Charles:
Welcome to another episode of the Global Investors Podcast. I’M your host, Charles Carillo. Today, we have Austin Hair. He is a real estate investor specializing in site selection for healthcare groups. He helps clients out-position the competition and scale faster. He spent over a decade as a professional wakeboarder, and in 2013, he nearly lost everything after picking the wrong location for his retail fitness center. Austin now shows others how to find the right locations that stack the deck in their favor. He has been featured on NBC’s American Ninja Warrior, CBS Sports, and ESPN and has interviewed more than 150 healthcare executives and founders on his podcast, Helping Healthcare Scale. So thank you so much for being on the show today, Austin.
Austin:
Hey, Thanks for having me. I appreciate it.
Charles:
It’s great to have you on here. It’s great to have people from different disciplines and backgrounds. ’cause Then we kind of understand all the different strategies that people are using out there for investing in real estate.
Austin:
Yeah, yeah. Hopefully I can provide some value. That’s What we’re, that’s what we’re hoping.
Charles:
Yeah, I think you will. So if we just before we get started, if you can just give us a little background on yourself, both personally and professionally prior to getting involved in real estate brokerage and investing.
Austin:
Sure. So I got started out, I would say like my career in athletics, you know, really started when I was 12, and that’s when I started focusing on wakeboarding and going to school and, and doing all that kind of stuff. And I decided that I wanna be a professional at that. And when I graduated from high school, I read the book, rich Dad, poor Dad, and learned about this concept called house hacking. And so I was in a really unique opportunity that I knew that I could find other roommates, you know, who wanted to come and live on a lake. So I would rent out rooms, or I would rent, I would send the master lease to the whole house, and then I would individually rent out. I would take on the, the risk and I individually rent out the rooms with the goal of getting my rent for free.
Austin:
And so, you know, helped get wakeboarders in to ride with and train with and get better and work on my skill. And then it also gave me some extra cash, you know some savings to eventually buy a house, which I ended up buying a house in 2011 and kinda did the same thing, you know, bought, got a, got a bunch of roommates. It was like a four bedroom house with a, with a guest house. And I, I was actually getting paid to live there, so like, I owned a house. I had the master bedroom. It, you know, it overlooked. It was a two story house and a lake with a pool and a hot tub. And of course, this is the bottom of the market, right? So I got really lucky that with just the timing. But I was living there and getting paid to live there, you know, and, and as my mortgage was getting paid.
Austin:
So then I continued to work on wakeboarding. I did that for about 10 years. In the background I was kind of doing, you know, the, the real estate thing. I ended up getting another house in 2015 and in between there. So I was doing I started up some gyms as well, was a franchisee. And that’s when I learned about the site selection process. And yeah, almost, almost picking the wrong location. So I ended up selling the gyms in 2019 right before Covid. I, I, however, kept the real estate that I had and when it was all said and done, I was like, you know what, what I like this real estate thing. And so I ended up working with my partner who helped me do some site selection for my gyms. And now we focus on real estate for healthcare groups.
Austin:
So like multi-site healthcare groups, you know, we’ll do the same analysis that he ran to help me opposition the competition with my gyms. We run that analysis for other groups, like healthcare groups to help them stack the deck in their favor, like you, like you mentioned earlier. So now we do I still do Airbnbs and, and short term rentals and, and we and then we also do site selection and investment for the real estate healthcare groups. So I know it’s like, I feel like there’s like three, there’s Austin 1.0, 2.0, 3.0. So that was a lot. I know that’s a lot of information, but I hope that answers the question. No,
Charles:
That’s great. House hacking. It’s how I got started too. And it is a, it’s just great. I don’t, it gets a lot of coverage, but I think it’s something that I just, it’s, it’s a really good way of getting started in investing in real estate. How are you, when you speak to new investors, do you suggest that they take a similar path to what you did or go a different route?
Austin:
Yeah, I always tell people about how I did that. You know, it becomes, everything’s got a trade off, right? And so I think that it really depends on, on kinda like your age. Obviously if you’ve got like a wife and kids and, and you’re just learning about it, like you’re not really gonna be able to house hack. It’s definitely like a thing for bachelors to do. But the good thing about it is that it doesn’t really get in the way of if you have a full-time business. So like there’s a lot of hype around side hustles, you know, all the time. And I think Alex ho Moey has a good saying where he calls it like the woman in the red dress referring back to that scene in the Matrix where it’s like, you know, if you’re focused on this one thing, like the woman in the red dress is that side hustle that can distract you.
Austin:
You take your eyes off the prize and then boom, like the gun’s at your head, right? So I, the thing I don’t like about house hacking is that you gotta live somewhere anyways. And so you don’t necessarily have to focus on, you know, running a real estate operation, right? ’cause A lot of people, I think, get into real estate with the incorrect assumption that it’s passive income because that’s been shoved down your throat with a lot of real estate gurus for years. Oh, passive income even, even though I love Rich Dad ported, that’s what got me into house hacking. That’s what got me into real estate. It’s just simply not true. I mean, look, eat the fish, leave the bones. Like there’s good stuff from that book that absolutely changed my life. A bunch of, like, a bunch of books that I read that helped, but like, not everything was, was good, right? And, and I had to figure that out the hard way. And so, yeah, I think that you have to, you can, the reason the thing I like about it is just that if you are focusing on something and you’re building something, you know, you’re an entrepreneur, you’re starting your journey, whatever it is, you can still do that while you’re house sacking without necessarily going full-time, real estate. If you wanna go full-time, real estate and like, scale, like that’s, that’s a different conversation that we can have too. Yeah,
Charles:
No, I agree. There’s, there’s a lot of good nuggets in there. Yeah. The passive income thing, yes, it’s been shoved down everybody’s throats for years. I consider when I, when I, if I’m mentoring people, I just, it’s, it’s semi passive. I mean, if you buy like an apartment complex, let’s say ev you know, you put apartment, you put a property manager in charge of it, it’s a semi passive thing after it’s set. I mean, you’re still asset managing it. You’re still getting calls for those big things. Yes. I mean, I’m not over there picking up trash and like collecting rent and stuff, you know what I mean? That’s taken care of by the property manager, but it’s a semi-passive type, I would say, type of an investment to the best. You know what I mean? And if you are doing work to that property initially, well now it’s like really, you know, it’s a job.
Charles:
You know what I mean? Mm-Hmm. <affirmative>. But those might last like two or three months and that’s kind of how it works, you know? But it’s something that yeah, it’s completely true of what you’re saying about that. So when the, the other thing too, you’re talking about like the side hustles, I think the, the great thing about house hacking is also that, first of all, it’s much easier to manage. So when I did mine, there were like three family properties. Okay? So you are really dipping your toe into the water on getting started, you know what I mean? Because most people when they’re buying a rental property, it’s not close to them. Maybe it’s 15 minutes, 20 minutes, you’re like, oh, that’s not that far. Yeah, right. But if you’re working full time, I gotta drive there. I gotta do this. If I have to open up a door for someone, you don’t know what you’re doing because it’s your first rental property, let’s be honest. I mean, I had no idea what I was doing when I became a landlord. You know what I mean? So it was something that, right. Yeah,
Austin:
Because somebody told you it was passive income, right? So you just thought you, you bought it and then put it for lease and then you’re done. <Laugh>,
Charles:
My dad was a, a real estate investor for many years, so his stuff was really okay. They were like de class stuff. So his stuff was very far from, he had like a team he put together, so he made it the same thing, semi passive, you know what I mean? But it’s like I just, you know, you dip your toe in the water, but when you talk to people, they have a full-time job. They’re doing something, they want to invest in real estate, it’s farther away having the house hacking all the units under like with you, you know what I mean? Or close, you know, right next to you, whatever, however it’s set up that they’re on your property. And then that way if you’re working on your property, if you’re at your property, if there’s an issue, I mean, you can go and look at it, you can go and like figure it all out. Yes, you have to live with your tenants, but I mean, there’s pros and cons to everything. It’s also a nice way of like, you were making money. I was pretty much almost re I think breaking even on when I did my house hack. So it was yeah, I mean it’s still less expensive than, you know,
Austin:
Which is ni Yeah, it’s still great though, right? Like, think about that, like 99% of the population has to pay for where they live, and you are able to live for free and you own a, like they’re paying your mortgage plus you live for free, right? Effectively, if you would’ve moved out, you would’ve collected the cash flow, right? But you stayed in there and instead of having that cash flow, you got a free place to live, which is, is still gonna help you get outta the right race. Which I think is like a really important thing to have like the earlier you can do that, the better. Yeah. The
Charles:
Passive the passive income myth, right? But on, on, on reveal over year. But I
Austin:
Mean, yeah, and to your point, like, you know, it like, you called it like a mini semi passive, right? It definitely operates on, on a spectrum. And when I got into short term rentals, I thought that was gonna be passive income. I thought everything real estate related was passive income. Well, that’s like on the extreme side of management, I mean that’s like, that’s a hospitality business, you know, it’s not quite as intensive as like operating at Starbucks or a dentist office or you know, a traditional business. But it’s like, it’s definitely a halfway point between like the semi passive long term rentals and the full on business. So it’s just like very hands-on Now, of course there’s more upside ’cause it takes up more of your time. But there is really, like, the only thing that’s truly passive is if you’re a limited partner in a deal, right?
Austin:
Like, otherwise, if you’re the one that’s like creating the deal, finding, you know, bringing it together, get, getting on bank debt is, is a challenge these days. It’s always a challenge, but it’s especially hard like finding where the deal is like that. It takes a lot of time, it takes a lot of knowledge to know what you’re gonna buy that’s not gonna lose money. And then just like the management of the asset, like you said, even if it’s an apartment complex where you have managers, like there’s still like somebody’s gotta be the mortar that holds all the bricks together, right? And that’s the general partner. So yeah, there is no like a hundred percent passive investing unless you’re the limited partner in my experience. <Laugh>.
Charles:
Yeah. I think it’s passive and passive income gets mixed up with recurring, recurring income, you know what I mean? So
Austin:
Yes, a hundred percent.
Charles:
They’re like, oh, it’s passive. Well, you, you bought a business, it’s got recurring income. It’s like, you know, like the insurance business, it’s recurring, but you still have to handle the people that have policies with you. You know what I mean? So it’s it’s what it’s, but let’s talk about like what you’re, what you’re like what you’re doing now with short-term rentals because it’s something that we touch on on the show. Obviously mostly what we talk about is like rental properties with multifamilies, stuff like this residential. So talk to us about kinda some of the advantages you liked about short-term rentals versus maybe going another route into other asset classes within real estate, because there’s so many of ’em.
Austin:
Yeah. Well, you know, when I got started it was definitely really scary to do short-term rental. ’cause No, Airbnb wasn’t a thing. I was like, well, can I get this leased? Or like, or can I at least make up what I would get from like a long-term lease if I was doing it? So I was lucky in that I was able to dip my toes in the water because the second house that I bought was a duplex, and I had long-term tenants downstairs, and I was living upstairs. And when I would go outta town to wakeboard competitions on the weekends, I would put it up for rent on Airbnb and it always rented out. So I was like, oh, that’s really interesting. So like, I was able to kind of risk free test it out. And I was actually, I still have my other property, my single family property, and the tenants were destroying it.
Austin:
The long-term tenants were just absolutely awful because like I said, it was like four bedrooms plus there’s a guest house and you know, nobody, like, I had one guy sign a master lease. He, he wasn’t able to pay me like on time. I, I ended up by like default having to collect like these four different payments from all these different people. And I’m like, dude, this is not what I wanted. So the property was trash every time I went over there, I was discouraged. So I actually put it up for sale for like a brief period, but then I thought, well, you know what, before I actually sell this thing, like, what do I have to lose now? I might as well try short term rentals. And it actually took off. Like it actually did really, really well. And the thing that I liked about it was I could keep my property really well maintained because now I have maids walking through every time, you know, I pay for the landscaper, landscapers and the pool guy and all that kind of stuff, right?
Austin:
And we catch any, the images. So your property stays in pristine condition, so you can sell it anytime you want. Now the trade off is the, the guest expectations have gone through the roof. I mean, it used to be rented and they will come now we are charging more money, but so are a lot of people, right? Like not, not crazy amounts. And so to your point or to our, what we were talking about earlier that we have, I have a hospitality business, you know, I have to have virtual assistants, messaging guests, I have to have cleaners that are available all the time, like every single day in case we get a same day flip or an instant booking. I have to have maintenance guys like all like 20 there. I have three properties in Orlando that are like large, can sleep 16 to 20 people, one in Ohio that can sleep.
Austin:
About 24 people that are really, it could sleep 40. I mean it’s 12,000 square feet. And so the, the two of them are, are so simultaneously serve as a wedding venue, but like that’s almost got like a full-time guy. I mean like 12,000 square feet. That’s like, you gotta think that’s like the square footage of four or five houses, right? Like that’s almost like a full-time property manager like that, that 40 hours a week type thing. So yeah, it’s like, I just look at it as a business, you know, like I have monthly calls with my virtual assistants. I have weekly calls with the property manager and I’m on, I’m on the phone like pretty much daily <laugh> with the, with the handyman. Now we’re kind of like doing a lot of improvements right now to create like a really top end, top of the line product so we can charge top of the line prices. But that’s been a year long process and it hasn’t shown any signs of slowing down. So this was like that to my, what we’re talking about. They’ve got side hustle, like this was supposed to be my side hustle. Now it takes up half my time, right? Like I’m, I’m like split prong between our, our commercial real estate and our site selection process and our developments and then, you know, managing luxury event space rental and Airbnbs <laugh>.
Charles:
Yeah. That’s, that’s a lot, man. That’s great. That’s, yeah, it’s, when you’re, when you’re talking about those large properties like that, it’s, it’s really like hiring a handyman to do your apartment complex, something like that. I mean, it’s just like, it’s, there’s a consistent list of work that needs to be done. You fix one toilet over here, you gotta go over here, do this, do that. This doorknob is loose, this is that. I mean, it’s just like an, it’s a, no matter how good the property is, there’s always something that’s gonna need, which is, which is great. The, the problem there is that if you didn’t have someone that was pretty much fulltime, it would just cost a lot. So the only way of really doing electric property. Yeah,
Austin:
Well that’s the crazy part. Yeah. Like that’s, you know, we deal with that a lot. Because I’ve, I’ve had handyman who essentially said, Hey, like, well just go get it bided out and I’ll match it or I’ll beat it. And it’s like, okay, a I’m hiring you like, you know, you’re working like you’re an employee, I need an employee, right? You’re gonna get consistent hours. You don’t have to go bid jobs, you don’t have to waste your time or your gas to go quote somebody on something that there’s zero you know, guarantee for you in that situation. You show up, you get paid, right? But like, I’m not gonna spend my time and my brain power bidding jobs. Like no, if you like, if it’s not that crazy, hard and complicated and we can figure that out together, like you could use YouTube to figure it out.
Austin:
Like, I need somebody who’s gonna go do it, right? And so, like you said, if I have to go, like, if you don’t, that that’s, I really don’t know how people make money with just like two, three bedroom, even like some of the four bedroom properties where they can’t really have, like, you just own one or two and like, it doesn’t really make sense to bring on a guy. You’re always calling a third party service providers. I mean a hundred fifty, two hundred fifty bucks an hour, whatever the plumbers, you know, HVAC guys, whatever they charge now, I mean it’s, it’s every week almost like at least a couple times a month, you need somebody like I plus parts like yeah, I don’t know how they make, they make money doing that because you gotta have at least kinda like enough properties to have a full-time guy that’s your employee who’s really handy and really knowledgeable, or at least has the mental capacity to figure it out. <Laugh>.
Charles:
Yeah. You need a handyman that’s not just painting, you know, painting type thing, right? You need someone that actually has, I had a really good handyman for a first set of properties we found and just was very well versed in like, heating and like plumbing. And you’re like, those are very expensive things if you can get people out. Yes. You know what I mean? So
Austin:
And electricity is the third one,
Charles:
<Laugh>. It was just like, yes, it’s I mean it’s, you need, if someone’s like, well-versed enough to be doing, you know, those type of activities, some of them, you know what I mean? Obviously we’re not gonna have ’em do like stuff that needs to be licensed. But the thing though is that if they can do it, I mean it saves you a lot of time and a lot of money. I mean just coming out and like snaking drains and all that kind of stuff. I mean, if you called someone to do it, it’s like, I mean, it’s cheaper for me to call my attorney to come out and snake it. No. It’s like, it’s <laugh> if
Austin:
They show up. Yeah. Plumbers man, they charge, they, you know, my wife’s a physician associate went to school. Like, it’s like, yeah, I dunno if you know what that is, but you gotta do a lot of schooling. Like it’s very intense. I mean, plumbers are charging as much as physician associates or more
Charles:
And they’re turned on business. I mean they get business all day long and they don’t have to worry about all the insurance that a physician <laugh> has to deal with.
Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.
Charles:
So going forward here, I wanted to talk about, ’cause you had an interesting story and I wanna kinda like drill down into it, like kind of what happened in 2013 and then we can kind of transition into what you guys do now because it’s a very interesting niche that you’re involved with in regards to your real estate brokerage. So tell us what happened in 2013 and kind of how that changed your perspective on commercial real estate investing and commercial real estate in general.
Austin:
Yeah, so I became a franchisee in like 2012 and we opened up our first location in 2013. It was called Nine Round is a, it was a kickboxing fitness center. And honestly like it was, it was 2013, like that first location I, I picked a spot close, close to home. I got really lucky and that, that location actually ended up working out. But it worked out really good. So immediately tried to open up my second location ’cause I had a three pack and the second location I didn’t like, I was looking for a place that had a high income, not realizing that high population density was equally as important. So I was only looking at the income, like income demographics. And so picked a spot like that really was not a good spot. And that was like I, where I almost lost everything.
Austin:
I mean the it really took me, it required me like really going in there and being hands-on and trying to fix all of these problems and drive, drive revenue. Like in order to be able to account for all the expenses that we had because the rent, like the location that I had picked was just not bringing people in. I mean, if anybody knows Orlando, it’s, it was a place called Oviedo and yeah, great incomes, but like low population density where other places was near downtown and really, really high population density, which offset, even though it was lower income, the sure amount of people offset that. And so it was my third, well I acquired a location, was go out to do my fourth location. And I was thinking to myself, you know, I gotta go to Winter Park. This is like the coolest sex area.
Austin:
This is where I, you know, I have to be at to be a, a successful gym. But then my, that’s when I met my partner and he ran the numbers and the demographic data, did an analysis. What we found was like Winter Park was super saturated. Rents were really high full of competition. And we looked at Kissimmee and the demographics were, were wide open. I mean like no competition, right? And like I was just going off gut feeling and I just, you know, I realized you can’t make, and I knew what had happened earlier in my second location and I just realized you can’t make good decisions without good data. So I actually ended up getting in a disagreement with a franchisor. He he wasn’t allowing us to he was finding us for doing like, you know, group sales and, and things that like were really driving the business.
Austin:
And it was really detrimental to, to us and a lot of other franchisees. And so I pumped the brakes in the fourth one, thankfully. And then I actually, I’m glad that he was such a terrible franchisor because I ended up listing them for sale and, and selling ’em in 2019 and right before Covid. And so if he had been a good franchisor and we had gotten along, you know, I would still have them or I would’ve lost them in Covid, right? Like I luckily I, I got out so I I owe him a huge thank you <laugh> for that. And that’s when my partner invited me to come start working with him on the real estate side. So now, you know, he’s been working with urgent cares for 14, 15 years. We like healthcare ’cause it’s like a very safe asset, very safe industry, you know, in comparison to retail or, or whatever.
Austin:
Healthcare’s not going anywhere. And so we do a lot of like dental dermatology, urgent care, vet behavioral health, et cetera. And we go through, we run our analysis, we figure out how to stack the deck in their favor. Like we try and put them, you know, in a place that’s gonna, maybe it’ll out position the competition where, where’s like the most amount of ideal patients? Where are they already going and where’s the least amount of competition, right? And then whenever the real estate’s available, then we’ll buy it. Or if nothing’s available, then we can build it for them. So that’s kinda the business model. Now
Charles:
Can you just go into that a little bit more in depth? You kind of gave a little bit over overview of it versus, so how would you run that? So as I understand it with like self-storage for instance, what they do is they have something that says the population of an area and they divide it by the amount of self storage square footage, you know what I mean, of that. And they figure out if it’s overbuilt or it’s not right. Whatever the number is per person. How do you guys run it? Are you running, it must be demographics depending on the type, I mean go a little bit more into depth, kinda like how that works.
Austin:
Sure, yeah. So there’s a popular software called Buxton that a lot of people use for demographic data. We do not like them. We, we do not like them at all. They use census data and they, which was taken 2010, and they try and project four, which it’s been 14 years, is really hard to get that right. So we use a couple different softwares. One of ’em is Pitney Bowes, but and we use a lot of grocery anchor data, like grocery center data because the data is really actually really good around grocery centers. So we have a bunch of different subscriptions that we’re paying for every month to give us this data and we kind of just run our own analysis. And so the idea is like, we’ll do a grocery anchor study and we’ll figure out where are the most ideal patients already going or clients already going.
Austin:
And then we that’ll we’ll have like a tiered grocer anchor color coordinated key system. So like green will be the top, you know, the blue, orange, red, whatever. We lay that down on a map and then not on Google. We use Google Earth to this, so clients can use it. Then we do a competition analysis. So we try and figure out where’s the competition and we’ll put all those on a map, and then we layer those two maps on top of each other. Then we try and say like, okay, where are the most ideal patients already going? And then where’s the least amount of competition? And then we try and pick those specific trade areas or, or intersections to go and find new location for them.
Charles:
Oh, very interesting. It’s very cool. Yeah, healthcare is a great niche to be involved with because it is, it’s not going anywhere, you know what I mean? It is a there’s not really recessions with healthcare, you know what I mean? And all those people need those services no matter what’s happening with the economy.
Austin:
Yeah. Yeah, a hundred percent. I mean, like, you know, we sat down back in 2019 when we started working together and we, we had this conversation, it’s like, where, what if we have another recession? Like what are, what are we gonna do? Where are we gonna go? And the other thing about it is aside from just being resistant, like recession resistant, is that it’s a little bit less competitive than like trying to go out and develop for like a seven 11 or whatever. And so we’ve actually been able to make good relationships with, with national tenants. Like, you know, we had a healthcare user give us an, an assignment in lease summit in Missouri, and we got this building under contract and then we got Starbucks to come along as the second tenant. Well, the healthcare client backed out, Starbucks signed their lease and we brought another physical therapist and 90 unit physical therapist in to sign the balance of the space.
Austin:
And that helped us develop a relationship with Starbucks. So now we’ve done, now we have a relationship with you know, Starbucks and we’ve done some stuff with Chipotle and AutoZone and a couple other like national tenants. So now when we find good locations that are going to help the, our healthcare users, like get good street visibility, we can reach out to some of our other retail tenants than like in a situation where we have to do a new construction development. Well, that’s really expensive right now, and I don’t think it’s getting any cheaper. You know, the rents are like 40 to 55 to 60 bucks a square foot for new construction development, right? If, especially if you do single tenant. So if we can bring in, if we can like utilize our network of other tenants, we can do a multi-tenant building, like two or three tenants, now we can start to bring down the cost of that rent because a lot of developers for like obvious reasons are, are not willing to do single tenant buildings, right? Because it is higher risk. I mean, sorry, not multi-tenant buildings. They’ll do single tenant, not multi-tenant buildings. And so yeah, by going through and having a strategy that allows you to do multi-tenant to bring the rents down is something that we’ve been seeing a lot of interest in.
Charles:
Interesting. Very interesting. Yeah, it’s that it’s great, it’s great you’re working with those national tenants. I mean, we see national tenants doing our market forecasts and reviews and analysis, like when, and it’s, it’s just like you start seeing Starbucks or other 10, then you’re like, you understand the area because these tenants have done so much research in finding out where they’re gonna put a pro, where they’re going to, you know, start a store. You know what I mean? And so it’s like when you see that, it’s just like, it makes the whole area, I think it’s just something that shows you exactly what’s happening. So it’s great that you’re able to work with them and obviously it’s great for that property, but it’s also, you know, it’s great for any surrounding properties around it too.
Austin:
Yeah, yeah, a hundred percent. So yeah, it’s just, you know, when you are thinking about healthcare it is it, it’s resist recession resistant, pandemic resistant, inflation resistant, right? All those things. Now, the challenge is that they are capped and how much revenue they can make because it’s either capped by insurance or it’s capped by government reimbursement rates. And so with real estate, like patient demand is good, lots of people want to come see it, but like the patients don’t necessarily dictate our control how much they’re gonna spend. And so that’s why it’s a really interesting, well, I should say difficult industry to be in. So what do you do? Like when the cost of a new construction building goes, like you have a demand, your patient base is growing, you need to expand, you need to do more locations, but real estate’s up here, right? So that’s kind of like why we came in with that strategy is like, well, we know that you’re like, if we can get the rent to an agreeable rate, like we know you’re not gonna default, right? We have high, at least high conviction that you’re not gonna default. So how can we help your rent get more affordable? You do a multi-tenant building. So yeah, that’s kind of the reason some of the reasons that we like the healthcare space and, and how we’ve been dealing with some of the problems.
Charles:
That’s great. Awesome. So like you know, you’ve been involved with real estate for so many years, you’re a real estate investor yourself for many years. Can you give, just give us like what you would say would be common mistakes you see real estate investors make? And this can be from, it could be house hacking, short-term rentals. It could be what you work with now with your brokerage. I mean, what are these common mistakes that you’ll just see real estate investors make, whether they’re new or whether they’re experienced?
Austin:
Yeah, so the, the short term rentals and, and the commercial healthcare real estate are like very different beasts. Like, I mean, two different businesses almost, right? And so I’ll answer each of those questions. So the the, what I would say to the real estate investor who might want to, they’re just getting involved and they want to start with a single family, which is great. I mean, that’s how I got involved too with a single family is that you, it is really easy to underestimate how much time this is gonna take. You know, like if it’s like if you’ve got one location or one house you and you’re doing long-term rentals, you might not feel the time because it’s, maybe it’s a call once a month or whatever, but it’s also really hard to make money like cash flow right now based on interest rates and just the, the cost of real estate going up.
Austin:
So I think, I don’t think it’s a bad investment, but I think that, you know, you might be spending your time for free. And so I think it’s just important to be aware of the trade-offs. Like, you know, it’s almost like it’s bo it’s borderline worth it, right? To go out and look for an investment property just for the sake of like, you know, building monthly cash flow. I, I don’t know that you’re gonna accomplish that right now. Now if you own a property and you’re moving out, I think it’s definitely worth it to hold onto that property, right? And then go buy a new one. Like if you’re, if it’s your primary residence, hold onto that and then you could decide whether you wanna do shortterm rentals or long term rentals. But just be aware, short term rentals is a lot more time intensive.
Austin:
And so I, I think a lot of people just don’t understand the time trade offs that they’re making ’cause they look at the money and that’s great, but the question is always compared to what, like what could you be doing with your time or what could you be doing with your money that would make a better investment? Even like, even to like, when it comes to keeping your house or selling it, the question is, okay, if I sell it, how much capital will I have after taxes? Maybe, maybe you do a 10 31 exchange by buying a new house. So you have a little bit, but like the question is always, what could I be doing with the money? And so if like, the reason I like holding is ’cause you don’t have to pay taxes. So our strategy has always been hold and refinance. And so I hope that answers the question about what people are looking to get, like, advice for looking to get into it, especially on the residential on the commercial side, you know, I, I see people that are essentially waiting for these ma insane deals to drop into their lap, you know?
Austin:
And I guess like if you’re, at least, at least in terms of finding a building for your business, like a lot of times people will compromise the location of their building so that they can own it or they can get a good deal for it at the cost of their business and how much street visibility they have or how many new clients they’re gonna get based on how easily it is to get to their, their location or the proximity to other things that people go to, right? And so my advice there would be like, don’t compromise the location of your real estate so that you can own it. Focus on the building, focus on the location and your business first because you can use that money. I mean, people like, well often say to me, oh, I’ve been throwing money away, I threw away millions of dollars over the past decade or whatever, you know, and it’s like, well, did did you really throw it away because like, what would you have done with that money?
Austin:
You didn’t have to come up with the capital for the down payment so you could have invested that money in in something else that would’ve got you return. That’s the real question. Like what would that have down payment? What has that down? What would the capital for the down payment, what has that been doing? Has it been generating more or less of a return than you would’ve gotten if you put it into your building that you occupied? A lot of times it would. So I, I don’t think that like necessarily owning the building that you do business in is, is always the right call. So does that answer your questions? Yeah,
Charles:
That’s perfect. That’s a lot of great information. I think when you said before about people getting involved on the residential side, whether that’s long-term rentals, you know, short single family houses, long-term rentals or the, the short-term rental aspect of it I had a just reminded me that I had a mentor years back and you know, everybody talks about ROI return on investment. He would say ROT return on time. And if you actually start tracking stuff, I mean, you start seeing what you’re making and you’re like, wow, I make four or five times this at my regular job or whatever you’re doing. And then you realize, well, am I, is this just an investment? Do I really want to go into a, if this is just like an investment and I don’t really want to be a property investor, I’m just trying to get some passive income.
Charles:
But then it’s something like, maybe like you said earlier is you become a limited partner, you know what I mean? Or something like this. And you’ve realized that the time that you’ve spent say five hours reviewing a dealer, whatever it might be, and you’re getting returns for five years, you know what I mean, and you’ve really narrowed down that return on time aspect of it. And that’s a lot of, that’s a lot of great information there. So, yeah, the other thing too is like, I, I always cringe when people are always saying that if they’re renting anything, it is, they’re losing money. And you’re like, it’s not, you know what I mean? It’s, it’s like everybody has different goals and everybody has different things they’re working on. I think that why people always say, okay, your house for most people is the largest investment, right?
Charles:
And a lot of people, that’s where the majority of their net worth is, is in their house because it’s a required pretty much investment plan. You know what I mean? You have to pay that mortgage every month, right? And you’re, as you pay your mortgage, not counting any type of appreciation, you’re putting money pretty much in a savings account. You know what I mean? So it is a that equity as it builds, you know what I mean? So it’s like, I dunno, I just think it’s one of those things where it’s, I dunno, it’s people, different business plans, maybe it’s better to rent, especially if you’re starting a business. I mean, going out and buying a property, like getting involved with what you were in 2013, you know, you don’t wanna find yourself in that situation where you’ve probably purchased a property and it doesn’t work out, you know?
Austin:
Yeah. Yeah. I like, and then yeah, that, that comparison of like ROT return on time, you know, I think it’s always good for people to start as a limited partner. Like before I started syndicating deals you know, I was a limited partner. I, I invested in a couple different deals and just got to see, you know, how it worked and a little bit behind the scenes. And so that’s my advice too, is like you’re thinking about getting into it, find a deal that you wanna invest in and just invest as a limited partner, you know, and see, and see how that goes.
Charles:
For sure. So Austin, how can our listeners learn more about you and your business?
Austin:
Yeah, so I’m, I’m pretty active on, on LinkedIn and a little bit active on, on Instagram, but yeah, check us out on, on LinkedIn. So it’s just awesome, like a city hair, like on your head. Check us out on, on Instagram and you know, we post we’re posting stuff on there, on what, on what we’re working on all the time.
Charles:
Well, thank you so much for coming on and sharing your story and looking forward to connecting with you here in the near future.
Austin:
Okay, thanks man, I appreciate it.
Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.
Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.
