Intro: [00:00:07] Broadcasting live from the Business RadioX Studios in Woodstock, Georgia. It’s time for Cherokee Business Radio. Now here’s your host.

Stone Payton: [00:00:23] Well, welcome to this very special edition of Cherokee Business Radio, it is our inaugural Trusted Advisor series, and I can’t think of a better way to kick it off than to bring back to the Business RadioX microphone with Mike Sena advisors. Mr. Mike Sena, how are you, buddy?

Mike Sena: [00:00:41] I am great. It’s it’s a. So far, so good this winter.

Stone Payton: [00:00:46] I think it’s even better since we turned your headphones up. We just did a sound check before we started this and they’re like, Yeah, it sounds great. And then Mike starts pointing at me. So these are the things that happen when you do inaugural stuff, right? So before we dove into the whole conversation, Mike’s brought a guest with him, Jeff Snow. I get the last name. I remember that right before we get into that conversation, though, Mike, let’s remind the listeners, it’s probably been a while since you’ve been on air with us. What are you advising about man mission purpose? What are you out there trying to do for folks with your practice?

Mike Sena: [00:01:18] I advise people on managing their money, and the financial planning side of my business is quite crucial. I tell folks that I make my money managing money, but the value I bring is in the planning. And so we spend a lot of time building a highly personalized financial planning fee only practice. So I don’t sell insurance and I don’t sell securities. All I really sell is my expertize, my experience, my opinion, and I’ve been doing this for a lot of years. I like to tell folks I was fired from my first two jobs. I’ve been all my own ever since, so I’ve learned a lot about life, business and money over the years.

Stone Payton: [00:01:58] And now you took a little bit of a different approach, although I have seen it some, but it’s it’s a fee based approach as opposed to selling products and receiving a commission. Am I am I getting that right?

Mike Sena: [00:02:08] Pretty close. We’re actually fee only,

Stone Payton: [00:02:10] Which the only pure name

Mike Sena: [00:02:12] Is. The only income I get is when my client writes me a check and there’s different ways of doing that. But I don’t sell any products. I don’t make any money from the sale of a product or a transaction. I don’t get referral kickbacks. I don’t get kickbacks from mutual funds. It’s a very unique kind of one on one situation with my clients and to me, the beauty of this I have no other master to serve. Right now, I’m going to get on a soapbox here. But if you’re a banker, if you’re an insurance agent, you’ve got several masters to serve. One of them is a quota system. You’ve got to bring in the dollars or you’ll be shown the door. Aha. And I’m not saying it’s conflicts of interest, but it certainly is there. And with me, it’s just me and my client. No other master to serve alligator. I love it. I have so much fun with it, and I make a difference in people’s lives.

Stone Payton: [00:03:09] Well, everybody knows Mike it now. But was it tough in the early going? Was it because it strikes me that that would be a tough thing in the early going to get off the ground, a financial advisor kind of practice

Mike Sena: [00:03:20] Or you have no idea. And so most of my professional career, I owned the night business for a lot of years and people go, Well, how do you go from it to managing money? And it’s right. I was a business guy. I had a partner that was the it side. We had a great partnership, a great run, a great relationship. The company is still going, but it changed a lot. I just wasn’t having fun with it anymore. And I said, You know, this financial planning, I think I got ahead for that and I think it would be great. And it’s a couple of things I will tell you. You can’t get too much more intimate with your clothes on than actually talking about your money. It’s very deep for a lot of folks, and I tend to be what I call a left brain introvert. I’m really good technically with what I do, but there’s a lot of emotional aspects, and I’ve had to learn how to use the right side of my brain, how to listen and how to help people make the most of what they have. And I had a situation last week and it’s husband and wife. Longer story here, but basically the wife wants a car the husband doesn’t, and I know the situation pretty well.

Mike Sena: [00:04:34] But I think, you know, I think you guys should get the car. She goes, Yay. It’s just it’s a really interesting dynamic. And when I started off in the business, I wanted to work with younger, less or affluent people. And everybody told me that you never make any money with that. And I said, Watch me, and it turns out they were right. It was really hard to make money with younger, less or affluent people. There is a maturity level and there you have to reach a certain level. People know what they don’t know. And so there was a maturity thing, there was an income thing, and for a lot of younger people, it’s hard to justify to three point four hundred dollars a month for a financial plan or a financial planner. It’s not something you can touch. It’s not a life insurance policy. It’s not an annuity, right? It’s something a little more ethereal that unfolds over time. But honestly, it’s like compound interest. It works. And over time, you’d be amazed at what will happen to your life working with a family financial planner

Stone Payton: [00:05:43] And you keep your eyes open. You’ve got your your finger on the pulse of things you. You’re not locked into one set of strategies. What particular tactics? And I think today’s episode is kind of going to lean us into that because you have you’re really beginning to pay some attention to and try to help some of your clients at least understand and learn a little bit about this. This this area of commercial real estate.

Mike Sena: [00:06:07] Yeah, absolutely. I grew up in the real estate business. I love investment real estate, but I can tell you I never wanted to be a landlord. And being married, raising a son, having a business, it was only so much to go around. I love the stock market, but about a third of my clients, the bulk of their wealth is in investment real estate. Is that right? Either homes or commercial properties? I’ve got a client, in fact, that my guess is going to talk to next week who’s got an office building in downtown cortisol. They’re looking to sell. I just I love investment real estate, so let me tee it up with Jeff Snow. We’ve been friends for a lot of years. Jeff, you’ve been in the real estate business longer than you might like to admit, but 30 or so years, is that right? 1980 OK, yeah. So Jeff Snow was the man he’s been in commercial real estate, starting off in South Florida. Then you moved to Georgia. What about 15, 18 years ago?

Jeff Snow: [00:07:06] 2006?

Mike Sena: [00:07:06] Yes, OK. And you’ve been through. You’ve seen a lot that’s happened. Yeah. And one of the things I wanted to talk about is in my mind, there’s really three ways to generate wealth over time. The easiest is with the stock market 401k, that kind of thing. Next, easiest is investment real estate, putting some money aside, buying some properties, doing a little at a time and let it compound over periods of time. And the third way is to be a business owner, own your own business, and that is by far in my mind, the most difficult. Not everybody has a mindset or a head for that type of endeavor, but commercial real estate. One thing is I want to talk about Jeff is, where do you see? Opportunities in commercial real estate today.

Jeff Snow: [00:07:58] Well, thank you very much, Mike, and thanks for inviting me here. I really appreciate it. I’ve been in commercial real estate since 1980, and I started off doing what you were just talking about selling businesses. And you’re absolutely right. There’s a lot of people that really want a business. They have the money, but they don’t have the temperament for it because it does take a certain kind of person to have a group of people working for you all day long in one location. And that wasn’t really my forte, but I did do a lot of that in the very beginning of when I first started in real estate. I went to a small gathering one time and somebody gave my name to the gentleman that ran the Westinghouse division of of our real estate company down in South Florida. And he called me up, and we interviewed a couple of times and came to came to to an agreement that I would go to work for him and he would take me under his tutelage to teach me commercial real estate. I was extremely excited until they told me I wasn’t making any money unless I sold something, but that’s OK. But I got into the development of warehouses and shopping centers at that time, and the company was or is Westinghouse Communities West, the under Westinghouse commercial, and it was called Core Ridge Properties, and they owned a piece of property in the northwest section of Broward County, Florida. And with that, I moved there.

Jeff Snow: [00:09:35] And I’m trying to remember exactly, but in 1979, there were 37000 people there, and my job was to help develop the entire area. Today there’s over two hundred and twenty thousand people in the same large area. So we developed an industrial park and a couple of shopping centers that we built. Meaning the company built and I was involved in helping with that and then helping with the actual marketing of the properties too. So I was it was it was a great education for it didn’t cost me anything like the other education cost me, but I was so glad to be out of computers, mainframe operations and and programing that was not just didn’t work out for me, but I want to say one thing about commercial real estate. Everything starts with the land and all of you know, you just walk outside and look around and you’d wish you’d bought a piece of property that is now. Worth ten times what it was there, if if that even even more than that and I’ve been in Georgia since 2006 07 and when I when I came here and saw what Cherokee looked like, I loved it. It was a nice, small little community. There were some problems coming because 2008 hit and 2009 and 10 11. Yeah, and it it changed, but it was still a small community. And then as soon as we started coming out of the. Recession. It exploded, and it was really exciting. And then when that’s when I realized, Wow, I wish I had bought that piece of property back there on that corner.

Jeff Snow: [00:11:23] It’s now the church I go to. And it’s a huge piece of property, so everything starts with the land. If you invest in land, there’s it’s a long term. It’s usually a longer term use unless you’re going to be using it for whatever the use might be put in an industrial building on it or whatever multifamily. And you’re asking about, Oh, let me back up to the land thing for a second. You wanted me to tell you a couple of anecdotes, so I’m in the middle of selling properties and being involved in the development part of it too, but selling the properties to developers. Hal Wenzel, who is a very big developer in Israel, also in Long Island, decided to start building in Coral Springs, Florida. He bought a piece of property from me, and it was 17 acres, approximately. And that was right when we were going through our tree ordinance, and he could not get that land cleared for anything. It just took it was taking forever, I mean, months and months and months. Sunday morning, he shows up with a bulldozer by himself, and he took down every tree that he wanted to take down. Just gone. And of course, he ended up in jail, but that’s beside the point. He got rid of the trees he built the shopping center, moved back to Israel. I’m sure you’re very happy right now. But that’s a land deal right now is is a long term use.

Jeff Snow: [00:12:57] I mean, it takes a long time to get things develop these days. I’ve moved over to the multifamily business side of real estate commercial real estate. And when I say multifamily, everything four units above four units is is what I consider commercial real estate. And that has to be commercial loans, commercial development loans, et cetera. So I was involved in a lot of multifamily. You can imagine if we were jumping from 37000 people to what they had anticipated, which is about 100000. They were going to have to have a lot of housing. So in the interim there, for about two and a half three years, we sold close to 10000 units. So that’s a lot of pieces of property that have to be readied for development. And it was a very it was a really exciting time. It was fantastic. And Mr. Holliday bought a piece of property for me and happened to be in my neighborhood, not too far from me. And it was a good sized piece of property. It’s about twenty six acres. And his problem was they had a special little lizard, somebody at the EPA found on his property. Needless to say, they weren’t there on a Monday morning for some reason they were just all gone. Got the development done. But this is how these guys think they this is going to a let’s get it done and whatever it takes, they’re going to get it done. And they do.

Mike Sena: [00:14:29] Well, you have to. I mean, time is money. And so my dad was in commercial and industrial real estate and he bought or brokered primarily warehousing, and he would get a percentage, a small percentage every month for 30 years from that lease. And it funded his retirement. It really worked out quite well and reminded me of something I want to bring up to that might be of interest to people. A lot of folks want to use their IRA to invest in real estate, and it’s typically a terrible idea. You can expound on it, but there’s so many tax advantages to owning real estate depreciation and and the like. You lose all of that capital gains tax treatment inside an IRA, but raw land is a perfect example that you can use your IRA to purchase because there’s no depreciation on land, there’s no income from it. It’s it’s just a capital gain when you sell it at some point in time.

Jeff Snow: [00:15:28] Exactly. And if you wanted a retirement someplace and the Tennessee mountains or even North Georgia, you buy the property and you sit on it and it’s going to it’s in a majority of the time. It’s going to increase in value, and it’s just because there’s more of us people around that want the land. That’s it. It’s very simple. So the multifamily business was a was a very big business at that point, and my company called Ridge Properties. What they would do is to everything, to prepare the land, to build a building on it, and they made their money by doing it for single family homes. And it became a it’s a huge company still, and their single family homes division was not part of what we did. They already own the land where they had owned the land for years, developed it, and that’s what the single family came from. Then I once I got a little bit of the multifamily stuff done, we started building warehouses in the industrial park and it’s a light industrial park. It’s not heavy, meaning that there’s no major manufacturing. There’s no chemical off breed, no smoke coming out of anything other than maybe steam. But we built a fairly unique industrial part in that it was contained all in one section so that if you didn’t want to see it, you could drive right through the entire city and you’ll never see it if you don’t know where it is. And that was a that was an important point for the company because they did, they wanted to hide the what would be negative to to, they think, people buying it. Yeah, and they didn’t put single family homes anywhere near the industrial park. But it’s it’s almost fully built out now. And this has been in many, many years, but it’s a probably a three square mile area. So it’s a pretty good size, pretty good size, and it’s right up against the Everglades.

Mike Sena: [00:17:16] So getting closer to home? Yeah, where do you see taking place? You and I have talked a little bit about opportunities in northern Cherokee County, Pickens County, Dawson County being just slightly outside of where it’s super hot right now. You want to talk about that for a minute?

Jeff Snow: [00:17:35] Absolutely. I believe there’s there’s a lot of people. I just had a client. I luckily found him a piece of property in Cherokee County, and I say luckily, because it’s very hard to find what he needed in Cherokee. People are going towards Pickens, Gilmer, et cetera. There is a little problem up there. You know, there’s a very little water. They have to import their water or it has to be by well. So any kind of large manufacturing is not going to make it up there unless they figure out a way to to pump the water in. And that’s that’s a it is a problem for both Pickens and Gilmer County. Dawson County, I believe, does have access to Altoona, and they can get some water from it. They may even have their own reservoir that I don’t know about. Okay, interesting. Yeah, but I think the development up that way, first of all, it’s going to be mostly single and low multifamily to two, three or four units. But I don’t think you’re going to find a whole bunch of new apartment buildings coming out of the ground. They just don’t have the access, the capacity for it, and they went through a good recession with us, but they came out of it quicker because everything that they had was smaller properties. Industrial industrial right now is very is very big because people can’t find what they need. My client is in a four acre parcel right now down near Jamison Road. And he has he has 60 trailers, 60 and for four acres does not hold that much.

Jeff Snow: [00:19:08] So he has the rent property. So he’s creating this property in ball ground, and it’s going to be half of the property is his and then we’re marketing the other half for one of my favorite things, which is self storage. Ok, yeah, yeah. Self storage is a very interesting market. I met a guy, two people Bruce Manley and Buzz Victor Buzz. Victor wrote the book on self storage. They consider him the grandfather of self-storage development, and he did it all up and down the turnpikes in different places that they started. Now it’s become a huge industry. It’s a very different industry. There are no leases. It’s only you can only rent by the month. You might have an agreement for a year, but you can only rent by the month and the average person that goes into a self-storage, they visit it one time per month. How many just think about how many times an apartment with two people driving or three people driving, how many times they have to enter and leave is the maintenance is extremely low. The income is it’s not passive, but it’s pretty close to passive income because right now everybody’s doing it by credit card. Yeah, the to find the property for it to go on. Is easier than it used to be, because the the counties, especially up around here, are being pretty flexible about what they’re allowing. They allowed it in general, commercial a lot of places, they have to have an industrial land, but here is in general commercial.

Jeff Snow: [00:20:42] Mm hmm. But I I was involved with Buzz, Victor and Bruce, mainly in South Florida, and we found built sold 14 facilities. Wow. And a couple of those were. One was Miami Beach, where it was less than a three quarters of an acre. And it went up seven seven storeys high. Very. You have to be innovative and work outside the box. Another one that I sold. The guys had it was called store everything. They were right on Miami Beach, on the line of Miami Beach. They had a wine cellar. They had a place you could put your car into. That was a double concreted wall if you want. I mean, this place is close enough to the ocean that you could get some pretty nasty stuff with a hurricane, but they would store anything. And the one big thing that self-storage doesn’t like is chemicals, and they would store that so cool. And that is pretty much light industrial. And most of what we have here in in Cherokee County, up this way, Cherokee and and even over and foresight is light industrial. The heavy industrial there is some, but it’s few and far between. The crane company up on background on East Cherokee, is a huge industrial heavy industrial. They have they make their own cranes. They they weld it and put it together. And then there are a few others, but most of them are in light industrial, which is and it could be a huge organization, but they just don’t manufacture and create the problems that the EPA would not like them for.

Jeff Snow: [00:22:12] Ok. It’s hard enough as it is a lot of those industrial buildings now. Our distribution centers as Amazon built here in town. Fedex has them in town, in town, I mean, in the metro area of Atlanta. Huge one. Huge ups. Facility for distribution and all they’re doing is taking in something, possibly repackaging it and then shipping it out, and a lot of times they don’t repackage it, they just take it in and ship it out in a different way. So it goes through a big truck to the distribution, to a small truck, and that’s a huge thing around here. And if you know what the corridor is between Atlanta and and Charlotte, that I-85 corridor, if you drive up that corridor and you and you can look around, not where you’re going 90 miles an hour like you’re doing your BMW. But if you look around, you can. You can see some of the huge ore operations that are there. One of them is one of my favorites that you and I both know the gentleman that invented the electric nail gun. John Whiteside Rudder Yeah. And he the Ryobi factory up there is almost three million square feet. It is absolutely tremendous. It’s huge. And that’s not even the headquarters, but Brio is huge for Home Depot. Is there anything that I’m missing that you’d like me to talk about?

Mike Sena: [00:23:41] Well, we’re getting a pretty good overview. What I’m thinking is there are any number of opportunities. Yes. One of the things I want to talk about, particularly for clients that I would typically serve, that you might serve that Stone might know, is this Airbnb phenomenon. Short term rentals? Would you mind talk a little bit about that? What what do you see in your crystal ball?

Jeff Snow: [00:24:04] Yeah, we’ve talked about this before. Yeah, I have a couple of Airbnb’s and they they’ve worked out for me very, very well. But I am. I’m a control freak when it comes to that. So I know who they are, where they’re going, what they’re using it for, how long they’re going to be there. I’m pretty and I mean, over and above what quote Airbnb does and Airbnb is is just is the name of a company. But that’s where everything came from when they started doing couch surfing in San Francisco, San Diego, San Francisco. Yeah. So as in both of you, I’m sure have families or have been on a vacation where you’ve rented a house, rented a property, a condo, something that’s all it is, is is your your quote Airbnb experience is somebody may be doing it on a much smaller scale than having a huge condo building. My my dad lived off Fort Myers and we used to go down there to his place and we rented a two very large condos. We took over the whole floor with our family, about 40 people, and that was the same thing. It’s just that, just a different way of looking at it. One of the negatives of having a Airbnb and you didn’t. You do need to know what the negatives are, are people that are going to go in there and destroy it, or people that are going to go in there and have huge parties that they’re that they’re bringing in people that have no responsibility for what’s going on. And once you if you can control that and there’s a lot of electronic things that they have listening, they have a listening microphones that go to your phone so you can take care of it.

Mike Sena: [00:25:40] I’ve heard of that kind of stuff.

Jeff Snow: [00:25:42] Yep. Cameras and some of this stuff is what’s legal and what’s not legal. You have to look that up yourself. I, I tend to create my own rules as I go.

Mike Sena: [00:25:53] Well, you kind of have to. It reminds me my in-laws were very astute investors. They owned a quadriplegics down in marathon key. Three of the units were full time residents and one unit was short term vacation, whatever, and it worked out fabulously for them. There were they and another married couple owned the buildings, and they’ve owned it for years and it’s provided. Very reliable income, yeah, yeah.

Jeff Snow: [00:26:24] My brother and I own a unit down in Orlando, and probably 70 percent of the units are in a a weekly or a condo situation, not timeshare, but a condo type situation like what Airbnb would offer. And it’s a huge community. It’s big enough to have its own water park inside. And so, like I said, about 70 percent of the of the people that are that own units are use it for Airbnb and Airbnb. There’s probably 80 other different platforms that you can rent your homes through. Each one of them has their own little tweaking thing that they work, but it’s a fabulous business. It’s a great way to make some extra money. If you have a if you have a unit or a location that you can build up, a friend of ours found a place.

Mike Sena: [00:27:17] Regina Regina, I’m thinking about her. Yeah, she’s very astute.

Jeff Snow: [00:27:21] Yes, she is. Yeah, and she found a place and fixed it up and was using it for herself. And then she just started using Airbnb as it was very successful.

Mike Sena: [00:27:29] One of the things I’d like to talk about is. How do you finance this stuff? You know, we all hear the commercials. No money down. But we know that’s not really legitimate. What would you consider is reasonable? Do you go to a bank? Do you find private investors? Do you save up enough cash? You do it steps at a time. Well, what would be your advice for somebody looking to get

Jeff Snow: [00:27:52] Started up until we got in this conversation, till we got to Airbnb? Everything I’ve talked about is going to be basically a loan from a financial institution, whether it’s a bank or a credit union or a big enough property. In a lot of the apartments that I was talking about, they’re financed by insurance companies and the insurance companies do. If you’ve ever seen where their headquarters are, you can see why they have all the money. I’m going to take $10000 from you and I’m going to give you a piece of paper. And that’s it. Yes. Yeah. And I’m going to invest that. So where can you do the investments? It’s changed over the years. Those of you that are old enough remember savings and loans and savings. The loans were a great way to get an income loan for, for instance, a four Plex or a six Plex or whatever it might be that they they had their own limits they had. They also have their limits, as credit unions do today of the areas they can lend in. And so if you were if you were going to use the savings and loan credit union, that would be a great way of doing it because you become a member and the interest rates almost always are lower. Yeah. Same thing with a credit union. They’re not always lower, but a lot of times they are. But they’re their requirements are less. But they do hold the the loan within the bank. They don’t resell it. A majority of the time, I’d say 100 percent. So then financing right now we are using small banks. We don’t recommend people go to the big big five or 10, whatever the banks are.

Jeff Snow: [00:29:26] But we have some small banks that are working out fabulously for small offices. We are finishing an office project on Sixers Road and Main Street in River Park. We’re actually have one unit left out of 50 something units, and almost every single one of them in there are done by a small bank. Ok. And the bank will hold the paper, meaning they hold the mortgage. They don’t resell it. They don’t have to go out and get money. They have investors that put the money up. Then when you move into a larger situation, for instance, this this company that I have this buying the property up in ball ground, it’s a pretty big project, probably close to $5 million and they’ve gone to a company. I can’t say the name because I don’t remember the name, but they have. That company had to split it with another bank because it was bigger than what they wanted. But that happens a lot. I mean, in financing, they’re one of their biggest concerns right now is when can we close and is it going to be for? Is it going to be before the. Interest rates go up. Yeah, now every time the interest rates go up and you know this, you’re in the finance business, the amount of people that can do what they wanted to just simply by buying a home that gets reduced real quickly if it goes up a half a point. And they just can’t qualify for the for the amount of home that they have. And right now, I heard on the radio the other day, I couldn’t believe it. They said there’s only 9800 homes available in the Atlanta area.

Stone Payton: [00:31:00] 19:00 Oh, yeah, yeah.

Jeff Snow: [00:31:03] Do you? I don’t know if you remember ever looking at the sign in Marietta heading south on seventy five. And during the during 2009 2010, I would take my wife to work and was 110000 homes and call us now or whatever. I mean, that’s simply amazing. So the value of single family and multifamily is going to continue. I mean, it’s the value in my own neighborhood has been phenomenal. I just it’s really hard to believe how fast it’s gone up. And the whole idea of that is, as a finance person, Mike is to know when to get out. When are you going to sell the house? Because if you look at that curve of when it’s going up, when does it turn? Yeah, nobody knows when it’s going to go down again and when it gets at the bottom, when’s it going to turn back up again? People don’t know that. So it’s a roller coaster. So the financing part, you can also there’s private financing, a lot of private financing. People have money. They put it with people like Mike. They’ve created a nest egg and now they want to invest it in something. It might be a little bit more sketchy. It might be a little bit, not a Class A product, Class B, Class C or help somebody, maybe a family member put a put a project together that would either be an income project or possibly even for a business.

Jeff Snow: [00:32:21] And so financing is is an important way to go. And I know you’ve put together a lot of deals that were private financing, that people needed money to do something and you’ve made it, you’ve made it work for them and that that does work for the interest rates. They’re they vary from what, over from whatever. But if you go to a hard money lender, meaning you’re not going to a bank, but you’re going to somebody because you want to flip a house or you want to buy a house and fix it up, that interest rates are going to be very high, but it’s going to be a short term loan six months to a year, and you’re going to have to pay for the privilege of borrowing that money a couple of percentage points and then the high percentage on what the interest is. But it’s only for a short period of time till you can get the house back to what it is. And most of the time those guys are very savvy home flippers themselves. They know what’s going on,

Mike Sena: [00:33:12] You know, getting to that. One of the things I have learned over the years is, to a degree, no matter what you want to do, you have to have some experience. You have to have some knowledge. There are any number of things that can go awry that can go wrong and any kind of purchase. And I’d like to come back with also my favorite saying. We touched on a little bit, but I believe no matter what you’re buying, that the money is always made on the buy. And if you buy the property at a good price, chances are you’re going to do fine. Mm hmm. Real estate stocks there are longer term investments. This house flipping business, though it just it seems so seductive because you hear these people, they’re just making gazillions of dollars flipping houses. But I got to tell you, you got to have your act together really, really well, and you’ve got to turn that property over quick. And one of the things, particularly with stocks and real estate. Is you’ve got to keep your emotion out of it, it’s got to be a business transaction, start to finish. Yeah. How many times do you run into people that get emotionally attached to a commercial deal? It’s probably not as much as buying a home,

Jeff Snow: [00:34:20] But I had I had. I’ve had two partners that I flipped homes with the first one. Great guy. Cold is a fish that we would. I mean, he could have three babies. A woman holding three babies crying and he would kick them out of the house. Yeah. The second one, just a little bit of a it doesn’t even have to be a tear. And he bends. Yeah, so there’s different personalities on both ends of that. Yeah. But if keeping the keeping the emotions out of it is very important, you have to know what your numbers are now when you’re buying a house. And all of us here you married.

Stone Payton: [00:34:58] Yes, sir. Yeah, all of us here. Otherwise I wouldn’t even get to be here.

Jeff Snow: [00:35:03] All of us are either married or we’re married and know that we’re not the ones that are buying the house. It’s really the wife. Look at these faces, and that’s an emotional decision. Now the bank is going to decide how much you can put up, how much house you can buy. But if if she doesn’t like it, if the kitchen is bad, if the bathrooms are bad, I mean, unless she’s an investor and I was very lucky that my wife’s an investor, she she used to flip out, she used to build them herself. And so when we went to look at a property, we owned a number of properties. When we went to look at a property, she’d have that in her head of what the property’s going to be worth at the end. But keeping the emotions out of it for like an industrial property or retail property, et cetera, is very important. I didn’t get to retail because I worked for after the. My time with the court properties, I went to work for retail companies. I’m sorry. Yeah, well, these are no, these are not. I wasn’t on the in the store stuff. I hear

Mike Sena: [00:36:12] You. But even so, there’s that’s a different mindset in retail.

Jeff Snow: [00:36:16] Oh, definitely. Definitely. Yeah. Very, very, very different. And I worked for two, three very large companies. One of them was priced legacy out of San Diego. The other one was Kim. And the other one was Conover out of, well, actually, they’re out of Boca Raton, and all of them had started in unique ways. Mr. Conover was a. Refugee in World War Two, he had fought for the Polish in World War Two, and he came over, he and his brother bought a motel, fixed it all up and marble floors, they actually were tile layers is what they did, tile or floor layers, whatever it was back then. And he owned about 20 million square feet of property, but he never sold the hotel. He always held on to the hotel. Yeah, very, really nice guy. Absolutely. I had no vices whatsoever, not women, not smoking, not drinking. But he could gamble half a million dollars in the Bahamas in one weekend, easily the nice guy. But he could do it. But you could offer him a bet on anything that was. I always thought that was great. But retail is is huge.

Jeff Snow: [00:37:28] Obviously, that’s where we buy our groceries. That’s what we go, get our clothes. That’s where we get a number of things that even like a cup of coffee or would what would be a McDonald’s or most? Most cantina. So the the big boxes is what I had started with, and I would find tenants. Negotiations are long and tenuous. Leases are huge, but the tenant moves in eventually and creates a store and hopefully that the market is going to maintain that they do so much research up front. So if you know that there’s a public schooling in someplace and you can buy property near it, buy it because they have they’ve put in hundreds of hours, thousands of hours of time to make sure that that property is going to make it. So the retail has been has always been very big. I’ve done a number of retail transactions. It’s it’s an excellent income. But as you say, it can be very fickle too soon. As you start taking a downturn in the market, it’s going to be one of the first things that goes down in retail.

Mike Sena: [00:38:39] I’m thinking of one of my favorite stories, I actually chronicle that in the book I wrote several years ago. I don’t remember the name of the guy who’s a great guy, and he immigrated to Canada years and years ago. We really had nothing and he was working, I think, for either General Motors or Ford outside of Toronto, and there was a vacant lot next door. And he was thinking to himself, I bet that General Motors, for whatever they’re going to need this for parking or something down the road. And he just kind of put together he and his brother bought this property. They waited a few years. Sure enough, GM bought the property and that got him started in the real estate business. And you start off small and you just keep building it like any other endeavor. And the point of the story was, fast forward, I guess, to the 70s or 80s. He was vacationing at home in Greece. His son gave him a call, said there’s an advertisement in the paper. They’re trying to sell the Pontiac Silverdome. What do you think, dad? They ended up. They made an offer on it and they bought the Silverdome. They was going to repurpose it for soccer and MMA and how you say the car shows and stuff. It’s amazing how some people see value were. Nobody else. Does I need to follow back up on that story to see how that really worked out for him? Because I know it didn’t quite work out the way he thought, but he got a fabulous deal. Well, the Pontiac Silverdome, so you just never know. You start small and you keep building and you learn it’s a it’s a fabulous way to generate wealth.

Jeff Snow: [00:40:18] Absolutely. And you’re you’re you’re right. As long as you can keep that momentum going and keep looking at new stuff and don’t spend all your money. Yeah, I think I’ve got the guy’s name is a Rod Carew. Is he the tall baseball player? Yeah. Okay. So Rod has always been. It was taught when he was a kid. I saw an interview. He did always have two incomes, put one away and use the other one when he was in playing baseball. He never touched the money in baseball. Other than to put it in investments. He started out with one duplex. When I saw the interview, probably three or four years ago, he owned over sixteen thousand apartments. Wow. Worldwide, nationwide, and when I say he owned, he was. He was the major shareholder and he took. He took one of his incomes and always put it away for investment and the other one he lived on. That’s I mean, that’s if you can do that. That’s fantastic.

Mike Sena: [00:41:17] Kind of reminds me another one of my favorite little sayings. You can divide people into any number of groups, but one of my favorites is two types of people those that think about spending money and those that think about making money. Yeah, and it’s an entirely different mindset. If you want to generate wealth over time, you want to be thinking about How can I make money? How can I invest money? How will this look ten years from now, right?

Jeff Snow: [00:41:44] And it’s you have a. Well, when I met you, you had a 13 year old and I have a number of children. Sometimes it’s hard to get them to understand. It’s got to be four down the road you can’t think of right now. What are you going to do to go out and party? What are you going to do down the road when you when, when, when you get to my age and you want to slow down a little bit, you might not be able to it. And yeah, but that’s up to you. One of the things I wanted to get into was net leases.

Mike Sena: [00:42:12] Yeah, tell us about that, please.

Jeff Snow: [00:42:14] Net lease is I’m going to use an example of a Starbuck. They build a Starbucks down on Highway 92, and it costs them two and a half million dollars to build it. They will open it up as a Starbucks. They will make sure that it’s a successful Starbucks. There’s different timing that people hold on to it, but typically a year to two years. And then they will go to the market and say, I will sell this Starbucks building to an investor, and the investor is going to pay X amount of dollars for two point five million, whatever it might be. And he is going to get a return of whatever the cap rate is. So if it’s a higher cap rate, he makes more. If it’s a great area and they know they’re going to be getting a lot of business, the cap rates a little bit lower. What’s the cap rate? Cap rate is when you take the income, the and take away the expenses and how much money you put into it and what is going to be your return. Ok, so it’s basically the return. Yeah. And if you almost any place you go to, if it’s got a large big box in it, for instance, Kohl’s and what’s the store next to them? The Old Navy? Ok.

Jeff Snow: [00:43:22] Both of those are freestanding buildings, even though they don’t look at their freestanding buildings and they’ve sold those to the market. So probably 10 to $12 million. They sold them to the market. The market means somebody bought that building. They have nothing to do with the. They can’t the only thing they can do is they have to maintain the building, they have to maintain the roof and not the doors, but pretty much the rest of the building. And by doing that, they’re going to get a very nice return on their investment of whatever, whatever, whatever it might be, five percent, six percent. And it’s a pretty solid return because even if the company, which a lot of people understand this, even if the business has decided to close that store, they’re still paying the rent. So you’ve seen a lot of especially Walgreens, CVS and Rite Aid that they’ve contracted recently. And so a lot of vacant stores, well, the company, Walgreens or whoever it is, is still paying the rent, the rent, and it sits vacant, typically until it almost runs out, unless somebody is willing to step up and purchase that

Mike Sena: [00:44:30] And repurpose it for something else. Exactly. Going back to what an individual sees that nobody else sees.

Jeff Snow: [00:44:36] Yeah, exactly. Yeah. And they work. They work at the corner of in crabapple. They took an old Walgreens and they made it into. What is the hardware store? It’s like, oh,

Mike Sena: [00:44:50] Urban hardware, urban

Jeff Snow: [00:44:51] Hardware. That’s you. Yeah, that’s urban hardware. And that’s right, it’s in the silos. Yes. Yeah. And so that’s a ten ten to fourteen thousand foot building. And now they could be leasing it from the owner, but more than likely they bought it and they’ve done the same thing. They flipped it to another investor because urban hardware is going to be around for a while, and that makes a big difference to me. Even Home Depot’s Lowe’s, all of the stores that you think about, almost all of them build it like that. So they’re built for, especially Wal-Mart. Wal-mart builds everything for cash they don’t put, they don’t take any financing. They don’t have to. They just wait one day and they can collect enough money to do that, but they’ll build it for cash and then they want to take their cash out and go to build another store. And investors are standing in line for those kind of deals because they’re solid. They’re not going anywhere. I moved here when the one on 92 in trickle mode opened up. Ok, yeah. And I happened to meet the investor that was doing it. He was just smiling ear to ear. He just said he was doing. He was going to be doing great.

Mike Sena: [00:45:56] Well, once again you start small, you learn, you keep rolling it over and investing and buying a little more, a little more. Right. And next thing you know, we’re talking about real money. Yeah.

Jeff Snow: [00:46:07] You asked me to to. What is Nostradamus to? Predict, yeah, predict what the market’s going to do. Yeah. I know about as much as you do, Michael, and, you know, more than I do much more. We’re quite frankly, with this company that I’m with now, when we’re developing, we’re being brokers, we’re looking for opportunities, land and purchases. We’re looking at six months down the road. We actually put together a plan for six, six months, three years. And some of this came to get most of this came together after the last election. We don’t know what’s going to happen. We and I mean, obviously with a with a war that just started, yes, it was yesterday or the day before. Yeah, it could change everything literally could change everything. Somebody gets stupid and they push their finger on a certain button. I mean, we don’t know what’s going to happen. So that’s why we’re looking at six months down the road. We’re not we’re not going that we’re going to buy a piece of property and know that we can we can build on in three years. We’re not doing that. We are we are hedging our bets that do as much as we can right now in that period of time. And you know, we could go out of year, year and a half, but we’re right now every six months, we’re looking at that. And if we’re going forward, we’re just extending that three year thing. Interest rates this week, this as a Monday or whatever day they’re meeting is going to go up. What a half a point,

Mike Sena: [00:47:44] Maybe a quarter or half a quarter to a health kind of ladder all the way up the line? Right?

Jeff Snow: [00:47:49] But exactly. And that’s the bank rate, but it’s still going to go up the line.

Mike Sena: [00:47:54] Yeah, they’ve got a we could really go way out here, but they’ve got a very interesting mandate the Federal Reserve. There is an election coming up. They are, to a degree, somewhat political. You never know what they’re going to do. They signal this. They signal that they talk in terms that really nobody understands, right? It’s. Now we’ve talked enough stone, right? We’re living in the Twilight Zone. This is there’s so many things that’s coming so fast, it’s hard to process. But what I come back to again is land is always going to be with us and commercial real estate. There are ups and downs, but if you can weather the storms, it’s a great way to generate wealth over time. Yeah.

Jeff Snow: [00:48:40] And if you pay attention to what Georgia Department of Traffic does and you see and you can look out what their three year plan is, yeah, you can get a pretty good idea or an idea. And that three year plan almost never is going to be what they’re going to be building. But that three year plan is going to tell you where the corners are going to be, where the area is going to be for retail or industrial, whatever it might be. But the same thing we did in Florida with the Florida Department of Transportation. They know what’s going to be happening because they’ve got the mandate that it has to be done down the road has to be done today for down the road. I mean, look at what our traffic is. I live out where you used to live in hickory flat. I mean, the traffic has just gotten. So we used to be able to pull up to our egress where where we’re leaving the our subdivision and just kind of glide through and go, Oh, you run over by two 18 wheelers, you try that today. Our dump trucks actually dump trucks, so it’s somewhat related.

Mike Sena: [00:49:45] This was interesting. I have cousins from Connecticut that were visiting earlier this month. He’s in the construction business. He’s semi-retired, he’s a finished carpenter. We’re driving around and their eyeballs were popping out of their heads, they’re from Connecticut, there’s nothing going on in Connecticut and we’re building on every street corner Woodstock, Cherokee County, Buckhead, Midtown. The South is cooking, it’s on fire and I don’t see any substantial. Roadblocks other than, of course, the vast unknown. There’s just not enough. Single family homes, multifamily homes, industrial parks to satisfy buyers right now, I see this train going a number of years into the future.

Jeff Snow: [00:50:34] Yeah, and you’re right. Listening to prognosticators of what’s going to be happening in multi and single family multifamily there, just the increase might not be the 16 percent of what it was last year, but it’s going to keep going up. There’s just not enough housing. This has got nothing to do with what happened in 2008 and nine, right? Nothing at all. Yeah. And it’s the the and that housing, it’s housing ahead of commercial right now. A lot of times it’s commercial ahead of housing, it’s going to come where it is. But right now it’s housing ahead of commercial. So wherever you’re putting the housing, that’s where the commercial is going to show up eventually.

Mike Sena: [00:51:09] All right. So I just have a question, an engineering question just popped into my head. You’re welcome St. to participate. I don’t know. I just got back from Florida. I’m driving down I-75 to the turnpike and right at the turnpike and seventy five is the villages. Yes, which is one of the largest planned communities on planet Earth. They are building thousands of single family homes, both sides of the turnpike. And I’m wondering the engineering aspect and the planning to get the water in and the sewage out and the infrastructure, all of that stuff. It’s mind blowing to me.

Stone Payton: [00:51:47] Well, I can give you a little bit of a tertiary perspective on this, my brother is the CEO of the Florida Homebuilders Association. Wow. Now, Rusty cannot drive a nail. He don’t know anything about building a home, but he spends his time and his staff spend their time in the the political arena trying to get things passed, trying to block this, you know, pass that. And there’s a lot of it has to do with engineering everything from septic to the flow of water. And that’s a full time job for he and his staff to try to get. So that’s that’s all I know.

Mike Sena: [00:52:24] Wow. It just it kind of mind boggles me a little bit. But once again, with all of this development taking place there, adjacent properties got to be pretty good investments. Getting back to we all wish that we’re standing on a piece of property. I wish I’d have bought this one. I had one of my favorite stories. There’s St. Joseph’s Hospital, which is at four hundred and 285, its big, gleaming structure. My dad, I’ll never forget he was saying, you know. We were hundreds of dollars apart, an acre on this island, hundreds of dollars, hundreds of dollars, it’s millions of dollars an acre now. It’s all about timing, it’s all about the numbers, but it’s also about having a little foresight and seeing what’s possible.

Jeff Snow: [00:53:14] Yes, in the villages, I have a couple of friends, one just moved there and one’s been there for quite a while and I was speaking to Frank when he visited up here. They’re just finishing their 81st golf course. 81, Golf 81. They’re just finishing it. That is. It’s amazing. Can you imagine you’ve been in there?

Mike Sena: [00:53:35] Yeah, I’m not. No. It’s a it’s a treat.

Stone Payton: [00:53:39] It’s probably worth an excursion just to go hang out, right? It is.

Jeff Snow: [00:53:42] I would love to have the golf cart franchise for them.

Mike Sena: [00:53:46] Yeah, the the bridge going across the turnpike is a golf cart only, I believe.

Jeff Snow: [00:53:50] Exactly. Yeah, wow. And the they have their own sewer treatment plants, OK? They were required to do that. One of the positive things about that, and you’re probably your your brother knows about this is they built it and I’m not sure they meant to built it right on top of the aquifer that runs north to south in south in Florida.

Mike Sena: [00:54:12] I was wondering about that.

Jeff Snow: [00:54:13] Yeah, yeah, I mean, they’re in the Everglades. I mean, you just hang out there the way you find out, let’s go there in June and just don’t put any bug spray on it. You’ll find out they are in the Everglades, but that aquifer goes right underneath so they can get plenty of water into how they how they.

Mike Sena: [00:54:33] Protect it and it, maintain it still. Yeah, probably weightier questions for another day.

Jeff Snow: [00:54:39] Yes. And they’re probably making enough money that they can figure it out themselves.

Mike Sena: [00:54:44] One of the things I wanted to try and accomplish with this conversation is to encourage people to keep your minds open and to have an imagination. You just never know how a property can be repurposed or can fit in with your long term investment objectives. I love the stock market, but I love real estate too. I got a client in Hilton Head. Longer story here, but he is going to buy some property for friends of his to run a bar. And I said it’s. Go for it. He’s got to own the property. He’s going to be the landlord. He’s not going to be a bartender. He’s not going to be in the restaurant business. He’s going to be in the landowning business. And it’s a little town called Bluffton, which Jasper County, South Carolina, fastest growing county in South Carolina. Bluffton is in my mind. I like like Woodstock. They’re doing a lot of things great. I just I don’t see a lot of risk for him, and I see another income stream, which is what he needs is three or four income

Jeff Snow: [00:55:44] Streams, which we all do, right?

Mike Sena: [00:55:46] We all do. Yeah. So the more income streams you can develop in your life, the better off you’re going to be. Which reminds me another person that you and I both know Chris Myers. Yeah, a chiropractor in in Canton. I don’t think he would object, but he owns his office building. But he bought some property in Pickens County, and they’re building a house up there. They’re going to sell the bridgman house and he is going to have either goats or sheep. He’s kind of have some kind of blueberries, I think, and then they’re going to do either glamping or a little Airbnb type things on the property. It’s going to have about four or five different income streams. Brilliant, man. Yeah. And these are the kind of things that you want to think about us. Have an open mind. And Jeff, how can people reach you if they want to learn more?

Jeff Snow: [00:56:34] Well, I’m with path and post real estate. It’s located here in Cherokee County. My phone number is nine five four two one four zero five three six. That’s the first cell phone number I ever had, and I’ll never remember another one, so I kept it all this time. And very simply, Jeff at Path Jpost.com.

Mike Sena: [00:57:02] All right, cool. And you’re happy to have conversations with people that want to learn about how they can get in, get into real estate, get started with real estate.

Jeff Snow: [00:57:11] You and I are both in Toastmasters. Yeah. One of the reasons I got into Toastmasters is I would go around to real estate offices and I’d explain to them what Coleridge Properties does and explain to them that, you know, we own all the land, we develop it and any questions you have give me a call. My referral business skyrocketed after I did that because most people, most real estate agents, don’t want to do commercial. It’s a different animal. It’s totally different. And I’d be more than happy to answer any questions anybody has, even if it’s just a question has nothing to do with what they want to do. I’ll be happy to answer it.

Mike Sena: [00:57:48] Sounds great, stone.

Stone Payton: [00:57:50] Well, this has been fantastic, so informative for me because Holly and I have kind of reached that point in our lives where we should be exploring something like this and we should be getting expert counsel from people like you and Jeff Snow. So this is what a marvelous way to spend a Friday morning. Let’s make sure that we leave our listeners with your contact info to whatever you think is appropriate. Linkedin website, phone, whatever, whatever.

Mike Sena: [00:58:14] Mike S. Advisors. Mike Mike Seena Advisors were the only certified financial planners highly personalized. That’s the best way to reach me. And Jeff, thanks for coming on. This has been a delight. And I’ll say again, I grew up in the real estate business. I love it. It’s a great way to generate wealth over time.

Jeff Snow: [00:58:38] Yeah, and I appreciate it. Michael, thank you very much for inviting me. We’ve talked so many times over the years about different things, and this has been exciting. I really enjoyed doing it and I’ll be happy to help anybody that wants that.

Mike Sena: [00:58:49] Sounds good.

Stone Payton: [00:58:51] All right. Until next time, this is Stone Payton for our host today, Mike Seena, our guest Jeff Snow and everyone here at the Business RadioX family saying We’ll see you next time on Trusted Advisors radio.