space in San Jose commands between $2-5/SF a month. It’s not easy to determine if the tenants of the property pay below market rent. The following are some properties that have low upside potential that we may want to screen out:
1. Big-box properties with anchor tenants, e.g. Wal-Mart, Target, or Safeway. These big national tenants often sign long term lease with low rent due to its creditworthiness and large rental space. Once the lease is signed, the rent is locked in for 20-30 years. So it’s almost impossible to drastically increase the income within a short time. As a matter of fact, many big-box retail properties in California are listed at below replacement cost. This is because they have long term leases with below market rent. They are on the market for a long time and yet is not sold because the cap is low, e.g. 4%. The prospect for higher income is sometimes 15-20 years away when the lease expires.
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adju
This three letter word is at the root of more failure and success in sales than any other I know. People who consistently succeed in sales, whatever success means to them, do so because they ask for what they want. Salespeople who tend to fail do so because they fail to either know what they want or to ask for it.There are a number of areas in the sales profession or times in the sales process that asking can greatly contribute to your:-success. -income. -confidence. -professionalism. -knowledge. -performance.Here are just a few:1. Ask for the order. (the obvious one)2. Ask for referrals. (all the time)3. Ask for letters of testimony. (from every customer or client)4. Ask questions, lots of them, and keep asking them.5. Ask for the right to use them as a reference. (this can get you more business)6. Ask why they did business with you. (everyone)7. Ask why they didn’t do business with you. (every lost sale)8. Ask for the right to use third party influence.9. Ask a customer how you can best service them.10. Ask if someone will be a resource for you.11. There’s mor
1. Sell the property at a lower cap rate. If you purchased a shopping center at a higher cap rate 5-10 years ago then you will be able to capture strong appreciation. However, if you purchased the property recently at a low cap rate already, it’s not possible to reduce the cap rate much lower. So this approach probably won’t work.
2. Increase the rental income. Most NNN leases have a fixed 3% annual rent increase. Assuming the market cap rate remains the same, this will only equate into an unimpressive 3% annual appreciation, unless you want to achieve appreciation in different ways.
Property Analysis The goal to increase the rental income begins with the analysis of your purchase. While most retail properties in California offer 4-6% cap rate, many properties charge tenants below market rent due to
1. Poor property management and/or simply ignorance about market rent. Some property owners choose to manage their own properties to save expenses. However, they are among the worst property manager if the collected rent is used to measure their performance. They often are not aware of the market rent and so they often lease to the first tenant to ensure the unit is occupied quickly.
2. Long term leases signed when the rent was low.
So the key is to identify properties with below market rents and a low price per square foot. These properties will provide you with upside potentials. However, the market rents often have a wide range. For example retail space in San Jose commands between $2-5/SF a month. It’s not easy to determine if the tenants of the property pay below market rent. The following are some properties that have low upside potential that we may want to screen out:
1. Big-box properties with anchor tenants, e.g. Wal-Mart, Target, or Safeway. These big national tenants often sign long term lease with low rent due to its creditworthiness and large rental space. Once the lease is signed, the rent is locked in for 20-30 years. So it’s almost impossible to drastically increase the income within a short time. As a matter of fact, many big-box retail properties in California are listed at below replacement cost. This is because they have long term leases with below market rent. They are on the market for a long time and yet is not sold because the cap is low, e.g. 4%. The prospect for higher income is sometimes 15-20 years away when the lease expires.
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adj
When was the last time you received a handwritten note from a business associate? It may be that it was too long ago for you to remember. On the other hand, if you have gotten one lately, you know exactly who sent it and when. Handwritten notes have become almost extinct in the business world. So if you are looking for ways to stand from the crowd, to be noticed by your colleagues and clients, try putting pen to paper whenever you have the slightest excuse.There are few acts more impressive than handwriting a letter or a note to someone with whom you do business or would like to. Most people think that writing notes by hand requires extra time and effort. Ironically, it can be quick and painless if you do it frequently and follow these tips:1. Have writing supplies close at hand. Store stationery and stamps in the most convenient place in your desk. When you need to send a note, all you have to do is reach for your stationary, dash off a few lines, address the envelope, put the stamp in place and mail it.2. Keep your message brief. These are notes so you only have to come up with three or four sentences. If you attempt to compose more than a few lines, wri
Property Analysis The goal to increase the rental income begins with the analysis of your purchase. While most retail properties in California offer 4-6% cap rate, many properties charge tenants below market rent due to
1. Poor property management and/or simply ignorance about market rent. Some property owners choose to manage their own properties to save expenses. However, they are among the worst property manager if the collected rent is used to measure their performance. They often are not aware of the market rent and so they often lease to the first tenant to ensure the unit is occupied quickly.
2. Long term leases signed when the rent was low.
So the key is to identify properties with below market rents and a low price per square foot. These properties will provide you with upside potentials. However, the market rents often have a wide range. For example retail space in San Jose commands between $2-5/SF a month. It’s not easy to determine if the tenants of the property pay below market rent. The following are some properties that have low upside potential that we may want to screen out:
1. Big-box properties with anchor tenants, e.g. Wal-Mart, Target, or Safeway. These big national tenants often sign long term lease with low rent due to its creditworthiness and large rental space. Once the lease is signed, the rent is locked in for 20-30 years. So it’s almost impossible to drastically increase the income within a short time. As a matter of fact, many big-box retail properties in California are listed at below replacement cost. This is because they have long term leases with below market rent. They are on the market for a long time and yet is not sold because the cap is low, e.g. 4%. The prospect for higher income is sometimes 15-20 years away when the lease expires.
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adj
In a perfect world, there would be such things as free medical care and health insurance. Sadly, we live in a world that is less than perfect and everything has its consequential cost. The same is true for health insurance. Somewhere along the line, someone is made to pay.However, this does not mean that you must pay the high cost of medical care all by yourself. There are ways to reduce the rising cost of premiums and deductibles, and while this does not make health care completely free, it does lessen the financial burden a little bit.State-sponsored health insuranceFor certain low-income families and individuals who fit into specific eligibility groups, the government offers assistance with the cost of health care. The client requesting health care is given a subsidy by the government, thus reducing the premium he or she will have to pay regularly. While this may be an attractive option, you may want to consider the fact that this is essentially a government-subsidized form of group health insurance, and can offer you less coverage than you need. Then again, it may be better than having no coverage at all.Specialized insurance coverage for childrenS
1. Big-box properties with anchor tenants, e.g. Wal-Mart, Target, or Safeway. These big national tenants often sign long term lease with low rent due to its creditworthiness and large rental space. Once the lease is signed, the rent is locked in for 20-30 years. So it’s almost impossible to drastically increase the income within a short time. As a matter of fact, many big-box retail properties in California are listed at below replacement cost. This is because they have long term leases with below market rent. They are on the market for a long time and yet is not sold because the cap is low, e.g. 4%. The prospect for higher income is sometimes 15-20 years away when the lease expires.
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adj
I’ve read about all kinds of ways to advertise. And they all are promising. But, the truth is, There is only one way to advertise Successfully... So, what are the best ways to advertise?Remember the one who advertises the most, makes the most money.Think of advertising like going fishing: 1. You need good equipment(website, products to sell) 2. The best bait (ads, sales letter, advertising) 3. Know where the fish are biting (target the right prospects, every where) 4. Patience (relax and wait for a bite. Then reel them in)The ABC’s of successful advertising: A. Advertise B. Business C. ContinuouslyAdvertising is the very heart beat of your business. No matter what business you’re in, doctor, lawyer, babysitter, painter, internet entrepreneur, etc. Why are some businesses so successful? Is it their products? Maybe, but I don’t think so. The main reason is not their products, it’s their advertising.I’m here to tell you. Advertising is the key to your success. Stop or slow down on advertising and your business will soon die. I guarantee!You have to be dedicated to advertising 90% of the time and the other 10% sho
2. Retail centers with very high price per square foot, e.g. more than $800/SF. You will need to charge the tenant $4/SF a month plus NNN to achieve 6% cap. This is almost the highest rent in the market so it’s hard to push it up even higher.
3. Retail centers with long term options AND fixed 3-5% rent increase instead of being adjusted to market rent. You should pay attention to this little detail in the lease as it may have major impact on the rent you collected. The problem is the appreciation is often higher than 3-5% annually in California. So if rent is not adjusted to the new fair market rent at the beginning of a new lease option, the rent is most likely below market rent and it may not sell at the highest market price.
On the other hand, if you see multi-tenant shopping centers offered at 4-5% cap but priced at only $200-300/SF it’s very likely the property has below market rent. This kind of property will offer strong potential for appreciation. Once you see this property, you should also see if the property is:
1. Adjacent to an anchored tenant. Business owners prefer to be near an anchored tenant as this anchored tenant will bring in more traffic to the center. The business owners are willing to pay higher rent for this location.
2. A multi-tenant strip with small units. In general the rent is higher for small units, e.g. 1000 SF than for larger 4-5000SF because there are more tenants looking for 1000 SF units.
3. On a major artery or near the freeway. More traffic and convenience are always good for business.
4. In a stable or growing area with higher household income. When the local residents have higher disposable income, they will spend more time and money for good and services offered in the retail centers.
5. Located in an area with low vacancy rate and high rents. Ideally, you want a property lease that will expire within 1-5 years. This will allow you to adjust to the higher market rent quickly.
Sometimes it helps to see problems as opportunities. For example:
1. Most investors don’t like retail strip with gross leases. However, if you can convert these gross leases into NNN you will be able to get strong appreciation.
2. Most investors don’t like a shopping center with high vacancy. However, you may be able to buy at a low price. If you can turn around and improve the occupancy rate quickly, you will be able to realize good appreciation.
Property Management:
Once you purchase a property, you will need a good property manager to help increase the rent. The property manager is a key partner to implement your investment strategy. In order to increase the rent substantially, e.g. 30-50% more compared to the rent in the previous lease, the property manager must demonstrate to the tenants that the new market rent is a fair market rent. Otherwise, the tenants may make a wrong decision and move out. This involves research to determine fair market rent and providing comparables to the tenants. So as a fair business person, you want to make sure the property manager has an incentive to do the extra work. One way to accomplish this is to compensate the property manager a certain percentage of the appreciation when the property is sold in addit
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