The Optometry Money Podcast Ep 108: Navigating Commercial Real Estate Decisions for Your Private Practice with Colin Carr
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In this episode Evon is joined by Colin Carr, founder and CEO of CARR to dive into lease and purchase decisions for your optometry practice real estate.
We dive into what to look for in a location for your practice, negotiating points for a lease, how to prepare and plan for a lease renewal, when to lease vs. purchase the commercial property, and so much more!
Have questions on anything discussed or want to have topics or questions featured on the show? Send Evon an email at podcast@optometrywealth.com.
Check out www.optometrywealth.com to get to know more about Evon, his financial planning firm Optometry Wealth Advisors, and how he helps optometrists nationwide. From there, you can schedule a short Intro call to share what’s on your mind and learn how Evon helps ODs master their cash flow and debt, build their net worth, and plan purposefully around their money and their practices.
Resources mentioned on this episode:
The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.
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Episode Transcript
Episode 108 Transcript – Navigating Commercial Real Estate Decisions for Your Private Practice
[00:00:00] Evon: Hey, everybody. Welcome back to The Optometry Money Podcast, where helping OD’s all over the country make better and better decisions around their money, their careers, and their practices. I am your host, Evon Mendrin, Certified Financial Planner(TM) practitioner, and owner of Optometry Wealth Advisors, an independent financial planning firm, just for optometrists nationwide.
[00:00:26] And thank you so much for listening today. And we are back and it has been. Quite a long time since we put out a brand new episode.
[00:00:34] It’s just been one of those seasons. One of those times lately, where we’ve had to dedicate all of our time and attention to, um, serving the current and new families that we are fortunate to serve in our practice. So.
[00:00:45] In light of all of that, we just had to take a little break from the content creation. But we are back and I am excited for this episode today. In today’s episode, we have Colin Carr, founder and CEO of CARR, which specializes in commercial real estate for healthcare practices. We dive into. What practice owners should look for in a location. Especially thinking about a cold start, looking for a location for the first time. What to keep in mind when negotiating a lease. How to navigate a lease renewal, which interestingly is actually a really important planning point with a whole lot of opportunity and how to decide whether to lease or buy a commercial property for your practice and so much more and this was a fun conversation. I think you’ll be able to take away a whole lot from it. If you have any questions, you can send me an email at podcast@optometrywealth.Com. And you can also actually text the podcast now. Uh, if you go to the show notes, there’s a link at the very beginning of the show notes, you can click on that.
[00:01:46] It’ll open up a text message. And you can send us a message. Now we can’t respond, right? So it’s not a two way conversation, but if you have thoughts about future topics for future episodes, or if you have questions you’d like to get answered on a future episode, maybe we’ll do a mail bag episode here and there. Um, you can go ahead and send us a message through text as well, just as you click on the link keep that initial text in there that pops up. So that it goes to our inbox.
[00:02:13] So a new feature we’re trying out, hopefully it will be useful.
[00:02:16] You can check out all of the links and resources we mentioned in the show notes, which you can find out on our website at www.optometrywealth.Com. And while you’re there, feel free to check out all of the other resources and links and episodes we’ve done.
[00:02:30] And of course you can also schedule a no commitment, introductory call. And we can talk about whatever’s on your mind financially, whether it’s real estate related or not. And we can share how I help optometrists solve those same financial questions, n navigate those same financial questions, all over the country. And without further ado, here’s my conversation with Colin Carr.
[00:02:58] Welcome back to the Optometry Money Podcast. I’m your host, Evon Mendrin. And on today’s episode, I’m excited to have onto the podcast, Mr. Colin Carr, founder and CEO of CARR. Thank you so much for, for coming on.
[00:03:12] Colin: Yeah. Thanks for having me. I appreciate it.
[00:03:14] Evon: Yeah, I, I’m ex, I’ve been thinking for a long time of having a. Podcast episodes specifically for commercial real estate, topics for, for practice owners, because I just, in my own conversations with clients, real estate’s coming up a lot, whether it’s as an expense, as a lease payment on their profit and loss, whether it’s decisions about buying properties, buying second properties. And so I wanted to have you on to talk through A lot of different topics around leases, around searching for locations for, practice real estate, buying versus lease decisions. So I, I’m excited to, to dive into a lot of, a lot of really interesting things. But before I dive into all that fun stuff, I did want to just get your background, talk to me a little bit about your background and what led you to start Carr and, and tell me a little bit about your, your work and your business.
[00:04:07] Colin: Yeah, absolutely. So I took a,a route outside of college. I started working when I was 19 and one of my first jobs was, was managing properties. really enjoyed real estate. So I kept at it for a few years. I was back in Michigan at the time, now in Colorado, moved to Colorado after a couple of years of doing that, kept managing properties.
[00:04:25] I got my broker’s license when I was 22 and I started working for a guy that did. Wallmarts, Wendy’s, Blockbusters, like large national retailers. And I really enjoyed that over the course of a number of years of doing brokerage, I got introduced to healthcare medical real estate, started working for some landlords.
[00:04:43] And, you know, the long story short there is, I was a landlord agent predominantly for some of the largest medical landlords in the country. And I had a series of transactions that I was involved with where the doctors had no representation at all. Like they had, they had no one helping them. They were just, they were taking the do it yourself approach.
[00:05:05] They were fumbling through new leases, lease renewals, expansions. And I had a couple deals specifically that really stood out to me where the doctors lost several hundred thousand dollars in each transaction. And they had no idea what’s happening. And so, you know, they were over market on their lease rates.
[00:05:23] They weren’t competitive with, with their operating expenses as far as how they’re being reconciled and charged. They weren’t going after build out allowances, free rent periods. They weren’t going after renovation allowances. They, I mean, they had all these different things they were missing. And they just blindly walked into these deals where the landlords literally made 500, 000 more on their lease than they should have if the person was represented.
[00:05:50] And so after having a couple of those deals, you know, go down, I just realized like, look, this is not a fair fight. And these are incredibly intelligent people. They care about their communities. They care about helping people. They employ people, they touch thousands of patients per year, but they’re not equipped to handle these high dollar negotiations with ultra sophisticated, ultra professional landlords who also have brokers and representation.
[00:06:17] So, I just, I saw the need for it and I founded the company. shortly after that, it was the beginning of 09, we’re about 15 plus years in now and we went from being just Colorado to now we’re coast to coast. We’re licensed in all 50 states. We have, just under 6, 000 clients that we’re doing real estate services for right now as we speak.
[00:06:37] So anything with real estate, whether it’s a, a startup, a new lease, a purchase, expansion, lease renewal. If you want to buy. land or buy a building anything with real estate we help with and you know our tagline is Maximize your profitability through real estate and the idea is very simple It’s it’s you can either capture or you can lose a couple hundred thousand dollars on every deal In addition to your time in addition to pitfalls and delays and complications But financially there’s a couple of thousand in the line And so our game plan is to help our clients capitalize and capture that And just make sure that they’re not taken advantage of the way that, you know, the way that they typically are, if they don’t have a strategy and have professional representation.
[00:07:17] Evon: I’m curious, what is different about, cause you, you do have a focus again on healthcare, right? And so what is different about a company or a representation or real estate professional that focuses specifically on healthcare versus, you know, any other realtor? What, what, what are some of the differences that we should keep in mind?
[00:07:35] Colin: Yeah, so, you know, the first one is you’ve got commercial versus residential. It’s the same license. So if you’re a licensed real estate agent or broker or licensee, it’s different terminology in different states. But there’s only one license. And so, you know, unlike, you know, if you’re a dentist versus an optometrist, it’s a different license.
[00:07:53] You’d say, well, hey, I’m a doctor. It’s a different license. In real estate, it’s just one license. So you’ve got people that they specialize in residential. They have no clue how to do a commercial transaction and vice versa. So that’s the first one. The next one is, once you get inside of commercial real estate, there’s a lot of sub specialties or niches that people work in.
[00:08:11] Like, there’s agents that all they do is, you know, like, large distribution industrial. That’s very different when you’re dealing with, like, loading and clear heights and power, and how close to a rail line are you. Like, that’s a whole different transaction than doing an optometry space. you have, you have agents that all they do is work on selling apartment complexes and they have no idea what’s going on in healthcare.
[00:08:32] And so, you know, just like you can say, Hey, I’m a chiropractor, I’m an optometrist, I’m a physical therapist. They all went to undergrad, they all went to a specialized program. They all call themselves doctor, but there’s differences in what they do and why patients are coming to see them. And, you know, they might have a general knowledge in certain other areas, but it’s very, very different as far as how the deals are structured.
[00:08:54] You know, what’s important, you know, if, if you’re dealing with a, a dental space as an example, you know, the cabinetry in the millwork and where it’s placed and, and where the, the plumbing and the airlines are, that stuff’s very, very important. And if you. You know, if your cabinet or your delivery system is off by a couple inches, that dentist is hitting his elbow or arm on a delivery system or a cabinet every time they go to touch the patient or, you know, you think about people like natural light, well, if you’re an optometrist, you don’t want your exam lane having natural light or you have to block it out.
[00:09:29] Well, people don’t think about that. They think, well, yeah, the more windows, the better maybe in the optical area, but not, you know, not in the exam lane. So there’s just, there’s differences with, with how each practice, you know, has their layout, ergonomics, what’s important to them, the parking, you know, the neighboring tenants, those are all things that are very different.
[00:09:48] If you’re a CPA versus a healthcare provider, approximately the hospitals, other providers, competitors, you know, how capitalized is the landlord? How much money can they put into the deal? There’s just things that are very different if it’s a restaurant versus a repair shop versus a healthcare provider.
[00:10:05] So The answer is anybody can do a deal. Like there’s, there’s one license. You can do whatever you want to do. but just like if you’d have malpractice and medical, you can have malpractice in real estate too. You get someone who has no idea how to do that type of deal. They can mess it up pretty bad.
[00:10:19] You can fix some of the things, but you know, you signed a bad lease for 10 years. It could cost you literally a half million dollars that you should have avoided. if you had a proper representation and a real strategy.
[00:10:30] Evon: Yeah, I can definitely appreciate the, as someone who built a financial planning firm to serve optometrists, I definitely can appreciate the, the importance of having someone that specializes in the unique needs of that optometry business. You know, you mentioned the windows and the cabinetry, all stuff that I probably really wouldn’t think about, right?
[00:10:48] Unless you’re doing a lot of those, a lot of those for very similar clients, very similar, very similar customers. So I definitely can appreciate that, that expertise you have.
[00:10:59] What should practice owners look for in a location?
[00:10:59] Evon: And let’s, let’s dive into if, if there’s an optometrist looking for a location, looking for the location of a, a building, really looking for a location of a lease.
[00:11:10] And what I have in mind is maybe a cold start practice, right? They’re looking for that first location or maybe, a practice owner’s looking for the, the location for their seconds, second practice location. What are some of the things that, that optometrist should keep in mind when trying to find that ideal spot, that ideal location?
[00:11:30] Colin: Yeah. You know, I think the first thing is, you know, narrowing down to some of the requirements, like what’s the approximate score footage? what’s the approximate area? Is there a certain sub market or, or intersection or location that you want to be, you know, in or nearby? So we’re taking some of the larger parameters and then we get into concepts like, you know, you mentioned the lease, you can talk about leases or purchases, but if we focus on leases, you know, do you want to be in retail space?
[00:11:54] Do you want to be an office space? Do you want to be a mixed use space? You know, what’s important to you? And typically our recommendation is let’s look at everything that makes sense for your practice. Like let’s not go look at an industrial building that’s 10,000 feet if you need 2,000 feet, but let’s look at office versus retail.
[00:12:10] Like let’s look at leases and let’s even look at purchases because there might be a scenario where buying the real estate could actually be more favorable. or even cost you the same or less than leasing depending on the economics and how things are structured. So let’s look at leases. Let’s look at purchases.
[00:12:25] Let’s do retail. Let’s do office. And if you go to market and you look at your top six, seven properties that are, that are pre qualified that you perform due diligence on, or your agent has, you’re going to get a really good perspective on the market. And you’re going to have probably a pretty strong draw or opinion on What you like or don’t like.
[00:12:43] Hey, this property for these reasons or for whatever. I don’t like this property and here’s why or I love this building. I love this area. I can see myself here. So you start to formulate, you know, you know, economic feelings, you know, emotional feelings, market, you know, market information. And so you start to put together like, Hey, I like this.
[00:13:02] I don’t like this. And then the next step is you start negotiating on multiple properties. And this is a very specific difference between commercial and residential and residential. You know, you look online, you get with an agent, you tour properties. When you find the property you like, you submit an offer and it’s typically done in a contract and a binding document.
[00:13:21] says yes, you’re under contract. Now you can typically get out of those contracts like with objections and, and due diligence deadlines and so forth, but you’re in a legally binding document and you can’t legally go under contract on multiple properties at the same time, unless you have an intention of closing on multiple properties or can economically close on them.
[00:13:40] If you do that, that’s a form of fraud. So in commercial real estate, you’re negotiating on a non binding basis in the form of a letter of intent or LOI. And you’re picking the top three or four properties and your agent is trading paper, going back and forth with multiple landlords, multiple sellers.
[00:13:57] And in doing that, you’re, you’re, you’re not wondering if you’re getting a good deal or a bad deal, like when four landlords come back with similar size properties, similar size spaces. And they’re giving you a response on the build out allowance, the free rent package, and the annual increases, and the lease rates, and then who pays for what types of, you know, maintenance or other utilities costs.
[00:14:19] You’re going to get a really good picture for this is a very competitively priced property, or these guys want way too much for this, or this is a good deal or bad deal. And that helps you to formulate. you know, the decision of, Hey, I’m willing to pay more for my favorite or for the best location or for, for visibility and signage, or no, I’m not willing to pay for it.
[00:14:38] And so those are the things that you’re going through and you’re doing. Whereas a lot of people just pick one property, you know, they submit an offer, they start going after it, and they have some level of comparison versus where the deal started and where it finishes, but they have no clue if that’s a good deal, an average deal, or a really bad deal.
[00:14:56] And you can’t get that type of perspective unless you really become a market expert, number one, or you go to the market. And you negotiate with multiple owners like we’re talking about.
[00:15:06] evon-mendrin-cfp—cslp-_1_05-29-2024_140703: It seems like in these negotiations, having options is, is really helpful, right? Or at least the perception of options, right? You can at least go to market and see what other similar locations are going for and all these different parts of it. And you mentioned a lot of different factors there, but questions should the practice owner ask themselves to sort of narrow down like all of these different factors?
[00:15:27] I mean, does it really just go back to, their ideal business plan, like who, who are they serving? What do they want their business to ideally look like? what is, what do they want the optical to look like versus the other parts of it? So, you know, what do they need to ask themselves in order to try to narrow down some of these different factors?
[00:15:46] Colin: Yeah, that’s great. I mean, one of the first questions is going to be how much, how much square footage do you want now versus the future? Like what’s the right blend of what you need immediately versus what you’re going to need in a year or two years or three years. And we’re always trying to balance, you know, not going too small to where your, your, your growth is completely blocked because you have no more room.
[00:16:06] But also not going too big to where you’re not going to grow into that space for maybe six, seven years. And you’re paying rent on, you know, 500 or a thousand square feet that you never occupy, or at least you don’t occupy it for years. So we’re trying to balance how much space you need now versus later, because in commercial leases, you’re, you’re not doing a one year lease.
[00:16:24] You’re doing, you know, typically seven or 10 year deals. And so you’ve also got expensive build out costs. And so, You don’t just jump around every year till you find a location and you figure out the square footage. you’re figuring out questions like, who do you want to be next to? If it’s a retail center, do you want to be next to a restaurant or do you not want to smell whatever type of cuisine is being made next door?
[00:16:46] Do you want to be in a professional setting with other healthcare providers? You know, is having a big sign in front, is that a deal make or deal break? and so you’re just looking at those things. Are you willing to pay more for retail versus office? Like, that big sign, you know, on the main corridor, you know, with 40,000 cars driving by it per day or whatever, I mean, that costs more than an office space does typically.
[00:17:07] Is it worth it to you? And so, we’re going through those types of questions and we’re asking those questions. And again, a lot of times, people will go in with a preconceived opinion in a lot of those areas. But once they see the market, it’ll start to adjust. They’ll say, you know what?
[00:17:21] I like the idea of a big sign.
[00:17:24] Or, I like the idea of having Whole Foods or a big grocery anchored center in the parking lot. I like this or that, but I’m not wanna pay $3,000 a month more for that compared to my other option. Or I never thought I’d wanna own or I could own. But with the cost of buying this, this building of this office condo, and then, and then borrowing money for the build out, it’s only gonna cost me a couple of thousand dollars more to own than it is the lease, but yet I’m paying down that much money and principle every month.
[00:17:51] So actually the effective cost of owning is actually less than leasing. especially with tax deductions. And so you go in there with some ideas of what you think makes sense or what you’ve heard people talk about, but once you see the market, it really helps you to figure out, you know, what makes the most sense.
[00:18:06] And a lot of times it’s just, it’s supply and demand. Like you can go in there with a wishlist. But there might be some markets, if it’s a really competitive, really tight market, where you might want to look at 10 properties, and there’s only 3 that meet the criteria, and you can’t afford one of them or two of them.
[00:18:21] So, I mean, there are certain times where the market dictates what you can or can’t. And there are times when you go to market and the options there, You got 20 options and it’s, it’s just, it’s almost like too many choices for you and you have to find a way to narrow it down.
[00:18:33] What’s the right balance of square footage for a cold-start practice?
[00:18:33] Evon: Yeah. the, uh, thinking specifically about a cold start. occupancy costs occupancy costs are going to be one of the largest fixed costs of a, a brand new cold start. And that balance between square footage now versus square footage to grow into is, is important. Do you have any, you know, what are you seeing in terms of average square footage for a, a brand new cold start? You know, are there any rules of thumb or just anything that a new cold start should think, keep in mind when trying to figure out that balance?
[00:19:06] Colin: Yeah, typically we try to find a range of square footages because, you know, you might say, hey, my exact square footage is like 1,800 square feet, which that’s a, that’s a fairly common cold starter, 2,200 square feet. But a lot of times, there’s additional factors like there’s common area factors or there’s load factors where if you’re in an office building, you have the square footage of your space, but you also have a proportionate square footage of like the common hallways and the restrooms and stuff like that.
[00:19:31] So, a If we’re talking about it, we’re talking about just usable square footage of inside the space. You know, if you’re downtown Manhattan, that might be 1,200 square feet. You know, if you’re in a suburbia location, you might be able to get 2,600 square feet for the same price as maybe 1,200 square feet somewhere else.
[00:19:49] So I would say on average, though, it’s right around 2,000 to 2,500 square feet is what most scratch starts or cold starts are looking at. You know, we have established practices that have done this numerous times. They know what they want. They tend to go on the larger side, maybe closer to 3,000 or 3,500 square feet, depending on the practice, you know, and then you get into concepts.
[00:20:08] Like, are you going to, what do you want your optical to look like? Are you going to have vision therapy? There’s all these other things that you can get into that certain people may want to do as well. And that changes it. I mean, We’ve done optometry offices that are, that are 1,400 square feet in a dense suburban area.
[00:20:25] And we’ve done, you know, 10, 12, 14,000 square foot, you know, four or five doctor practices that have a 2,000 square foot vision therapy area. I mean, it just depends on, on who you’re talking to, but individual sole proprietor, sole practitioner, doctor practice. it’s 1,800 square feet. Ideally 2,200, 2,400 and then after that, anything beyond there is if you can afford it and if you want it.
[00:20:53] Evon: Yeah, that’s, that’s helpful.
[00:20:54] What to look for in a lease agreement?
[00:20:54] Evon: In terms of the lease itself, let’s dive into the lease. What are some things that optometrists should look into, or at least their representative looking into negotiating as a part of that lease? What are some things that they should be watching out for? What are some things that can be negotiated that maybe they didn’t think could be negotiated?
[00:21:14] Colin: Yeah, that’s a great question. So let me break those down into two main buckets or segments. There’s the economic ones that are predominantly economic. I mean, at the end of the day, everything gets affected economically, but there’s the economic or financial negotiations, the lease rate, how the operating expenses are calculated and billed and invoiced.
[00:21:33] Thanks. annual increases, free build out period, free rent once you finish the build out and occupy the space, or once your new lease renews, free rent periods, free rent packages, build out allowances, how much money will the landlord give you to build out a new space in exchange for a long term lease, how much money can you get to renovate the space if you’re already a tenant there in exchange for renewing the lease, all so there’s, there’s a handful of economic drivers that are there, that are, that add up very quickly and then you get into the business terminology of, you know, do you want to be the only provider in that center or in that building?
[00:22:08] Like, do you want an exclusive, contractor clause? do you want an option to renew your lease? Do you want an option to expand into an adjacent space? If it comes available, is the building at a place where you could actually purchase it? If it’s a $20 million building, then no, but if it’s a three tenant building and you occupy a third of it or half of it, you know, getting an option to purchase could be very, very, savvy.
[00:22:31] It could make a lot of sense for you. do you have an assignability clause? Like if you want to sell your practice and get out, Can you sell it, and then be removed as a guarantor from that lease and have the landlord accept the new tenant as the tenant and as the guarantor, or can you sell the practice, but you can’t get off the lease?
[00:22:47] Like that’s a huge one that, that doctors mess up all the time. And honestly, a lot of attorneys that don’t specialize in health care, they don’t understand this. They’ll say, well, yeah, you have an option to sell it. You do, but it doesn’t say you can get off the lease as a guarantor. That’s the make or break.
[00:23:01] It’s, It’s like the idea of, can you imagine selling your house? Someone else comes in and gets a new mortgage. They’re the new owner, yet you’re a personal guarantee or guarantor on their mortgage. You say, that’s crazy, happens all the time with healthcare providers when they sell their practices because they didn’t have a good assignability clause.
[00:23:18] So, you know, there’s concepts like that. If the HVAC goes out, who has to pay for a new system, you know, stuff like that. So there’s, I mean, there’s going to be the staple, like most, most important, most impactful items economically in business that get looked at, but honestly, there’s, there’s a lot of other variables that landlords will try to sneak really bad concepts and terminology.
[00:23:39] into leases. And so you need to have a good real estate broker, but you also have to have a really good real estate attorney that helps take, you know, what the broker negotiated. And when that, that thing turns into a 70 or 80 page lease document, you need to have a really good real estate attorney that can make sure that nothing else that’s not supposed to be there didn’t get added.
[00:23:57] And the stuff that you negotiated actually gets put in there the way that you think it’s supposed to be in the lease.
[00:24:01] Evon: Yeah. I appreciate you saying that. So the team then here is the, the healthcare. specialized real estate professional or broker, and that healthcare specialized real estate attorney. I mean, that’s, that’s the team there. And I think, can be easy to think that in a lease situation, you, you don’t need, a broker representation. You only need that when you’re going to buy or sell something, right? But all of the things you just mentioned that can be negotiated as a part of that. sure a lot of that many practice owners wouldn’t even think about. You know, thinking about the, the lease amounts, maybe some build out costs, tenant improvements, but there is a long list of factors that can go into that.
[00:24:41] All involved in a really long lease, right? Multi year lease. I mean, it’s, it’s important to have these professionals on your side, looking through that and going through that process with you. And in the assignability clause, something for buyers, I would imagine to make sure you’re looking at as well. If you’re buying a practice, can that lease be assigned to you? How is that lease going to impact the sale? So, certainly as a buyer, I would want to know that as well, what’s going on with the lease and, and would want my attorney to review that well.
[00:25:08] Let’s talk more about the economic side. So there’s, there’s the economic stuff with dollars attached to it. And then there’s more of these business, you know, qualitative is not quite the right word, but more of these business related, other decisions. And the, the economic stuff. what are some things that are more easily negotiated? Because we’ve got the, the lease amounts, we’ve got potentially free, free lease payments. And then we’ve got all this other stuff, tenant improvements, all that other stuff. Like what, what are some of the things that are more commonly easily negotiated, versus what’s, what’s more difficult to get in the favor of the, of the optometrist.
[00:25:44] Colin: Well, and, and that’s a great question. And let me tell you this, the answer to that question varies, dependent upon whether or not the landlord thinks that you are sophisticated or not. And so if you are an optometrist and you show up to do your own deal, they’ll show you respect. they’ll coordinate, they’ll accommodate, they’ll be gracious to you in most scenarios, but they’re gonna assume that you don’t know what you’re doing.
[00:26:07] Because here’s the reality. Even if you’re super savvy and you run a really successful practice or group of practices, you’re not a real estate professional. All right. And so, you know, if Chipotle showed up, they’re going to, they’re not going to have some random guy at the corporate office doing it. Even if he’s super savvy, they’re going to have a real estate professional.
[00:26:23] When Starbucks shows up, they have a real estate professional. If Lockheed Martin or Chase Bank or pick your Fortune 500 company shows up, they got really smart people, but they don’t do the real estate. The real estate people do the real estate. And so if you show up as a doctor, you’re, you’re already showing the landlord that you’re not serious about getting the best terms possible because no, no doctors doing their own real estate.
[00:26:45] If they’re really intentional and they really want to capitalize, they’re hiring a broker. Just like if a healthcare patient wanted to get the best outcome, they’re not going to be their own provider. They’re going to go to, they’re going to go to the optometrist. They’re going to go to their own chiropractor.
[00:26:59] They’re not going to tell their kid to jump on their back and they’re not going to try to pull their own tooth out with a pair of pliers. They’re going to go to an oral surgeon. Like if you want the best outcome, you go to the specialist. Simple as that. So if you show up, As a provider and you say stuff like, what would you guys do if I did this?
[00:27:16] Or would you send me a proposal? Or you start asking questions, you’re showing the landlord, you have no clue what’s going on. And so you’re not going to get the same response. you’re going to get higher lease rates. You’re going to get lower TI allowances, lower free rent packages. They’re going to hit you for higher annual increases and they’re going to start the deal at a place where it allows you to ask for better terms and they’re going to give them to you so you feel like you won, that you’re going to feel like you, you move the needle and it’s, it’s literally just a game.
[00:27:48] Okay. Like I joke around, You know, my son now is 15 years old, you know, when he was five years old, we’d wrestle and he would somehow miraculously, you know, I’d outweigh him by 150 pounds, but he miraculously beat me in wrestling. And he’d go tell mom, you know, that he beat dad in wrestling. The landlords know how to get the doctors to feel like they won or they got a good deal.
[00:28:08] Like, Oh, we’ve never done this before, man. You’re going to be the lowest price tenant in the center. And, They say all these things that are just not true. The doctor walks away thinking that, that he’s this like master negotiator is going to start writing, publishing books on negotiating. Meanwhile, they left like 300 grand on the table.
[00:28:25] So, you know, the, the lease rate is going to be a factor of, of what else is available in the market, comparatively speaking, like it’s a supply and demand issue, just like housing is. If you go to the market and there’s four or five properties that are very comparable and the other ones have better parking or access or visibility, then you’re That’s going to make them more valuable.
[00:28:48] That determines the value of the property. If there’s only one property available that has 2,000 square feet, everything else fully leased up and the other landlords are capturing certain lease rates, that’s going to drive the price up of that property. And so if you don’t have that information, you’re just literally just guessing kind of blindly in the dark.
[00:29:05] So what, what should the lease rate be? It depends on the market. How much bill of allowance can I get depends on how much the landlord has to give to get this space leased for a 10 year deal or what their, their lender is going to allow them to do. You know, how much free rent can I get away with? It all depends on how bad they want the deal.
[00:29:23] And so you can’t get to those types of, of answers, to where you actually have factual data to back it up if you don’t have multiple properties that you’re looking at. Otherwise again, it’s like, it’s like you’re looking off in a distance saying, I wonder how tall that mountain is. Like you just, just, it’s a complete guess.
[00:29:39] If you could actually walk up to the front of the mountain, you could actually measure that thing. And you had the engineering devices to do it. You, you know, exactly to the inch, how tall the mountain is. And so if you don’t have other properties to compare things to, If you don’t have the market analysis, you’re literally just guessing.
[00:29:56] And so, you can get a deal done, you can get a lease signed, and you can move in as a tenant, and, and, and you can say, well, this is good, this works for me, it fits my budget, but you can do that and still lose two, three hundred grand really easily. So, not trying to make it more dramatic than it is, I mean, just like taxes, like, you can do your taxes yourself, but you’re probably going to pay, you know, tens of thousands of dollars you shouldn’t have paid as a business owner.
[00:30:17] if you knew how to take advantage of the tax laws the way that it gives CPA debt. So, sure, you finish your tax return, you file that, you paid your taxes grade, but you probably could have saved tens of thousands of dollars if you knew what you’re doing.
[00:30:29] Evon: yeah, it does seem like without data, without options, without knowing what other similar properties might be going for, you’re kind of left just taking the price and wondering, you know, does it fit within my budget? Like you said, like, can I, the only option that’s really in your hands is can I, can I fit this within my cashflow or not, and there’s really no room for you to negotiate that to be something more closer to what a real market rate would be.
[00:30:54] Colin: Yeah, well, and with that too, because you’ll hear a lot of people say, you know, your rent should be between 6 percent of your gross revenue, like actual, like, receipts, not, like, not with charge offs or write offs or discounts, et cetera. But, What did you actually bring in tax return wise, revenue wise? You know, that’s fine to give a ratio, but that’s, that’s, that’s still a really bad way of doing things.
[00:31:14] People say, well, you know, my rent’s only 8%. It’s at the higher end, but it’s still within the margin. Who cares if it’s in the margin? What if you could have been at 4 percent because you could have capitalized. on the market with the real strategy. And what if your production is higher than most production, like 68 percent based upon what, like based upon doing a half million in revenue or a million or 2.
[00:31:35] 5 million or 5 million. I mean, those numbers don’t make sense as just a blanket percentage. It’s like saying, well, the average person should be 180 pounds. Like there’s, there’s too many other variables that are there.
[00:31:49] Evon: I’ve heard it said from really just from talking with other professionals like you, that, that the, the value of these practices, kind of like we mentioned earlier, the value of these not practices, the value of these, these buildings, these commercial properties are really dependent on. rent that they’re able to bring in. And, and oftentimes the landlords are able to, or more willing to, to throw in other things like tenant improvements, to add dollars elsewhere in favor of the optometrist, rather than taking a below market rent. I mean, can you talk a little bit about other things that go into that, like tenant improvements and just other things that optometrists should be thinking about,
[00:32:28] Colin: Yeah, that’s a really savvy statement on your part because the mentality oftentimes is, well, you know, if the space has been vacant for a while, why wouldn’t they just do a lower lease rate? And the answer is because that lower lease rate changes the value of the entire property.
[00:32:43] The lease rates, you know, determine, yeah, they determine the value of the property and, and, and the most relevant lease rate is the last deal that was done.
[00:32:53] And so you could have a building that has maybe 10,000 square feet that’s leased, 2,000 square feet that’s vacant, and that space could be vacant for maybe two years. And the landlord’s not taking deals that show up because they’re not at a rate he wants. And someone might say, well, that’s foolish. Well, it’s foolish from a cashflow perspective, not to take a lower price deal.
[00:33:13] But if you’re trying to get the highest value for the property and you’re eventually going to be a seller, which every landlord is typically going to be a seller or is a seller if the price is right. If you do a below market lease rate, you just devalue the entire property and a lower lease rate by a couple of dollars a square foot could devalue a property by literally hundreds of thousands of dollars because it’s all, it’s all a derivative or multiplier of the income.
[00:33:34] So, you know, landlords will hold out for, for higher lease rates, but they’ll also give better economics. Like you said, they’ll give a higher free rent package or they’ll give a higher TI or tenant improvement allowance or build out package because they want to secure better tenants on long term leases that are going to renovate and invest in the spaces, make their properties worth more, and they want a higher lease rate.
[00:33:58] And so, you know, that can work out in your favor too. I mean, cause most doctors can only borrow so much money on their deals and you’ve got, you’ve got, you know, equipment, technology,you’ve got all the different products and merchandise that you want to sell or that you want to have it in house.
[00:34:12] You’ve got marketing, you’ve got signage, you got all these different things you want to do. And typically most people have a cap on how much they can borrow. So if you’re going at a deal and every dime that goes into the space comes from you, you’re probably borrowing more or you’re going to have to sacrifice technology or something else in your space that you could have maybe not sacrificed if you had a better deal.
[00:34:33] So getting a landlord to contribute towards your build out. with better terms, you know, it comes in exchange for a longer term lease and it comes in exchange for how you structure the deal.
[00:34:43] Evon: Yeah, that’s a, that’s a really interesting point about the, the trade offs and if you’re lowering the lump sum upfront costs while you’re going into it, that could mean lower borrowing costs when you’re, you’re starting up the practice, better cashflow as you go from there. So there’s all these different things sort of think about and balance out. which again goes into the value of just having good, good professionals in your, in your life as you’re going through this.
[00:35:04] How to Navigate Lease Renewals?
[00:35:04] Evon: And, uh, let’s kind of fast forward like a few years go by and now that practice owner is, is looking at a lease renewal, right? Their lease is starting to come to an end. Maybe that lease renewals negotiated into the agreement. I like it can be pretty easy to just let that automatically renew, you know, take whatever the terms are as they’re agreed upon before. Are there opportunities to negotiate again? Like how should a practice owner approach that lease as it’s ending or as it’s about to renew?
[00:35:36] Colin: Yeah. So, so that’s a great question. So let, let me frame it this way, more money is left on the table and more doctors lose money on lease renewals than on any other transaction. It’s the number one deal where landlords capitalize and doctors lose money because there’s a couple of things that are going to be almost a given.
[00:35:56] Landlords are going to assume the doctor doesn’t have the time to go find another property. They’re going to assume that they don’t want to go through the hassle. They don’t want to borrow more money. They don’t want to relocate. They don’t want to notify their patients. Landlords are going to take the upper hand and just assume that that doctor is going to stay.
[00:36:12] And unless that doctor hires a broker and puts together a really specific strategy, they’re going to assume they have the upper hand. Well, if you have the upper hand in a high dollar negotiation, if you thought the tenant was not willing to move out, what is your motivation as a landlord to give them anything?
[00:36:31] The answer is, there’s no motivation. Like, I mean, let me give another analogy to prove the point. If you were going to sell your house and your house was worth, let’s say a million dollars, and your broker told you that they could get a million two for it. Like, are you going to sell it for a million or are you going to sell it for a million two?
[00:36:46] You’re gonna say, no, get me the absolute best possible price. Like I want the most amount of money possible. Landlords are the same thing. If they have you at a current lease and your lease is coming out for renewal, And you say things like, I don’t want to move, it’s been a perfect location, I don’t have time to move, I’m not willing to borrow money, or I don’t have the, I mean, whatever it is.
[00:37:05] That landlord is going to put you in the category of, Great. You’re going to pay a premium and I’m going to give you virtually nothing that I don’t have to give you. And when the doctor comes back and says, well, would you do this for me? Basically, you’re just saying you’re basically I’m begging you to give me money right now And and even if you say no to me I’m still gonna sign the deal like the landlord is not gonna do anything in that situation.
[00:37:28] So the lease renewal negotiation Number one place where doctors lose money and the vast majority just sign off They had an option to renew their lease and their original master document 10 years goes by, seven years goes by, landlord says, Hey, here’s your option. And they just sign off on it and they don’t get any free rent.
[00:37:48] They don’t get any money to renovate their space. they don’t get a lower lease rate to get back to a market number. And the reason I mentioned that is almost every lease you’re going to see, I’d say 90, 98 percent of every lease out there has an annual increase built in where it ratchets up every year, it goes up by two or three or 4%.
[00:38:06] Okay. Well, that annual increase outpaces the market in the vast majority of leases. So you get a doctor signs a lease at a certain rent number, and then it bumped up in year two with three, four, five. After 10 years, you’ve had nine increases. Typically, that lease rate is higher than they would capture if the space was vacant and they were going to market to find a new tenant.
[00:38:27] Well, if you sign off on that option to renew, it’s going to bump again in year 11 and you just keep that process going to where all of a sudden now the delta of what you are paying versus what the market says is fair gets, gets bigger and gets bigger and gets wider and wider. So the answer to your question is yes, you should be getting free rent on a lease renewal.
[00:38:48] Yes, you should be getting money to renovate your space on a lease renewal. Yes, you should be getting a, a market lease rate. Doesn’t always mean it’s going down. There are times when your lease rate is lower than market. That does happen depending on big increases or decreases in the market. It does happen.
[00:39:03] but the vast majority of times out there, the lease that’s coming up for renewal has a higher lease rate than the market currently dictates. And you’ve got to get, you got to get back to that market number. Otherwise, again, you’re just going to keep losing, you know, thousands or tens of thousands per year.
[00:39:19] Evon: So acknowledging that in reality, practice owners don’t have the time often to, to do all this themselves. I mean, literally they probably want to just continue on and take the path of least resistance, just continue to serve patients and to continue to run their businesses. how do they go about that?
[00:39:38] You know, balancing the, the time commitments to. To go look through other properties. I mean, how do they really go about that? And how can someone like yourself like help take that burden off their shoulders?
[00:39:53] Colin: Yep. So the same exact way that someone would tell, you could tell, If someone is nearsighted or farsighted, if they need contacts or glasses, like the optometrist said, sit in this chair and tell me what you see on this chart. It’s the same thing. You hire an expert real estate advisor. They’re going to say, show me your lease, show me your invoice.
[00:40:13] They’re going to do their due diligence and they’re going to tell you, Hey, you’ve got a really good lease. Let’s, let’s not lose this option to renew because it is a really good one. Let’s not play games. Just sign it and let’s forfeit free rent and TI allowance because the lease rate is so competitive.
[00:40:28] Or they’re going to say, look, you’re $4 a foot above market times, you know, 3000 square feet. You’re going to pay an extra 120 grand over the next 10 years. Plus you should be getting at least $50,000 to renovate. You should be getting $30,000 So if you sign that option or new, you’re going to lose $200,000. So the same way that an optometrist can tell you what’s going on with your eyes.
[00:40:49] A good real estate advisor can say, you know, this property is not worth that, you could own real estate for the same price that you’re paying per month. you know, there’s a better area that, that’s, that’s up and coming that, that we could relocate you to where you could, you could still keep all your current patients, but tap into a new trade area.
[00:41:07] It’s only three miles down the road, so you’ll keep your current patients, but trap into a brand new trade area. The same way that an optometrist will tell you what’s going on and what you should do, a good real estate expert will tell you the same thing. So, you know, the bottom line is, if you don’t have market intelligence and data, you’re just guessing and you’re just hopeful.
[00:41:26] And again, if you don’t care, then you can do whatever you want to do. And the idea of saying, well, I don’t have time, I will prove you have time. If you give me an hour or two of your time, I will, I will give you a 200, 000 check. Do you have time for two? You would say, yeah, I will, I will find, I will find time, you know, people are hilarious.
[00:41:48] People will spend two, three hours saving $50 on something crazy, or they’ll, you know, they’ll spend 20 minutes in line at Costco to save like $4. I mean, whatever it might be, like people do these all time to save nominal amounts of money. And then it comes to their lease document and they’re like, Hey, how’d you like to save $200,000?
[00:42:07] Like, wow, I’m just too busy. It’s like, no, you just have no clue that that’s available. The person that says I don’t have time is the one who doesn’t truly understand what’s on the line. If they did, they would, you would give me a couple hours, your time, and I’ll give you a check for a couple hundred thousand dollars.
[00:42:23] I’m not going to have to wonder if you’ll figure out how to make time for me.
[00:42:27] Evon: Now, I appreciate the emphasis you’re putting on this because that, I mean, this is another big commitment that you can, if, if, you know, by default, you can do nothing and it will just continue on into the next. The next agreement, you know, the next stage of that agreement. And I, it’s good to hear that there are, there’s, there is all this room to, to relook at the lease and to reevaluate, like based on the cost versus what you’re getting in this, in this location, does it continue to make sense to, to fit your practice, to fit your cashflow and can you improve your situation?
[00:42:57] I think we all should be going back to like that benchmarks thing. Like, yeah, benchmarks are helpful, but we should all be trying to improve our own numbers. You know, we should all be trying to improve all these different line items in the P& L and a part of that is this lease and it can be a pretty big part of that fixed cost that you’re running to, to run your practice.
[00:43:15] So, I appreciate the emphasis you’re putting on that at the renewal, what, what you can do with that.
[00:43:19] How to decide to lease or purchase?
[00:43:19] Evon: And let’s go into that other thing you mentioned, which is, Deciding to lease again, for a more established practice owner. You’ve built up now potentially a down payment to put on a new property. Maybe you’re thinking about removing that rent from your life and replacing it with a mortgage, but building up equity in your own property that you own. So how should a practice owner then evaluate the decision between going into another lease, whether it’s at the same location or not, and then or purchasing a property, whether as it is or to build.
[00:43:53] How should they think about that?
[00:43:56] Colin: Yeah. I mean, The, the question of whether you should lease or purchase, comes down first and foremost to inventory. Cause you can have the down payment to purchase and you can have the desire to purchase, but you can be in an area where there’s literally not a single option for you to purchase that makes sense.
[00:44:11] Like you say, listen, I need 3000 feet and there’s not one option to purchase anything that’s less than 10,000 square feet and, and you might not want to be a landlord or take on that risk. And so you could say, I want to own. And if it’s a competitive market or if it’s a dense market, there could be no options that are inside your budget.
[00:44:28] and so inventory is going to drive that conversation. Now, if there are options to purchase, and they are reasonable, then it comes to the next question, or the next set of questions. Do you have the down payment? Do you have the ability to support the cash flow? Are you willing to take on the additional requirements of ownership?
[00:44:47] Because there are some steps that are, that are different, that, just like home ownership, it takes more time and more money, and there’s more things that come into play. then just renting and showing up and giving the landlord a check every month. And so if the answers are yes to those, I have the down payment, I want, I want the benefits, I can support the cashflow, I’m willing to take on some additional steps, then you go to market and you start looking at options.
[00:45:08] And ultimately the, the comparisons are going to come down to, to a lease versus purchase analysis. And you’re going to, you’re going to look at the numbers and then you’re going to determine if it’s worth it. If you can own real estate, You can own commercial real estate and you can pay a similar amount to what you would pay if you’re renting.
[00:45:27] It’s typically a no brainer if the properties are comparable and if you like the option to purchase. I mean, every month that you make that payment to a mortgage lender versus a landlord, you’re paying down principal. It’s like in your house, you’re building equity, your net worth goes up every single month.
[00:45:41] And then you’re picking up additional tax deductions, just like what you do when you own a house, like you get to write off things when you, when you, own real estate, you get to depreciate the asset over a period of time as well, so you’re picking up additional tax deductions that you don’t pick up when you are, when you’re renting or leasing, so, you know, the numbers drive a lot of the conversation, and there are times, like, it’s not quite as simple, like, you might say, look, I like the property that I’m leasing, And I like the property that I could purchase.
[00:46:07] I like them both evenly, but the purchase is going to cost me an extra $6,000 a month. And I’m going to pay down maybe $2,000 a month in principal, pick up maybe $2,000 a month in tax deductions that are extra. But there’s still that margin there, which would cost me a little bit more money per month to own by a couple thousand.
[00:46:24] And then you start getting into concepts like, you know, this is a for savings account for you. Is this where you want to put additional money or do you want to do you want to be done dealing with landlords for the rest of your career? you know, what happens when you sell your practice? You can write a 10 or 15 year lease with the person that buys your practice and you could pay that entire building off or cashflow and he becomes an annuity to you.
[00:46:45] And so, you know, there’s other variables that come into play. that are not one size fits all. But you know, my, my statement is this, you never want to own real estate to the detriment of your practice from a location or quality perspective. And what I mean is you get people that are obsessed with owning because it’s a waste to rent and I have to own and they’ll choose a property that is That is not even close to as nice of an area, has worse neighboring tenants, doesn’t have good access, and they’re paying down $2,000 a month in principal.
[00:47:20] But they’re losing $300,000 a year in revenue because they’re not getting the same referrals from patients. They’re not attracting the same quality staff, etc. It’s like, the number one focus has to always be the practice. Real estate is secondary to the practice. And so don’t don’t fall in love with one or the other.
[00:47:37] But I would say this, long story short, the inventory starts the conversation, your ability to execute or have a desire to do something is the next determining factor, and then at the end of the day, the numbers are going to tell you very quickly whether it makes sense or not, and if it’s close to leasing, and you like the property, and you can afford it, I’m a huge fan of owning real estate because it’s another asset that helps you to build your net worth and a lot of times the real estate is worth more than the practice.
[00:48:07] Like, we work on a lot of deals and I’ll tell you this, when doctors go to sell their practices, we see the real estate, when they own it, being worth more than the practice 75 to 80 percent of the time, if not more. So, if you’re going to sell your practice for, let’s just say a million dollars, use a round number, and that real estate is worth a million five, when you go to sell, you’ve got two, two assets being sold versus one, it’s not a hard equation or decision to say, do you want a million or do you want 2.5 million? That real estate can be an extremely legitimate wealth building tool.
[00:48:40] Evon: Yeah. I, you laid that out so nicely and I really appreciate you saying with all of the benefits of owning the real estate, you have to put your business first. I mean, ultimately what is right for your business in order to allow your business to, to grow in the way that you want it to grow, to be as profitable as it can be, within the confines of, of the real estate.
[00:48:59] And it probably that, again, that comes down to, like you said, inventory, like what’s available and what is the best fit for your business. cause you can sort of get on, you know, you spend enough time in certain groups online and things like that. And you can, you can get in this mindset of you have to own your real estate despite whatever else is going on in your life.
[00:49:17] And. there’s a lot of ways to build wealth. Real estate is an excellent way to do that, especially that commercial property connected to your practice. But if it’s at the detriment of the ability of your practice to grow and be profitable, then it just doesn’t make sense. And it sounds like you have
[00:49:32] a ton of experience helping optometrists and other health care professionals analyze that comparison and figure out What really makes sense for, for their particular businesses and their circumstances and, going through those, those transactions with practices, there any big things that you would want someone to keep in mind as they’re going through that?
[00:49:52] And I’ll just name a couple as I, as I think about it. from my perspective, make sure you’re considering carefully how you’re titling the property. you know, you should talk to an attorney to talk about this. What is the appropriate way to take ownership and title that property? Very often, it’s going to be recommended that that real estate, that commercial real estate is going to be held separately in a separate LLC or in a separate entity from your practice entity for both liability and tax purposes, especially if you are taxed as an S corporation. So talk with your professionals about titling, how to take title. Second thing is talk to your, your tax and financial professionals about tax planning opportunities as soon as you’re getting into that. Should you, or could you group together that real estate activity with your practice activity from a tax perspective?
[00:50:39] If there’s common ownership, is there other passive income or losses to take into account? Should you use cost segregation? So there’s all of these different tax and financial considerations. The earlier you start to talk with your professionals about that, the better off you’re going to be. So those are some of the top things on my mind. Colin, what are some things that you see? Coming out of these transactions that they should be keeping in mind.
[00:51:01] Colin: Yeah. Well, let me, let me comment on the one or two that you just said. I totally agree. I mean, you’re going to hear most attorneys say, always put it in an LLC, never put it in your personal name. And then, and then you are going to want the assets separated because if you want to sell the practice and not sell the real estate, it’s going to be a lot more challenging to separate those assets if they’re in one entity versus two.
[00:51:21] So that stuff does make a big difference. And you’d be amazed at how many people just take title in their personal name, right? And just leave themselves fully exposed to, I mean, a slip and fall on your practice exposes your personal assets. Like, that’s a really bad scenario to have. So, along the same lines, you got to make sure you have proper insurance on the properties.
[00:51:40] Like, what’s the minimum coverage is not the best question. It’s what’s the right amount of coverage. and I love the cost tag study too. I mean, You know, we have clients that buy real estate that wipe out all their taxable income for literally two or three years in a row or longer by just by getting really savvy with their CPAs with bonus depreciation and so forth.
[00:51:59] So it’s a lot of, tax strategies with, with starting a practice with, you know, section 179 and then also with buying real estate with bonus depreciation, et cetera. So a lot of things to pay attention to. You know, I would say, if I just gave a quick hit list on things, I would say, number one, hire professional representation, don’t take the do it yourself approach, that’s not the right game plan for taxes, for financial planning, for legal, for insurance, like you hire the pros in every area, And you have the best team, the quarterbacks, not the linebacker or the wide receiver.
[00:52:33] Like you have a person in each position who’s an expert in that area and they help you build the best team possible. The next thing is know your timelines. Like you’d be amazed at how many doctors think their lease expires in November and it’s actually expiring in March and they literally end up with one or two months left in their lease panicking because they have no clue what’s going on or what their options are.
[00:52:57] Another one is this. You can talk to your peers and colleagues and you can ask them questions, but it’s amazing, it’s amazing how people are asking someone who did a terrible job with their real estate what their thoughts are. You know you get these people that have no clue what they’re doing in a certain area evidenced by a terrible negotiation or outcome. And then they’re giving advice to their friends, telling them how to, you know, they’re, they’re telling Michael Jordan how to shoot a jump shot. You think it’s, it’s not the right person giving you advice. You can ask them things clinically, but you know, we hear from people all the time saying, I talked to two or three of my friends and they did this.
[00:53:33] And we’re like, you couldn’t have gotten worse advice. Like, I don’t care. That’s how they did it. But that’s, you know, that’s not how that’s not how the pro that’s not how Chipotle is doing it. So. If you’re talking to Starbucks, yes, they’ll have a good strategy, but your friend down the street or in the same building who’s just, who is the do it yourself pro, like, that’s not the right person to consult with.
[00:53:54] So, I think that, and then I would also say a couple of the ones Never fall in love with one property. Always look it up multiple options, you know, pick multiple properties and negotiate. Don’t just pick one. and then I would also say the last thing is you gotta be really careful with what you’re communicating to landlords and listing brokers.
[00:54:13] They are listening. And if they think that that is your top property unequivocally, you’re going to pay for that. If they think that you don’t have time to move or you don’t have the money to move on a lease renewal, it will cost you $200,000. They will, they will not give you the right terms. They will force you into a deal that doesn’t, it’ll make enough sense for you to sign it because you have no options, but it will cost you a couple hundred thousand dollars.
[00:54:36] So there’s just a lot of little intricacies that, you know, you can, you can fall prey to if you’re not paying attention. And again, you shouldn’t have to pay attention. You should just hire a professional. I don’t have to know all the tax codes. I’ve got, I’ve got a really, really good personal CPA and a really good business CPA.
[00:54:53] And I make sure that I don’t miss things. Like I pick their brains. These guys are market experts. They know what legislation is passing. They’re watching to see if the Senate is going to renew bonus. I mean, they know what’s going on. I don’t have to be that guy. It’s the same thing for real estate. You don’t have to be that guy, but you need to hire that guy.
[00:55:10] Evon: yeah, this can be a huge world of, you just don’t know what you don’t know. I mean, you, you really don’t. And there’s a lot of moving parts here that you talked about. And I, I really appreciate you laying all this information down and giving me, and I think the listeners just a lot to think about and, and knowing that there’s a resource like you out there in your firm and others like you to help these optometrists make these decisions.
[00:55:31] Helping them to in helping them to take that burden off their shoulders. So I really appreciate your time and expertise here.
[00:55:37] How to connect with Colin and CARR
[00:55:37] Evon: Colin where can people find you and follow you and learn more about what you’re doing. I
[00:55:42] Colin: Yeah, I appreciate that. the best way to get in touch with our team or to access our resources is our website. And it’s carr.us, so it’s c a r r. us, we’ve got agents coast to coast, if you want to start a conversation, if you want to get a lease analysis, if you want to understand if there’s any options to purchase in your area, you can click to find an agent and, and they’ll start giving you the information and the data that you need to start, you know, picking a path for your next transaction.
[00:56:09] and then also, you You don’t have to become an expert, but if you, if you want to at least get educated to a certain level, we’ve got a huge resources tab that has literally hundreds of FAQs, glossary, concepts, you know, articles, videos. If you want to just get a little bit more information or a lot of information, we can load you up with, with whatever you want.
[00:56:31] And we’ve got a lot of stuff to help make sure that you, again, you don’t have to become the expert, but you will certainly be better prepared and and well suited for your next transaction.
[00:56:40] Evon: appreciate all that. We will throw links to all of that in the show notes here, which you can find by scrolling up in whatever app you are using. But a call in again, really appreciate your, your time and expertise here, for the listener or appreciate your time and listening for today. We will catch you all on the next episode.
[00:56:56] In the meantime, take care.
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Optometry Wealth Advisors LLC