Jake Harris is the founder and managing partner of a private equity real estate firm that has managed, developed, and acquired more than $200 million in commercial assets under management in the last five years alone.
With nearly two decades of experience in real estate, construction, and investment management, Jake is a licensed California broker and a recognized expert in opportunity zones, infill development, construction cost-control systems, and the scaling of distressed investing business.
Today’s show is PART 2 of our conversation on all things commercial REI.
- Jake discusses how he realized that commercial real estate is more valuable and profitable than flipping residential properties while the amount of work for both was the same.
- He emphasizes why making bigger deals was more important for him than making more deals in order to scale his real estate business.
- He tells about the right structure and dynamics of investing, which will help in planning your deals, and also discusses why business plans are of utmost importance.
- He also talks about why big investors are aiming to crack big deals and how they are easily raising finance for it which is quite difficult for retail investors.
- He considers competition with these large institutional investors a big risk for your profile as their cost of capital is negligible and also have a smarter team.
- He describes the misconception many investors have about commercial real estate as they think it’s quite easy and not much work is required in this field.
- He solves the queries of many investors about what is a good commercial deal. He describes that there is not a single formula for everyone and different deals will be considered as good for different investors depending on many factors.
- He elaborates on the importance of value-adding on commercial real estate. This can be done by finding a tenant for your property and then advertising it with the seller’s permission.
- He discusses how marketing the property will help you to get your potential buyers and how the laziness of brokers can cause things to go wrong. So, finding the right broker becomes highly important.
- He talks through escrow and states that it will help you improve and learn to a great extent, more than what you will learn in schools or by reading books.
- He expresses his belief in real estate as he believes that every amount of money finally ends up in real estate as most rich individuals have invested there.
- He explains the term triple net lease which means that all the expenses except property taxes will be paid by the tenant. This will help the property owner to safeguard and manage his cash flow.
- He states that you can start investing in real estate even with zero money. He further gives an example of a 28-year-old kid who builds a 42-story condo project at this age to explain it deeply.
- He also believes that having trust in yourself and taking action is more important than just studying the market again and again.
- According to Jake “ You are the average of five people you spend the most time with”. He meant that a positive mindset is highly important.
- He explained that age is not a factor that can evaluate when you should start investing as he said “It has nothing to do with age”.
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