What is happening you YouTube.
It's Matt Faircloth
Welcome to this YouTube channel.
As I said, my name is Matt
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This one comes from Jacob says, hey,
love to reach out to you.
I am 23 years old.
Love that you're
getting into real estate so early
and currently working in a restaurant.
Want to get in real estate
and want to look at maybe multifamily,
but also really curious about retail
and how to make retail work
and maybe converting
old real retail spaces into something
that multiple businesses can operate.
Love it.
First of all, why there's an opportunity
in retail, retail, the world of retail.
And this is a place
where you go to shop, right?
So the retail strip center, a strip mall
or even like a retail
building with like retail
in the first floor and apartments above,
well, this
qualifies retail and retail in general
just means a place where people go
and direct commerce locally.
Could didn't
you know,
if you walk in the door,
it could be like a law office
or could be a travel agency
where they just talk to people on the phone.
But it's really
a business over a residence and
not an industrial place
where they're making something.
Yeah, it's not something that's
that's manufacturing or residential.
It's a place where business is carried.
And a lot of times it's in a place
where multiple businesses
are like a strip center
or something like that.
What Jacob's referring to here
and what you see a lot of are multiple
commercial centers, like a strip center
or like a small office
building or something like that,
where there's a lot of retail
happening all at once.
So let's just use a commercial strip center
as the example.
Commercial strip centers
have gotten here or gotten hammered
because of, you know, make the list, right.
COVID, Jeff Bezos thinks Amazon
just and it's not really his fault.
It's just the world
has gravitated towards things.
To our handy dandy cell phones here.
We're able to buy whatever
we need online, not just on Amazon,
but even on target.
It used to go to walk into and buy stuff.
Now you can buy and target
a lot of target online.
So why would I get
in my car and drive to that physical store?
If I could go to the physical stores website
or have somebody
deliver it to me from a warehouse
or whatever it may be?
Life has got a lot more convenient.
We needed a
tube of toothpaste back in the day.
You two get in your car and drive to the CVS
or drive
to the local convenience store,
the local pharmacy around the corner
from you.
Then buy that tube, toothpaste.
They have to do that
and I can push button my phone.
Off we go.
I can have everything from a hoagie
to a tube of toothpaste
to a million other things
delivered to my home.
And that has drastically affected
retail in all markets, in urban
markets, suburban markets, everywhere.
If I can get
what I want and I'm willing to wait
a day or two for it,
why would I get in my car and drive
20 minutes to a retail center to get it,
if I could just have it delivered? Right.
That's become the logic here in America.
Right.
So that has drastically affected retail.
We're used to be
this where you had to go
to get all your stuff,
your tube of toothpaste.
But what you still can't do any time soon
on your cell phone in a retail strip
center is do things like get your haircut,
do things like go see a doctor,
do things like get an MRI.
And some people still
like to
go shopping physically in a retail center,
like some people
don't trust buying
shoes online or buying clothes
online would try it all and see how it looks,
even though
they're figuring out how you can do that
from home too, right?
You try stuff on and set it back
or digital mirrors all that's coming.
But until then, people
may want
to still
go to a physical store
to go buy something
physical, to
pick it off the shelf and try it. Right.
All that said, guys, retail is changing
and if you are
a real estate investor is my friend
Jacob is here
and you want to get into retail investing.
The biggest thing that I'll give you is
make it something that's
physical required, meaning like
you have to physically
be there to utilize that retail store
or make it something that is so focused
on a certain thing like let's, let's pretend.
Do you guys go
by a retail strip center
that's vacant or 50% occupied?
And because a lot
of retail strip centers are decimated by,
you know, COVID and online sales, you
probably get them
for a pretty good price per square foot,
a lot less than what they used to sell for.
So let's say you go by
one of these places that's 50% occupied
and you make it
something that is theme based.
And I'm not talking about having like,
you know, cartoon characters
running around theme based.
I'm talking about
what if it was a wellness center
and you target marketed the chiropractor,
the dental office
and the doctor's office and the MRI place.
You put it all in there.
This is all believe me,
this is all happening.
This isn't Matt's idea.
This already exists, that you could be part
of that movement.
And as we have an aging
population in the U.S.,
there are
people are going to want
those wellness centers
are going to be all kinds of things
to keep them.
Well, maybe with like a drugstore
as an anchor meeting, like the big store
that attracts everybody on the on the corner
and everything else you need.
And one, maybe it is a beauty
focused center, so maybe there is
a nail place and a hair salon
for women and a hair barber for men
and other things that people need for
their beautification needs.
And maybe
a nice boutique store with cool stuff that
you can't buy online
or you wouldn't trust buying online.
Like nice shoes,
nice clothes, whatever, right?
The world is
your oyster, Jacob,
but the the sense that I've seen
and those that are heavily
invested in retail have told me,
is that the retail movement
is going to move
towards making these retail centers full on
context based centers.
So not just
the, you know,
the different stores that are all
sort of different things.
There's the retail centers
that are going to be
successful in the world moving forward,
are going to be centers
that are focused on things
you have to physically be there for
and also things that are theme based.
So those are my two tips.
And you guys can do really, really well
in retail and buying those that are
heavily discounted because they're
they've lost
a lot of tenants
and the owners are just, you know what,
I just don't do this anymore.
I know how to do retail in the eighties,
nineties and 2000,
but I don't know how to do it
in the 2020s and forward.
So I'm not going to get to sell
this retail strip center.
You can find that owner
and buy it from the tired baby boomer.
It is won't do it anymore kind of thing.
Right now,
once you've got the strip center,
you want to set it up a few key steps.
It really helps to get a realtor
that's well connected in the business
owner market.
So realtors, commercial realtors
that have a background
in commercial leasing are going to be key.
You do not want to be the one that's
going around finding the
the barber and the nail salon or whatever.
You don't have to
get yourself a good commercial
realtor to list it for you.
What's great about retail
in residential real estate, the owner pays
for the real estate taxes and the insurance
and all utilities or most utilities
and repairs and that kind of stuff.
So in retail, if you get the right
tenants and you get the right
building and you're in a strong area,
you could do something called triple net
where you pass
all those expenses on to the tenants
or even the real estate taxes, the insurance,
the cost to maintain the parking lot,
the shovel, the snow and like.
So you're going to send the tenants a bill
based on how many square foot they have
and how much that bill
and how much that charge was.
They're going to pay their per pursue
a portion of that expense.
Pretty cool, huh?
You know, the right
tenants that are financially strong, you
to have the right
a lot of different boxes
have to get checked
but triple net leases are
well accept market accepted
second in retail
is rarely month to month
it's really year to year on
leases are typically five years
or more on the lease contracts
with rental increases every year. So
the contracts are very, very
landlord friendly in, in retail and
and the revenue streams are very,
very landlord friendly.
So if you can get strong in retail,
you can do very well
is what I can think of right now.
If you guys have other thoughts,
if other retail investors
are watching this video, leave
some comments down below on retail. Why?
I think it's amazing
if you're a retail hater
and you think retail is going
to completely go away
and we're going to just
do all of our business on our phones,
you should be
that comment to
and why I think retail is risky.
Are we right?
Retail is not a good bet.
It is an interesting space.
It is a niche, super niche, and it's
viewed as a risky space right now
because of all the changes in the world,
which is why
you can probably get a pretty good deal.
So, Jacob, great question.
Get yourself out of that restaurant job.
You got and get yourself
full fledged
into retail real estate,
as you said here in your email.
Thank you, Jacob.
Thank you guys for watching.
Help me address a group dot
com is the email address.
You can shoot me online and ask
a real estate question and I'll answer it
here on the channel for you.
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So join us there.
Thanks for watching, guys.
Have a great and profitable week.