After purchasing his first property in 1998 based on little more than a gut feeling, Todd Nepola has come a long way as a commercial real estate investor. The Current Capital Real Estate Group founder shares his Best Ever advice for anyone who might be considering breaking into the industrial or retail spaces:
1. Follow your gut. Todd’s first property was a warehouse that he purchased, although no one else saw value in the deal. He thought it looked like a good property to buy, and it had a “For Sale” sign, so he bought it. That purchase launched his commercial real estate investing career.
2. Sometimes signs and paper are all you need. When Todd Nepola needed to fill vacancies for his first retail property back in 2003, he relied on a “For Rent” sign in the window and an ad in the newspaper. Today, even with all of the advancements in technology, he says signs and paper have still served him best.
3. Focus on neighborhood retail centers. Although many people are worried about a “retail apocalypse” on the horizon, Todd has found success investing in what he calls resilient retail spaces — those that will house chiropractors, dentists, tax offices, restaurants, etc.
4. When it comes to industrial investing, prepare for competition. Todd says the barrier to entering this asset class really comes down to patience. “You better be willing to pay up, because it’s just not going to make sense going in,” he says. “You’re not going to get a good deal, you’re not going to get a great cap rate, so you have to believe in it for the long haul.”
5. When seeking lenders, local regional banks are your best bet. In Todd’s experience, these banks are better able to focus on your business compared to the larger national banks, and they have a more human touch.
6. Once you secure a lender, you’ll need to put some money down. Todd recommends putting 30%–35% down on a loan in order to give yourself a nice cushion. “I sleep well at night putting a little bit more money down on my properties and having them leverage comfortably,” he says. Putting down a higher amount than the bank requires also gets him a lower interest rate and lower recourse.
7. It pays to be nice to brokers. Even if they don’t have something that you want at the moment, they may be able to deliver it to you sometime in the future, Todd says. Once they know you and consider you a real buyer, they might just come to you with a deal before it hits the market.
8. Some of the best commercial deals are listed by residential realtors and mom-and-pop brokers. These properties are often not advertised on major websites, and the prices can be shockingly low. Check residential multiple listing services, and be on the alert for “For Rent” window signs.
9. Take a chance and hire people. Every time Todd has spent money to bring people on board, it has paid off.
10. You can lose money by failing to compromise. Todd learned from his own personal experience that if a deal is a deal, it can still be a deal, even if someone moves the needle a little bit. Sometimes it pays to be flexible.
Todd Nepola | Real Estate Background
- Founder of Current Capital Real Estate Group, a full-service management and leasing company that specializes in commercial retail and industrial spaces.
- Portfolio: GP of 25 buildings consisting of retail and industrial.
- Based in: Hollywood, FL
- Say hi to him at:
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