How One Real Estate Investment Helped an Actor Pursue His Dream

How commercial real estate investments help an actor pursue his dream

One of the things I love about Real Estate is that it can help people to achieve their dreams. Take for instance a client I met back in 2005. His entire life, he always wanted to be an actor in TV and Film. After 30 years of working a day-to-day job he decided it was time for a life change. He sold his SOHO condo in NY, and decided to move out to where movies stars are made… Los Angeles.

The move was a bit of a shock, as he had grown accustomed to a certain life style, but was shocked with the rents in Los Angeles. He was looking to take the money from his SOHO condo and purchase an investment property to help pay for the transition. He was at the time working with another commercial real estate broker that specialized in Multi-Family assets. Unfortunately for the client, Multi-Family in Los Angeles was at an all time high, the cap rates weren’t that great, and as hard as he looked, he could only find a property that would barely cover his rent for his new home. That meant he would still have to work, at least part-time, a live the life of a struggling first time actor. Not something he had envisioned, or wanted to do.

After searching a couple of months, the other broker decided that he wasn’t going to be able to find this client a multi-family property that would generate enough income for him to live off of comfortably. I was having a conversation with this broker, and asked: “What about other asset classes that generate more income?” He hadn’t thought of that, as he had specialized only in multi-family. I mentioned that I think I could find the right property for him but in my specialty, Single Tenant Net Lease assets (“STNL”).

After discussing the benefits of STNL (typically lower risk, no maintenance or landlord responsibilities, long term leases, and higher rents) he referred the client over to me. The search was difficult as the client had high income targets. That ruled out many of the “Class A” type STNL properties, (McDonald’s, Chick-Fil-A, In-N-Out, and many other corporate guaranteed clients). I reached out to my network of STNL listing agents and believed I found the perfect property for him.

The brand was a large regional brand (Whataburger). The client had never heard of them, but I explained they were a strong regional brand, started in 1950 (three years before Burger King) and the brand had a cult like following, and was of slightly larger in term of number of units (at that time) to In-N-Out. He immediately understood the basics of the concept and investment, and was interested.

After locating a medium sized franchisee, and discussing the risks associated with this type of tenant, the client decided to move forward on a newly constructed location in Georgia, that had set records for sales within the system. The best part, the income generated by this tenant and location was almost double what he could have gotten purchasing a multi-family property in Los Angeles.

During the due-diligence, we went out and visited the property and location. After seeing the property and location, the client was “All-In”. The escrow process went smoothly as he utilized recommended vendors, from the all important attorney (a must for any commercial real estate transaction), to Environmental inspectors, and surveyors.

I did end up receiving a very good commission (and paying a good referral to the referring agent), but even more importantly, at the closing dinner the client told me: “I didn’t even know that these investments were out there. I can pursue my dream full-time, without struggling to make ends meet. You Changed My Life, Thank you.” And that was more rewarding than any commission I could have received.

If you’re thinking about investing in real estate, do what this client did: Identify why your investing, what are your goals you are trying to accomplish, and find the right broker that can help you achieve them.

Looking to purchase a real estate investment, call me at 310-943-8536 or email me at gpino@cbicommercial.com for more information on available opportunities that meet your goals.

For all your commercial real estate needs, Commercial Brokers International is here to help.