EP. 52: From Broker to Owner: How to Scale in CRE

Dive into the commercial real estate landscape of Northwest Arkansas with TJ Lefler, founder of Lefler Capital and seasoned investor managing $250 million in properties across the region. Born and raised in Arkansas, TJ shares his fascinating journey from college graduate with a real estate license to commercial property powerhouse, revealing how his "make it better" philosophy has guided his investment strategy.

TJ pulls back the curtain on his transition from 15 years in commercial brokerage to full-time investment, explaining how client requests to partner on deals sparked his evolution. We explore his value-add approach to commercial properties – from adding 40 apartments to an existing 140-unit complex to transforming a nine-story Bentonville office building with amenities like pickleball courts and golf simulators.

The contrast between Northwest Arkansas and Little Rock markets offers valuable insights for investors considering different Arkansas markets. While NWA office space thrives contrary to national trends, Little Rock presents different opportunities and challenges. TJ's recent $40 million office acquisition demonstrates his confidence in the continued growth of Northwest Arkansas.

Beyond numbers and deals, TJ shares the personal side of high-stakes investing, including the mental challenges of managing risk and the importance of communication with both investors and family. His story illuminates how singular focus on real estate, coupled with a clear value-add strategy, has allowed him to build a thriving investment portfolio in one of America's fastest-growing regions.

Do you dream of commercial real estate investing? TJ's journey from broker to investor reveals the path, pitfalls, and potential rewards waiting for those bold enough to transform properties rather than simply acquire them.

Episode Transcript

Speaker 1 (00:07):
Welcome to Northwest Arkansas Investing Podcast, your
go-to source for real estateinvesting in Northwest Arkansas.

Speaker 2 (00:13):
With your seasoned investor just starting out.
We bring you expert insights,market trends and practical
strategies to help you buildwealth through real estate.

Speaker 3 (00:20):
From buying and selling to property management
and long-term investmentplanning.
We cover it all so you can makesmart, informed decisions in
this fast-growing market.
Let's dive in.

Speaker 1 (00:30):
Welcome to Northwest Arkansas Investing Podcast.
We have TJ Leffler with us,founder of Leffler Capital.
Tj, thanks for being on thepodcast with us.
You bet we really appreciateyou taking your time to come.
Of course, we have Brandon Sillwith us, winner of yesterday's
golf match, and Brian Wagers.
Brian Brian Wagers, uh, ourother co-host uh, thank you for

(00:50):
being with us.
We just want to start with likewe usually start with, like a
quick overview of like who youare, what you do, uh, how long
you've been in the area, kind ofthing.
Just a 30,000 foot perspective,and then we'll dive in from
there yeah, don't have too farback to go, but yeah, I've been.

Speaker 4 (01:07):
I've been Arkansas, you know, born and raised.
Um, I grew up in a little townhour north of Little Rock called
Searcy and went to school inFayetteville's and dreamed to
come here, you know, to schoolin 02, and I met my wife here
and I graduated for the financereal estate degree.
Um, my wife's from Bentonville,so you know, we just have a lot

(01:27):
of roots here.
Of course, my parents are nowback here and a lot of families
here.
We just never left.
I literally have been doing realestate since I was at college.
It's the only job I've ever had.
That's all I plan to do for therest of my life, unless
something goes wrong, and it'snot.
You know, having one job ismaybe boring to some people, but
every day is a new day for me,like when we're buying something

(01:49):
or selling something.
We have a little bit of everytype of property, and so I mean
it could be apartments today,warehouse tomorrow, selling land
the next day, and so we just, Ijust love it and we've never
left.
We've been.
We live in Fayetteville.
I was telling you guys we wouldconsider any town here.
It's awesome.
Yeah, um, I'd like to have fivehouses up here.
So I have a house in downtownBentonville and do something up

(02:11):
there and come back.
But, um, but, we're inFayetteville.
I have a few kids in publicschools.
Um, and life, life is great uphere.

Speaker 1 (02:19):
What got you?
I guess you said you've alwaysbeen just real estate's just
been part of life.
What was the?
Brandon likes to ask thisquestion a lot too like what
started that drive?
Were your parents into realestate and that kind of spurred
you on, or were they like notreal estate and you just found?

Speaker 4 (02:35):
out.
Really it's partial.
I was a broker for like 15years.
Real estate agent yeah, allcommercial.
Real estate agent yeah, allcommercial.
Um that that job was kind of um.
My dad was in commission sales,you know, and I watched him get
up early and drive to differenttowns and sell things.
Credit card processing was,yeah, he was in and just the

(02:58):
whole sky's the limit mentalitywas kind of what got me in that.
But I don't know what it is,but I, you know, drive around
big cities or in new york orwhatever, and you see those big,
tall buildings and you know alot of people I'm sure,
including me at first were likewell, there's no way I could own
that, like it's just a whateverhundred billion bazillion
dollar building stories, tall,and um.

(03:21):
Then I started thinking, youknow, why not like?
Why can't I like?
Like I don't necessarily havethe money to buy it, but like,
is there a like?
How did other people get intoit?
So those questions kind ofprompted me.
I actually worked at Lindsay inFayetteville when I was at
college and they had just builtthat new building in
Fayetteville.
It was a big building to me andI was like man, this is awesome

(03:41):
, but like can I have one ofthese one day?
And so I just started learningand that kind of snowballed and
gravitated to to where I'm atnow.
Wow, I don't own a hundredstory building, but I do own
real estate.

Speaker 1 (03:54):
Working towards it, yeah, uh, what was, like you're
in college, what is was realestate to you, was that, um,
that was that commercialbrokerage, like was that what
you were doing then?
Or were you flipping stuffduring that time period, or do
it?

Speaker 4 (04:07):
No, I didn't really have.
I mean, I didn't really havethe money to do that.
Um, I just literally honestlythe whole commission sales thing
.
I got a finance degree and youknow I was in a fraternity and
you're kind of like what's theeasiest way out of here?
So it was finance and realestate was part of it.

(04:30):
But also real estate got youyour license in school.
So I had my real estate licensewhen I left college and so that
was kind of that was what I wasdoing in college.
I mean I did start with alittle bit of housing, but it
was kind of like borrowing moneyfrom people to kind of put
something little together.
The first house project we did,I mean it was like a $200,000
loan and we owned a house mywife and I did.

(04:52):
Now when we there's too manystories, but when I was a broker
, you know I did not make moneyfor like the first few years.
So like the first two years andI was at Sage Partners I still
own part of that company, youknow they told me that's what
would happen and they you knowMark Saviors, the guy there he
told me, give it 18 months.
It's going to be tough but it'sgoing to end up working out,
and that's really what happened.

(05:12):
I got married around that time,though, and when we got married
, I owed them like $12,000.
And my wife was.
She got a teaching degree andshe was trying to be a teacher
up here, but the public schoolsystem is in high demand, and so
she had no job.
I owed somebody money and wehad nothing, yeah, but then

(05:34):
literally um, god, by the graceof God, we had this guy fly in
on one of my listings, and I'venever seen it happen.
But he flew in, liked thebuilding, texted me full price
offer, 30 days close, and I madea commission to like pay the
company back.
Wow, a little off for 30 daysclose and I made a commission to
like pay the company back alittle bit of money.
It's crazy.
So from there we you know italways it just kind of snowballs
.
But the cool thing is whenyou're in real estate, I mean
you do start here or go down andthere are people that make more

(05:55):
money than you and they havedecent salaries and all that.
But I just love that.
You the sky is just the limit.
So like you could do a hundredtransactions, you can do 50, you
could do two, and so it's.
There's a lot of factors thatplay into that, so I've just
always been really attracted tothat.

Speaker 2 (06:10):
Right, I like how early on you found that out too.
Like these visions were of tallbuildings.
It wasn't of a bunch of singlefamily homes, it was like you
were attracted to these largerthan life sort of you know early
on like, and it was quicklycommercial real estate.
You know which?
To me, getting in commercialreal estate, what was like
everyone I listened to would theone of the one common themes

(06:31):
was, they would say, is I wish Iwould have got started in
commercial sooner, Like what'sthe one thing you would have
done differently?
And they wish they would havegot started sooner.
So it sounds like just based onthat, your, your path was
pretty quick and and, uh, peopleask that all the time and it
just it almost no matter yourage.

Speaker 4 (06:47):
It just takes a while to do commercial.
Commercial deals are not 30-dayclosings typically I mean
commercial deals or can be.
I mean I had one deal I workedon for literally two years and
then we got to the closing table.
It was a lease and they backedout over like it was like 10
cents a square foot whichcontributed to like I think it
was like four thousand dollars ayear and rent on a big

(07:09):
commercial building, and theyjust came at odds and it fell
apart.
I was like, well, there goes mycommission, but it was two
years.
But then there's other.
Obviously there's positivesthat happen, or you wouldn't be
doing it, but it's just, it justtakes a while to get into it at
sage, were you doing a lot ofleasing or sales, or a mix of
both?
Yeah, so everything.
So we know Arkansas is a smallstate.

(07:31):
You know if you're in Dallas,some big city, you're a office
landlord representative orsomething.
But here we did a little bit ofeverything.
Actually, when Sage startedthere was a couple other
companies that were here.
Colliers was here too.
There just wasn't really acommercial market.
It was all like ex-Walmartexecs that had built some like

(07:52):
buildings for vendors, but a lotof it was just little
warehouses or just land, and sowe didn't create it.
But we were at the verybeginning of like using a
commercial broker to help youlease space or buy something.
Otherwise you'd use like aresidential or something, which
is totally fine.
It's just we just specialize inthose, those commercial type
buildings, right.

(08:12):
And so there's really what?
Yeah, there wasn't much much ofa market here until the early
two thousands, I guess.

Speaker 1 (08:18):
That's.
Yeah, steve was sayingsomething that you said as well.
See, fe, something that yousaid as well.
C Feinberg was, like you know,in a Dallas and an Austin, like
you can be extremely specialized, but like Northwest Arkansas,
you have to like open yourselfup for every category of
commercial real estate.
Do you feel that was that wasthe case and is still the case,
or do you feel like you can be amore refined now?

Speaker 4 (08:39):
I still feel like.
Yeah, going back to yourquestion, it's very general
because there just wasn't enoughinventory in one category and
right now, you know, we have avery high occupancy factor with
all the major buildings, sothere's really you.
If you were just in thewarehouse guys, there's not a
lot of space to lease becausethey're all full which is good

(09:00):
but it um, you kind of have todo a little bit of everything
people try to get you know, putin boxes and I was in a retail
box for a while.
I did some walmart old boxes sowhen they would leave I'd try
to backfill them with somethingand that was one thing that
helped me do what I'm doing now.
I would go to these cities allover the state.
They would leave the marketmainly to build a new super
center, and I would try to putyou know somebody like a movie

(09:23):
theater or tractor supplier orsomebody in one of the old ones.
But I got to experience allthose towns.
But that was a retail stint Ihad.
I was doing a lot of retailwork but there's just not enough
.
So I was selling some land too.
I didn't really get into themultifamily deal until the last
six, seven years, but it just.
It's just not enough to whereto to make a good.

(09:45):
You're just going to get bored.

Speaker 2 (09:46):
Yeah.

Speaker 4 (09:46):
You know, at some point it will get there because
our market's growing so much.
But you kind of have to.

Speaker 3 (09:52):
But in on that sky is the limit kind of opportunity
for you.
If you're right now, like yousaid, if you're specialized and
you're only a warehouse guy andvacancies are what?
5% to 7% on warehouse, if that,then yeah, you're kind of
capped on.
What you can make is what itsounds like.

Speaker 4 (10:08):
So you look, you know a lot of good brokers are
digging up deals that are likeoff market and sending them to
me.
Now, which is awesome, there'sa lot of really good landlord
rep brokers and people are kindof geared certain ways so like,
when you're a landlord rep, youwant to make sure you're very
detailed on like who's callingand track it down.
You want to give the owner andnow that I'm in the owner

(10:30):
position, I like having brokersthat give me, you know, weekly
lists Like well, who did youcall for me this week?
What did they say?
Should we lower the price,whatever?
There's other brokers that arejust bird dogs.
I mean they can go after allthese old calling owners that
have owned property for 20 years.
Would you sell?
Did you know you could get thismuch?
Whatever?
So you there.

(10:51):
There are differentpersonalities that fit, but I
still see all of them kind of doeverything do you have that?

Speaker 1 (10:55):
that really helps you out, knowing what it's like on
their end.
And you I mean you, if you'redoing it yourself and being it
from it.
Now you're like, hey, you know,I bet it, but it's interesting
for you knowing like, hey, Iknow what you're doing it
yourself and being it from it.

Speaker 4 (11:09):
Now you're like, hey, you know, but it's interesting
for you knowing, like, hey, Iknow what you're doing.
Oh yeah, so like because I wentthrough, I didn't like doing
the list.
I mean I always, from day one,I like have thought about real
estate all the time.
Like I mean I think about itlike I'm washing my hair and I'm
like, oh, I should have donethis or that, or this thing
could be available, or whatever.
I think about it all the time,but I'm not the most detailed

(11:29):
person that writes down everysingle person I talked to today.
I want that, yeah, but Itotally get when you don't give
it to me because I didn't wantto give it to you.

Speaker 1 (11:38):
You have some grace, I have a lot more grace.
Yeah, sure, yeah, that's supercool.
So you did race for sure, yeah,that's super cool, so you did.
You did, uh, uh, cushman andwakefield for 15 years, for 15
years, 10 years, is that correct?
And then after that, what?
What spurred leffler capitallike?
How did that come?
Uh, all right, so um you know,yeah, I was just I don't want to

(11:58):
like just skip over the 15years no, I mean I love what I'm
doing.

Speaker 4 (12:02):
now, I love both, but I mean I'm super into what I'm
doing now obviously, um, I wouldsay seven, eight years ago I
had started the idea and mainlyclients saying, hey, I love real
estate.
You know it's interesting, Ihave no idea how to do it.
Like would you buy this with me?
Like not just broker it for me?
Um, and so I did, like not justbroker it for me?

(12:23):
And so I did.
I did a couple of times.
We did a grocery center inLittle Rock and it was like I
don't remember the numbers, butit was like a $5 million center
or something and bought it and Iended up getting some buddies
together and I just ran it.
So, like we found it, put ittogether, we bought it and then

(12:44):
using, you know, sage andCushman in that instance, we
backfilled some tenant spaces,we updated the parking lot, we
renewed some leases and got theNOI up, the income up, and then
we sold it a few years later,made some really good money.

Speaker 1 (13:00):
Was it kind of like light bulbs started, kind of?

Speaker 4 (13:03):
Yeah, well, I wasn't doing it the right way for me,
necessarily, but it worked outgreat for everybody.
You know, whenever you putmoney into a deal and two or
three years later you get abunch more out, that's a good
deal.
I realized it was taking a lotof my time and you know like you
only have so much time, so Ineed to be helping that person

(13:25):
find the 2000 square foot officespace.
But I also really want to putthe steel together over here
where I'm buying it, putting ittogether, and to me it was very
I just took it really seriously.
I mean, the thing I would never, ever want to do is take
somebody else's money orsomething and lose it.
So I'm super into that and so Ijust went yeah, but I can't get

(13:46):
to that until I do my day job.
And it just started conflictingand so of course, covid
happened and you're kind ofbored and I was like, man, this
is a good time to just like doit now.
Now, brokering for 15 years andgiving those deals away was not
the easiest thing in the world,because I'm just dishing out
people, because I know forrecurring money you add that

(14:07):
book of business for 15 years,so it starts coming in just
repeatedly.
But I just knew that I neededto like really spend my time
focusing on the deal I'm goingto do, because my you know we'll
get into my MO of deals.
One of my main one is keepbuying something and making it
better, and so I like buyingproperties, doing four or five,

(14:29):
six things to it and making itbetter, whether I've pre the
outside, inside, add to itwhatever.
It's a lot of work and can't dothat whenever I'm brokering 10
deals over here.

Speaker 1 (14:39):
So would you say, like your ideal buy box is
something that doesn't like need10 to 30 things done to it, but
probably like five to seven,you know, like something that
semi needs it.
Would you say that's your idealbuy box.

Speaker 4 (14:51):
Yeah, I mean, when I buy stuff now, I mean I bought,
we bought some apartments and weadded 40 apartments to the 140.
And that was on kind of freeland in our eyes.
Yeah, and be a buy warehousecomplex, add a building to it.
You know we have a lot ofwarehouse buildings.
We have 25 or 30 of those.
Yeah, and typically I'll go inthere new lighting, new paint,

(15:13):
new parking.
You know, this is the typicalthings that, like when you guys
drive up to a property, you wantto like feel safe and you want
it to feel good and it makespeople want to be there and
lease space and operatebusinesses there, and so,
whether we're adding somethingto the property or whether we're
doing a little TLC, we've doneit on retail quite a bit too.

(15:34):
In Little Rock, in the bigcenter, we did that on a couple
of years ago.
We're just trying to do I don'tknow the number of things I
mean and I'm evolving, I meanwhen I say I've been doing this
seven, eight years, I still feellike I'm new at Like.
Do I really like doing the 20things I gotta do, or would I
rather do four or five?

(15:54):
I'd rather do two.

Speaker 2 (15:55):
Yeah, yeah, but that's a move from brokerage to
investment.
It's so less transact, you knowwhen you're actually investing
it's not as transactional asbrokerage, especially lease,
like that was my question aboutleasing.
You know the retail that islike the most transactional I
think you can get in thebrokerage like selling the home
obviously super transactional,yeah, but I think that's the

(16:16):
beauty of actually investing isso less.
There's some transactionalpoints to the investment but you
know it's three-year deal,five-year deal.
You're not doing it every monthto generate that income, right.
And then also, I think, theother point you see what your
clients, you see how much likethese guys with big pockets,
they're doing deals out thereand you're getting the first

(16:37):
hand look and then putting ittogether yeah, yeah, sure what.

Speaker 1 (16:42):
what gave you the you know you kind of you and your
friends using money?
Like I would say, I doeverything myself right now with
my own money.
Because, like I have maybe fearis right word like fear of,
like misrepresenting, like oneof my buddies, and it like
causing tension.
I'm like I just would justrather not do the deal and just

(17:02):
like keep doing my basic stuff.
Like what gave you theconfidence to take that leap
with you know other people'smoney?
I think that's that's why Ihave big respect for both.

Speaker 2 (17:16):
You guys, yeah, I, I mean single family is such a
solo.
You know it's built to be asolopreneur like you can do like
20 house.
You know 10 single families, 20houses, yeah.
And then when you get intocommercial real estate, whether
multifamily, industrial, youknow it's built to have that
team model where you could bethe quarterback or you could be,
yeah, the coach or the runningback.
You know, um the, you could bethe managing partner.
So, yeah, you know that's.
That's where I was thinking too, right, right, what?

Speaker 1 (17:38):
about you, what gives you, what gives or gave you the
confidence to kind of take is avery like you're bringing a
very valid point on, like therisk and the things that are
associated with actually owningsomething.

Speaker 4 (17:55):
You can't just get a check and walk away like you're
in that deal your name on thedeed, you got a loan and so to
get out of that you have to kindof work your way out of it,
hopefully for a profit yeah um,I just had the.
I think I just had enough.
I had enough brokerageexperience to know.
For years I think I was saying,hey, I know that's a deal and

(18:17):
my client may not have agreedwith me, but I'd be like I know
I could have done something withthat, but I didn't have the
money or the courage to do it.
And it really.
I talked about a little house.
We did, we did the house and weflipped out of it.
We built it to sell, but I wasfreaking out with my wife.
It was like a two-hour door loan.
We were living in WestFayetteville.
I was like we're moving in thishouse because I don't know.

(18:38):
And then, of course, we gotoffers.
We ended up doing like two morehouses in that area.
But after you do one or twothings, all of a sudden I turn
around and I'm, you know, withanother buddy and we're building
eight houses and we're building12 townhomes and we ended up
building like 80 townhomes atFayetteville, like over like
four or five years.
Now it's kind of on the side,but it started out with one.
It was just like I was soscared to death that we weren't

(19:00):
going to make that payment.
But then after you kind of gothrough it a couple of times.
And now on the commercial sideit's the same sort of thing.
People ask me all the time howto get into the commercial
business.
But you just start small andyou go through the process of,
like, getting a loan, puttingyour name on the loan.
You're responsible for thatloan payment and you have to.
You can't just do that.
You got to have some way to paythe loan.

(19:21):
You can't just go sign up forit.
But the act of going throughthat process gives you the
confidence once you get in andget out of it, to like, okay, I
felt good about that, now I cando something a little bigger
would you say that your, yourwrist tolerance, uh, continue to
go up with time under tension?

Speaker 1 (19:40):
would you feel?
Would you say that like yourwrist tolerance has worked out
like a muscle, like, would thatkind of like more you did?
Yeah, I think so.
Yeah, yeah, you mentioned I'mgonna roll right into this you
mentioned like little rock, uh,a little bit, and you're doing
deals there.
How does the little?
Because my, my dad, owns acommercial real estate in little
rock and he always talks aboutlike how different little rock

(20:00):
is than what's arkansas.
What would you say is like someof the biggest differences in
the two areas?

Speaker 4 (20:06):
uh, there's a lot.
I mean, what I, what I loveabout little rock is just the
whole me.
Being from arkansas, I had aton of friends from Little Rock,
you know we went to schooltogether.
They live there now and so it'seasy for me to find something
in Little Rock North Little RockBits and Brights Conway that I
either broker nearby or Ihonestly can just call a friend

(20:28):
and say hey, do people go eat atthat restaurant?
Because I like this buildingnext door to it and they'll say,
hey, do people go eat at thatrestaurant Because I like this
building next door to it?
Like is it?
And they'll say, oh no, do notgo, that's huge, For whatever
reason.
And so we yeah, I mean, but itis different.
Like we have an eight storybuilding at North of the Rock
and I think we paid like 60bucks a foot for it, which is
it's all nice, Like it's a greatdeal Up here.

(20:48):
It would be 400 a foot, but thetenant demand is not there.
That it is up here and you know, office in Northwest Arkansas
is unlike anywhere else in thecountry, and so it's different.

Speaker 2 (21:01):
Actually decreasing this past half with Sys1.

Speaker 3 (21:04):
The.

Speaker 2 (21:04):
Skyline report, which we were just talking about, had
like all this vacancyincreasing nationwide and then
NWA is like just decreasing.

Speaker 4 (21:13):
I know we just made a big bet.
We bought a real big buildingin Bentonville like a nine story
one in December and we'reredoing it right now and I think
people would say you're crazybecause they're living in these
big cities with these bigvacancy rates.
But that's not how we feel.
No more users are coming andwe've owned that building for
three months.

(21:33):
I think we've shown it close to40 times or wow, it's really
good.
Like we haven't even done ourwork to like I have a big plan,
I have a really cool plan for it.
But little rock is just, you getthings a little cheaper.
You got to be really carefulthat you don't overpay.
Yeah, um, but the but the coolthing is like you get into like
little details up here and downthere.
Everybody up up here wants thenewest, coolest thing and they

(21:53):
want to redo it.
Well, what happens when thathappens?
The landlord has to pay forthat, yeah.
So in Letter Rock, you know werenew a lease.
Typically they just renew theirlease.
Like this says in the lease youhave an option to renew.
Up here they're like well, yeah, but can you make all this
different color?
I want a gem.
You make all this differentcolor.

Speaker 2 (22:11):
I want a gem.
You said I put a gem in my sonand quote punch.

Speaker 4 (22:14):
It's just different.
Yeah, no, it's not necessarilybetter or worse, but as far as
we're concerned, it's just youhave to know what you're getting
yourself into.
Yeah, you get a good deal onprice and you kind of have some
you know connections to fill upspace and it's great.

Speaker 1 (22:39):
We own a 200,000-foot thousand foot retail center in
Little Rock.
We just bought 40 apartments inLittle Rock.
We have that the in thatrestaurant.
Yeah, my dad says that he feelsthat Little Rock is like very
like good old boy, like he'slike I haven't.
He's like because he bought hebought a printing business in
Little Rock and it's like howthey do business down there is
way different.
He's like I had to like becomefriends with two people that
would like recommend me to dobusiness.
Because, like he's like I hadto become friends with two
people that would recommend meto do business.
It's like all the business guysjust running their spears and
it's different from up here.
I feel like we're a lot moreopen up here, for really, if

(23:02):
someone's out of state, someonecomes in out of state to Little
Rock, they're like I don't knowwe're not doing business with.
What do you feel?

Speaker 4 (23:09):
I don't feel that way .
I'm from Arkansas.
So for another reason to ask Ilove, I love, you know, when I
have people I deal with to wantto rock in areas and I can know
it's fun to me.
Yeah, I think smaller townsthat want to rock, you know the
smaller little cities, there's alot of, probably that, but up
here I don't know what thenumber is, but half the people

(23:30):
aren't even from here anymore.
They've gravitated in here fromsome other state or country,
and so that's probably why wedon't have that as much here, I
would guess.

Speaker 2 (23:38):
Yeah, yeah, little Rock.
I mean that's an edge havingsomeone to call boots on the
ground in the market.
I get sent deals in Little Rockand I just don't do anything.
It's just a no for me.
Me quickly, just because Idon't have the knowledge.
You know, I, I sell ganglandamerica was there, you know, 10
years, 10 years ago, but youknow, obviously it's not the
same.
You know, I feel like littlerock changes so much street by

(24:01):
street like, and you have toreally know.
Like you know, you may know thearea, but even hey, this
restaurant used to be the spotback in the day but now no one
goes there.
I turn the corner or a spotmaybe used to be not so good and
it's better, yeah, so, but alot of my investors, they sit
right off arkansas as a whole,like arkansas.
We're not looking at arkansas,yeah, we're looking at arkansas,

(24:23):
yeah, now.

Speaker 4 (24:24):
So I think yeah, we, I got that a lot whenever I was
like brokering.
Um, you know, northwest isgetting really like now that we
travel quite a bit, and I meaneverywhere you go, people like
well, I was just there.
Yeah, we were either drivingsomewhere or rain.
We've stopped some random gasstation in nebraska or kansas
and they were on their way hereto go nice, fighting.

(24:45):
It's like it's just you hearabout it and where it's just
cool.

Speaker 1 (24:48):
It wasn't like that you know, 10 years ago right now
I don't know if you you'veheard this or with your clients
as well, kind of on theresidential side of things.
But like I have clients nowmoving here that are like
specifically coming for mountainbiking yeah yeah, I work remote
and we're coming for themountain biking, just for the
mountain biking.
Yeah, just yeah.
Do you know the other stuffhappening?
You're like no, just themountain biking, yeah.

Speaker 3 (25:09):
It biking.
Yep, it's kind of once you seeit, uh it's.

Speaker 4 (25:11):
It's hard to say no people, people kind of just when
you get pleasantly surprisedabout the other things once you
get here.
You come here for the mountainbiking, but then you have a
concert.
You can go to your ted.
These restaurants like this isactually really good.

Speaker 1 (25:20):
Yeah, there's just so much more to do yeah, or they
come here for school and right alot.
I mean, I see a lot of peoplecome here for school and they're
like hey, I actually they'relike 1920, I could start a
family here, yeah, which isreally cool for people coming in
and out of state.
Absolutely.

Speaker 3 (25:35):
I want to go back to on what you're talking about
with.
You know you started a coupleof residential houses and then
you did, you started buildingtownhomes and things like that.
Was that kind of the momentumroller into commercial, or in
that time did you buy your firstcommercial deal?
It was a side business.

Speaker 4 (25:57):
It was like I was still kind of brokering.
That was like a house thing.
We just didn't do that and so,um, I viewed that on the side
now, the act of getting a loanand having that risk of losing
the deal, or that all was there.
But really so, the house stuffreally was not a bunch of
partners, it was like me and abuddy or something.
Yeah, um, the commercial stuff,you know when it's 5, 10, 20
million.
The commercial stuff, you knowwhen it's $5, $10, $20 million
we have to raise, you know 10,20, 40%, and so that'll be

(26:19):
through a number of people.
So they're different.
I was kind of doing them at thesame time.

Speaker 3 (26:23):
Yeah, but they're a little bit different.
Okay, what did your first deallook like?
Was it kind of in the middle ofthat tenure at the commercial
brokerage or something like that, or towards the beginning
Commercial?

Speaker 4 (26:32):
side.
Yeah, but I'm trying to thinkof the first deal.

Speaker 2 (26:35):
You said you had about four you were putting in.
I was going to ask that too,what this newest December
acquisition looks like.
We can kind of run through that, yeah, what you liked about it,
what you're going to do in it,how you structured that to your
first oneushman and you wereputting together that deal.

Speaker 4 (26:52):
I want to say that grocery store deal was.
I don't know for sure if it wasmy very first deal or if it was
one of the top you know firstthree, but it was just a deal,
that you know.
I made a commission on thatsale, which I would be, I would
anyway, but I also ran the dealand had my own money in it.

Speaker 2 (27:09):
It was a grocery store.

Speaker 4 (27:11):
It was the grocery it store.
It was the Kroger Grocery andCredit Center.

Speaker 2 (27:14):
Oh, really yeah.

Speaker 4 (27:16):
So not local then?
No, it was in Little Rock,little.

Speaker 2 (27:18):
Rock.
Yeah, that was when we gotstressed.
I didn't know Little Rock hadKroger.
Kroger is Little Rock.
They're not up here.
I have my thoughts on LittleRock, just increase that.

Speaker 4 (27:34):
Yeah, there are a um, okay, okay.
So I put that together and Ijust did that more as a broker
but I just happened to run theinvestment group and also which
I just I view the investmentrunning kind of you know like
well, you do it too, like that.
Running the investment of adeal to me is just a lot more
than being as far as a lot moreinvolved than being a broker.

Speaker 2 (27:50):
Was that a couple?
What was the size of that witha couple friends?

Speaker 4 (27:53):
I think we, I think I want to say six to eight people
.
Six to eight people, okay yeah.

Speaker 3 (27:58):
And you're really looking for an opportunity to
really add value and then exit.
Is that add value?
Fill the vacancy.

Speaker 4 (28:05):
Yeah, I just I have gravitated towards.
I'm not really the best.
I'm not really the best, youknow, new development guy.
I have a new partner, bradfordGaines, that he joined last year
and he's really into newdevelopment and I wanted him.
We just matched up because hedoes a lot of that and I have
done it, like I've done thesetownhomes and we've built some
commercial buildings.
But you've got to be on thoseeven more.

(28:27):
You've got to be going throughthe sending process, making sure
the contractors are on time andon budget.
Do you know where your tenantto get in the building we bought
?
I bought a.
Actually I have a Starbucks.

Speaker 2 (28:36):
We did two in Fayetteville actually, and so
you said your philosophy is makethings better.
Like, how do you do that with aKroger and a Starbucks?

Speaker 4 (28:43):
So the Starbucks still had a vacant space next to
it, and so we filled it up, andthen we sold it.
The Kroger there it.

Speaker 2 (28:55):
uh, the kroger there was a shopping center next to it
, and so we, I want to say,executed three or four leases.

Speaker 4 (28:58):
Okay, so kroger anchored, it wasn't just the
kroger center, two other outparcels.
Okay, we put um, a liquor storewas out of their lease, so we
put a new 10-year pizzarestaurant and there we did the
parking lot, cleaned up thelandscaping, uh, renewed some
leases and then in that end lineI think, we filled them up,
actually, like it had somevacancy, but once we made it
look better it was a little biteasier to lease and so then,

(29:21):
yeah, we sold it to them.
I grew out of that nationalregroup after we were done.

Speaker 1 (29:26):
It sounds like, with all the things you're doing,
there is the ability there foryou to get spread really thin
every now and then.

Speaker 4 (29:34):
Well, when I'm doing that, if I had to broker 10
deals or whatever over here,it's really hard because that is
my day job.
So when somebody calls me andneeds me to help them buy a
building, I needed to go do that.
But then I'd go do thisafterwards, which was typically
5 o'clock or later.
But now that we've got I meannow we have like 80 buildings um
in complexes throughout litterrock and up here that we own,

(29:58):
and when I say me or weedsalmost every deal I have
partners yeah and so I'mrepresenting the that bought the
property.
But we've got quite a bit nowand we have calls every week on.
We put solar panels on thebuilding recently.
We want to reduce our electricbills because some of our office
buildings they can be 10, 20,30 grand a month.

(30:19):
We're working on new leases,stuff like that.
So there's all this stuff thatis just really involved in
owning a building andrepresenting the group and I
feel ultimately responsible thatwe get out of that thing,
whatever we do.

Speaker 2 (30:33):
You know right and so If you're investing with
somebody, you better make surethey have that same mindset that
someone's.
If you're giving someone moneythat you want that same mindset,
you have that like kind offiduciary mindset, almost like
obligate, as if it's your own.
So I feel like that's a greatkey, not only to invest with
someone, but probably part ofyour success too, that you had

(30:53):
that mindset.
When did you go full time?
Leffler Capital, Like LefflerCapital, I guess, started kind
of at Sage Cushman and then whenwas that?

Speaker 4 (31:03):
Yeah, we had a really good kind of parting.
I mean, I still own part ofthat company with them on the
board.
I use them quite a bit, but Ialso use other firms and I have,
I think we've got three or fourtotal management companies that
report to us weekly on our todifferent whatever the property
type is, and I mean we must havea handful of listing brokers
that that different companiesthat work for us and trying to

(31:25):
help us fill up our vacancies.
That was around 2020.
I think it was 2020.

Speaker 2 (31:31):
2021.
Yeah, yeah, so three years.
You had been doing it for aboutthree years.

Speaker 4 (31:37):
Like I said, I was doing it before.
It was just kind of ahodgepodge way of doing it and I
realized, like you know, to dowhat I to have this many
buildings and I want to have abunch more and I want to have.
You know, we're like 250, 250million roughly in real estate.
I want a billion and I just,but in order to do that, I can't

(31:57):
, I couldn't be a broker to cutit out.

Speaker 1 (32:01):
What?
What on the horizon?
Do you have a set goal for?
Like when?
When you want to hit a billion?
In what time frame?

Speaker 4 (32:07):
I don't think like that.

Speaker 1 (32:08):
Um, I don't yeah, I mean you know of course lots of
people do.

Speaker 4 (32:12):
Seven year, five year , they have so many I've never
had.
I've always had an issue withhaving, like, well, I have to
execute this many transactionsor whatever, because I just
literally think about this 24hours a day and so like I've had
dinner with people and like,like, and so I don't want to buy
a bad deal and you know, we'reseeing anywhere between 15 and

(32:34):
20 deals a week.
That's cool, so I could saylet's do 40, but then they're,
they're 30 and maybe bad, yeah,and so I we're we're just doing
our best to evaluate the deals.
We don't really have athreshold of, you know, deal
size yeah because when I I dofeel really confident when I get
the deal kind of put togetherthat we'll be able to execute on

(32:54):
it.
So it's not like got to have abillion in five years or
something, it's just I just wantto grow.

Speaker 1 (33:03):
That's cool.
My goal for 2025 was to have nogoals.
Because for years you're likecaught up in the grind culture
and you're like I got to do blah, blah, blah.
And Because for years you'relike caught up in the grind
culture and you're like I got todo blah, blah, blah, and my
wife was like you need to haveno goals this year.

Speaker 3 (33:14):
I've thought about that a lot because I feel I've
always had a goal of buying somuch in real estate every year,
and especially this year, andI'm now like we're getting past
the first quarter and you'relike I haven quarter and you're

(33:37):
like haven't bought a deal yetand then you start pressing.

Speaker 2 (33:39):
You end up like not buying a good deal, and so it's
better just to to wait for the.
That's not just a determinationof the market.
We're almost like, yeah, wedon't need goals anymore.
That's not uh.
I think goals are that good Ithink it's how you're made.

Speaker 4 (33:46):
I mean the hell the whole.
The way I do this whole thingis just how I feel like I'm kind
of made and it's not there.
It's not the only way.
It's how you're made.
I mean the hell the whole.
The way I do this whole thingis just how I feel like I'm kind
of made and it's not there.
It's not the only way.
It's not necessarily that Iwould.
Yeah, but like, if you'resomeone that needs goals, you
make goals.
Um, there's always dreams.
I mean, there's things you know, like I always wanted a toyota
land cruiser and I bought when Iwas like 25 or something.
Yeah, but what's next?
like I don't like I'm not gonnalike have some sort of I just I

(34:11):
just I just know that I'm doingit every day and I want to do it
the right way.
But goals obviously here areawesome to you if you need them,
but to each their.

Speaker 2 (34:19):
I mean, yeah, it's so specific and if you're out
there doing it like, what's itgo?
Why do I need to create a to-dolist for tomorrow?
I already have the emailsunread that I need to do
tomorrow.
It's like, yeah, I think, butsomeone might need the hey, like
I'm going to write out the fivethings that must be done
tomorrow.
Or you know the goal of, yeah,we're going to do 1 billion 2035

(34:41):
, January 2035.
You know, I think there's somany different ways to go about
that.

Speaker 1 (34:45):
Something I hear from both of you guys is the ability
to underwrite.
I've heard from Brian a lot tounderwrite just a piss ton of
deals and say no Like having theability.
Was it having the ability tosay yes, but like also saying no
, like I thought that was reallycool Cause, like last year,
well, how long was it beforey'all did your first deal?

Speaker 2 (35:06):
Yeah, I mean you have to underwrite a lot more deals
right now.
I'm saying this thing, yeah,like yeah for for the
syndication.
I mean they probably underwrotelike 300 deals and did one deal
in 2024 yes, just to show you,like the market where it is.
And you know personally, it didyou know a few smaller deals,
the joint venture, but you know,I 2021, you know I was making

(35:28):
goals of doing.
You know, all right, I'm gonnado six deals this year.
You know, try to.
You know I was making goals ofdoing.
You know, all right, I'm goingto do six deals this year.
Yeah, try to have, you know, adeal every two months.
But you know, then you startkind of just doing it and it's
like okay, maybe I don't needthese goals.
When you guys just said thatlike maybe take a break from
goals, like, I honestly was likeat the end of the year,
beginning of the year, thinkingthe same thing.

Speaker 1 (35:46):
I Just like just because you're so doing it.
Kyle Atkins, my brother, hegoes him and I are really close
and he's like you are just likeme and like if you have goals,
you're going to like pop a bloodvessel in your head, like you,
just need.
He's like what's a goal goingto do for you.
He's like with or without thegoal, and so it was a cool thing

(36:08):
that he told me.

Speaker 4 (36:09):
Well, and some people I mean nothing wrong with this,
but they hit that goal andthey're done.
I will never be done.
I don't think I'm not going togo hunting for three months
because I hit a goal.
I'm always going to kind of,Are you a hunter?
No, I mean, I do it withfriends when they put it all
together.
I didn't.
You'll.
You'll go up and shoot a lot ofoutdoor stuff and you know the

(36:29):
bike.
We're into biking, we did golfand just so many cool things to
do up here.
Especially with the weatherthere's not enough time to do it
.

Speaker 1 (36:38):
So yeah, but we're kind of in the outdoor yeah,
yeah, tell me um, a little bitabout, and you could not have a
story like this of maybe alesson learned or something gone
wrong.
Um, and maybe the last sincestarting left like and it's cool
that you you learned, but ifyou don't have one, that's no, I
mean I'm sure I do I'm sure Ido.

Speaker 2 (36:58):
I don't, I don't not get caught up with goals or
failures.

Speaker 1 (37:01):
Yeah, I'm definitely still learning.

Speaker 4 (37:05):
I mean, I think that you know we we do get pitched
quite a bit of deal flow becausewe trade brokers.
Really well, I think we do, Iwant to because I was one and I
feel like they bring value toyou know, I think some.
I mean there's some deals thatliterally I bought because the
landlord was marketing stuff onmy Craigslist and I knew if I

(37:28):
had like a national, you know,of presence, we would get more
red, better tenants, and so thatI mean I value that.
So we see a lot of deals.
I think communication is just areally big yeah, you know, like
you know you were saying,saying no to a deal like I don't
want to say no to, I want tosay yes to every deal.
Yeah, and up here, especially,some people are like why I can't

(37:49):
believe you're not say yes toevery deal.
And up here, especially, somepeople are like why I can't
believe you're not saying yes tothis deal because it's going to
appreciate and all this.
But the people are here, it'sgoing to be worth this and it's
just what my gut is comfortablewith and not.
And I had to learn a lesson oflike saying no like a little bit
earlier Because it also bogs medown, because those deals if

(38:12):
get, you may say you're lookingat 30, 40.
There's not really a way for meto look at 30, 40 deals like.
I kind of have to get into itreal quick and if it just
doesn't fit our box I just pass.
And not only do I pass, I tryto give them another buyer
because I want that person tomake it sale.
It's just not with me and thatperson may make a bunch of money
on it too and I I hope they do.
It's just not what I feel.
I need to go to sleep everynight feeling good about the
decisions that we made on thedeals and I don't want to like

(38:35):
overstretch or just buysomething because somebody
talked me into it and so it'sprobably more of being okay
saying no things.

Speaker 1 (38:44):
Tell me if I'm wrong or right on this.
It sounds like when you analyzea deal when you do, it sounds
like when you analyze a dealwhen you do, it sounds like you
have specific things you'relooking at really quickly to go
like is this worth my time?
Like and I guess you have youbeen able to refine that over
the years of like how does thisget me to a no?

Speaker 4 (39:01):
yeah, we look at deals.
We um, I've got a great youknow account at financial model
guy that comes in with us and wecan make models pretty easily.
But like we kind of look atthings on cash, on cash returns,
so like, if you give me 10,000bucks, what am I going to give
you back every?
Am I going to give you back twogrand, like a 20 return, or and
if some deals are like a three,four, five percent return after

(39:24):
you do what I kind of want todo to it, it's probably not a
deal.
Yeah, I'm just.
I mean you can change thingsand make it a little bit better,
you can act like you can buildsomething cheaper or get your
interest rate lower, butultimately you know we're
nowhere near where I need to be.

Speaker 1 (39:38):
So I just kind of, so you're able to bet it pretty
quickly, yeah.

Speaker 4 (39:41):
We do things like that.
I mean otherwise, you know,part of what I do is I tie kind
of the properties up, all thethird party reports and due
diligence I'll spend on my dime,and if we don't buy it, I eat
it.
And so I don't want to do thatunless I feel pretty good about
it.
So, yeah, I'll bet out stageone.
Kind of the numbers are likehey, I just can see something's

(40:04):
really wrong with it.
We'll throw it out, we go thenext step and we'll spend some
money on third-party reports andsomething comes back.
I mean, we usually are prettyconfident by then we're going to
do something.
Yeah, yeah, but yeah, we cankind of Pretty quick.

Speaker 1 (40:24):
What we're going to kind of.
We've touched on this a littlebit, but what are some
challenges you're seeing in theNorthwest Arkansas commercial
space, like for?

Speaker 4 (40:27):
the right now and in the coming years.
So in my shoes, as, like, abuyer, on the buyer side,
everybody thinks their propertyis worth a trillion dollars.
I mean it's just the bestmarket ever.
It's going to be double andless and so you need to pay me
more, and sometimes it's correct.
And every once in a whileyou'll see this crazy sale like
how in the world did that sale?

(40:49):
And there's something to to youknow, but that doesn't mean
everybody's property is worththat.
So funneling through that iskind of a challenge to kind of,
if you're wanting to be a buyer,you know that's like you have
to funnel through quite a bit ofdeals to make, get the right
one to work.

Speaker 2 (41:03):
Yeah, you said earlier you were talking about
how well you treat brokers andpeople always say, like having a
good attorney like they'reworth their weight in gold.
Having a good CPA is they'reworth their weight in gold, but
having a good broker isdefinitely worth their weight in
gold.
Just the transactionalmanagement alone.
Like crazy ass sellers that arelike all over the place that
could be.
You know, usually it's theolder ones.

(41:25):
I always like joke, like am Igoing to be like go crazy when
I'm like the old guy sellingstuff that I've had for 20 years
?
But they can chase down thedocuments and help you and and,
yeah, you know, bird dog, youknow, maybe they've been calling
that owner for seven months,you know, or you know, or plus,
and so I think that's a huge uhvalue and there's a lot of good

(41:45):
brokers here.
Uh, you know, in northwestarkansas and I feel like it's
you know you talked about LittleRock being a good old boy area,
but Northwest Arkansas it is,you know, like For sure
Networking and your name is bighere.
Yeah, I think that helps in thecommercial, you know, besides
the low vacancy, I don't know, Ithink you know how does the C

(42:08):
class and B class.
Compare to it.
Is there even any C class and Bclass in Northwest Arkansas in
the commercial leasing space?

Speaker 4 (42:16):
Some of the warehouses are a little older.
I mean they're old, yeah, youknow, because it costs.
One of the other issues is itcosts a lot of money to build
stuff, like the cost of goingthrough the room.
You know the cities are gettinga little harder to deal with,
but it's because they're dealingwith growth, so like they're
not used to like having so muchdeal flow come in, like Rogers
just went through that bigrezone of all their property.

(42:37):
I mean they're having to changeeverything because so much is
coming at them.
So that's a challenge.
And then the costs are just kindof they're high, okay, and so
when you and then the land costseverything's, you know the
land's worth a lot.
So you add all that up and thenyou try to put your tenant in
there, whether it's apartmentsor retail or whatever.
It's hard to make that dealwork.
So I bought a lot of secondgeneration space that's already

(43:01):
existing and that's why I kindof like buying it lower, making
it a little bit better.
But every time I kind of buysomething and it works, the next
deal is kind of similar.
But it's all of a sudden pricetire because it kind of figures.
So it's hard.

Speaker 2 (43:13):
It's hard.
That's a challenge, yeah.

Speaker 3 (43:15):
How do you just going back to that, how do you feel
like you know we're talking alittle bit about good old boy
and stuff like that?
How do you feel like reputation?
I mean, it's a.
It still feels like a smallertown around here and reputation
is such a big thing, especiallyin this business.
How long did it take you youfeel like to get to a point
where you know you have brokerssending you deals?
Was it after you had experienceof doing one, two multiple

(43:39):
deals and putting together atrack record?
Or how long until you felt likeyou had enough momentum to
where brokers were reallytrusting you and sending you
deals?

Speaker 4 (43:47):
That was hard because you know, I at that Cushman and
saying, and so I love thosepeople, but I wanted to deal
with the other brokerage shopsalso.
So that was a challenge becausethey kind of thought are you
really on your own or are youstill kind of a competitor?
And just you know, so we, Igave my license up, so I don't
have a license.

(44:07):
It yeah, and I, I mean that'sone of our jobs at our company
is trying to make sure thebrokers know that we want to see
the deals.
I mean I don't love gettingdeals that got listed by a firm
through another broker.
It happens all the time andit's fine.
But I'm like, man, you shouldjust send it to me, because then
we can work together, because Ihave the brokerage knowledge of

(44:30):
how to do a deal, because I wasthat for so long.
But you know, it was a process,for sure, it still is a process
.
People sometimes are like, oh, Ishould have just, you know,
sent that to you or whatever,which is so just going through
that.
And then, you know, even peopleat Sage sometimes weren't
sending me deals because I wastheir broker partner.
I wasn't like I'm not, theydon't view me as, like the spire

(44:53):
guy, they view me as kind oflike a co-broker guy.
So you know, having to educatethat has been a process.
It's really not been that bigof a deal, but we do.
We kind of take it seriously,like I.
One thing I would like to do ismore of like broker
appreciation step, because Ijust want to be in their face
like hey, because what happensis there's a lot of me and so

(45:14):
the broker's talking to me, wehave lunch yeah well then, a
week goes by, he forgets aboutme, somebody else is in their
face, and then a listing pops upand that's who gets it.
So I just we.

Speaker 2 (45:24):
Yes, timing is key.
Timing is key.
And then if, if, to be controlthe time, you know timing, a lot
of it is out of your, but tocontrol that aspect is just
being in front of them.

Speaker 1 (45:34):
Yeah, that's huge.
I've been working onsystemizing, being top of mind,
because it really and gettingsome systems and processes for
top of mind is something we dealwith a lot in the residential
world, because everyone I mean,I'm sure, in the commercial
world as well everyone knows areal estate agent, and so I've
been like, how do I continue tostay top of mind to these people

(45:56):
that, hey, zach Stainley justsent them the Skyline report.
That was incredible.
And then they see it at homeand they call the listing agent
because they don't know anybetter.
They're like well, I just lost$12,000.
And that's been.
I think that's really, reallybig.
What you talked on is stayingtop of mind.
Is it's hard because, like youand I and we've all had deals

(46:16):
before that like I'm the onlyone north of ferguson that knows
about this and the personthat's that has been pinging me
the most yeah, hey, buddy, likeI know you're pre-approved, you
got, you're ready to go, blah,blah, there might be 10 people
that might do the deal, but like, like this person's been like
every I've had a few peoplereally like more of the
commercial guys that know this.

(46:36):
They're like I'm going to do agood job of contacting you
because I know you have 10others of me and so I I just to
highlight on what you said.
That is huge, brent.
Would you concur, brandon?

Speaker 3 (46:47):
Yeah, for sure, I think I think it's so important
and I'm kind of, you know, Ithink a lot of people do it in a
lot of spaces, like his emailand uh and he and so now, yeah,
and so he's now finally, in thelast year to two years, he's

(47:16):
getting all these deals frombrokers because they just know
his company and he's been top ofmind and so even as a buyer, I
think it's huge to be top ofmind and then reputation,
obviously as a guy, that is isif you know, if you're going to
go down that path, that you canclose and you're willing to
close, so much that.

Speaker 1 (47:35):
I wanted to highlight one last thing as far as, like,
getting deals done, theunderwriting process.
When you're approaching thecity, do you view them?
I probably know the answer tothis.
Do you view them as this ismore for the listener do you
view them as your enemy, or howdo I work with you?
How do do I know there's redtape?
I you know you're growing.
I have some grace for you.
Like, how do you approach thatwhen you're working with cities,

(47:57):
because I know some people justlike God this is a city I get
frustrated.

Speaker 4 (48:01):
I mean I yeah, I don't have the best education in
getting something through thecity 's just I just I think I
have kind of grace for everybody, probably like by default,
but like when they're getting somany deals thrown at them, it's
, it's hard.
Now I wish you know we even.

(48:22):
It's kind of hard to evenschedule a meeting sometimes
because there probably are 40deals, just like mine trying to
get in line yeah and so you knowI'm sitting here looking at
this deal, hang up on the phone,this deal.
They're all different.
That's what they're doing too.
I'm bringing you this deal, butthey need like their names on
the approval, and so, like theycan't just tell me yeah, just

(48:42):
whatever, yeah, that sounds good.
They have like really get intoit, and so I have like sympathy
for them.
For sure.
I wish, of course, it was alittle more streamlined.
I mean I wish they could hiremore, you know more people just
to be able to cater to all ofour needs.
But yeah, I mean, it's just atough job.

Speaker 1 (48:58):
You think a solution is getting rid of a lot of the
red tape there, or do you thinkthe red tape's needed at this
point?

Speaker 2 (49:06):
I mean it depends on there's so many yeah, you know,
every city is a little different.
Sounds like hiring a couplemore people would help.

Speaker 4 (49:12):
Yeah, I've always thought that you know how much
we're growing.
If you kind of bet on thefuture of like, there's going to
be more deals next year thanthere are now and we probably
have seen that over the last 10years, so we should probably
proactively be ready for thenext year.
And that's the same thing withinfrastructure on roads or

(49:32):
anything else.
Like you know, you're alwaysbetting on something in real
estate.
I've told people that too.
But like our area is like areally good thing to bet on.

Speaker 2 (49:40):
Yeah, I do.

Speaker 4 (49:41):
I mean, there's just so many good things happening
and you'd have to, like you know, walmart would have to leave,
the university would have toshut down, like all these major
things.

Speaker 2 (49:50):
That we have some bigger issues.
Is it possible?
There's a lot of anchors, yeah,that have made themselves clear
that they're going to continueto be anchors, yeah.

Speaker 4 (49:58):
Yeah, and so for betting on the area which I
think we all are, because webelieve in it, like we should go
ahead and not plan for twoyears out, but plan for five,
ten years out.
That way you can handle theflow.

Speaker 1 (50:10):
It's like them having one more lane to road.
I'm like can we just push it atthe start?

Speaker 4 (50:14):
Like four more.
As soon as that 49 got expandedI was like it's not big enough.

Speaker 1 (50:20):
Not big enough.
That's crazy, tj, thank you forcoming on.
Thank you for your knowledge.
You guys have some closingthoughts for us.

Speaker 2 (50:30):
I want to take a deep dive Before we close off, and
it's been great, your knowledge.
You guys have some closingthoughts for us.
I wanted to go deep before weclose off, and it's been great.
A lot of like lessons andcommercial real estate life.
Oh shoot, I forgot a question.
Business, I wanted to go intoyour deal you just did.
In December you started to talka little bit about how you
structured that, what kind ofdeal specific what you're doing?
It sounds like a commercialbuilding.
Yeah, we can.

Speaker 4 (50:50):
Sure, yeah, bought a nine-story.
It's like 250,000-foot officebuilding.
It's in Bentonville, so it'soffice and that's.
You know, like I said was scaryto some people, but if you live
up here you kind of see theactivity in the office market.

Speaker 2 (51:06):
What was the transaction sale?

Speaker 4 (51:09):
It was roughly a little less than $40 million $40
million, yeah.
So we raised about almost halfand so we got a non-recourse
loan.
So the investors don'tguarantee debt, which is nice
for them, but it was prettyvacant and honestly, it
appraised for a lot more than wepaid for.
We got a good deal.

(51:29):
I mean I think that's $150 afoot roughly, which to build
that new it's got from what I'mhearing is $400 plus a foot All
in with laying everything.
So we got a good deal on it,but it's vacant.
It's like 30% vacant.
So our job is to go in thereand fill it up.

Speaker 2 (51:47):
And for the listeners a market vacancy of 6%, I think
, for Bentonville or less.

Speaker 4 (51:52):
That's correct, and so we have already gotten a
handful of tenants in there.
I think we're I believe we'reclose to 80% occupied now.
But we, like I said, we'veshown it a number of times and
it's getting really goodactivity.
But what our plan is?
Well, on that particularbuilding, 8th Street opened up.
It goes right to the buildingfrom the interstate.
So the access has not beenthere for a few years.

(52:13):
Now it's there.
Yeah, we all think the currentcampus is going to do something
cool, you know, at some point.
So that'd be great.
But really, as far as officegoes, what I want to do to it is
just amenitize it Like I don'tknow.
Many other buildings around aredoing what we're doing, but we
have all these kind of you know,the subject to final approval
because we're getting all of ournumbers together, but we're

(52:33):
we're actively working on apickleball court for the
buildings.
So what year was it built?
Uh, it was built.
Oh, four and four, okay, no.
So it was honestly a littlesore thumb me when it popped up
because it was nine stories andI'll look down.
But now that buildings havekind of come up around and it
looks like work, um, but, butfunctionally it is a Class A

(52:54):
office building and it looksgood.
I just want it to be built cool.
So we've got music, we're goingto put in it.
We're going to redo LED lights.
We're renaming the building.
We're going to let you bringyour dog in the building.
We have a golf simulator coming.
We did the pit bull e-bikes.
We actually just bought a golfcar to be able to take you from
the building to the current, thenew I'm sorry, the new campus.

(53:16):
It's like a mile away, but ifyou think about it, getting in
your car, driving a mile,getting in the parking garage in
, say, 10 minutes, yeah, so it'skind of like a concierge
service, and so we're.
This building, to me, is goingto be more of a community,
almost not, I mean, I don't wantto say a apartment complex, but
when you're a part of ourcommunity you get access to like

(53:37):
playing pickleball at nightwith your friends or using the
golf simulator.
One, two, we have like a bunchof conference rooms that we'll
let you use for free, a hundredperson meeting room that we're
gonna let you use.
You can run our e-bikes, youcan take the golf cart, which I
don't think has been done uphere.
All that together, and so Ithink it's going to take off.

Speaker 1 (53:56):
I think Tom Allen was talking about creating some of
those amenities and somebuildings that like, hey, you
can be at your office and goplay pickleball.

Speaker 2 (54:04):
Yeah, he started talking about the walkability.
The Visionary Project is prettycool.
Yeah, it's really cool.
So $40 million and you'reputting 20 million, and how much
of that is capex or what was uh?

Speaker 4 (54:15):
No, we've now.
We're only gonna put a couplecoming on.
I think a building is alreadylike it's very functional in
equity.
I meant sorry.

Speaker 2 (54:23):
Oh yeah, we're a little bit under 20 million in
equity, so couple million andcapex and then the loan was just
a lower LTV just because of howbacon it was and yeah, I just
on this one.

Speaker 4 (54:35):
I mean I'm making a pretty big bet, then I can.
I told everybody, you know, Ijust told you how it's going to
be really cool, and so I did notwant, uh, I didn't want anybody
to guarantee debt, yeah, overleverage it gotcha as what does
that tenant base look like inthat specific building?

Speaker 3 (54:51):
is it vendors?

Speaker 4 (54:52):
Yeah, it's mainly vendors.
There's a couple, yeah, I meanit's just typical office tenants
.
Some vendors have been therefor 20 years.
They're thrilled with it,others are kind of brand new.
The building, you know, like Isaid, it's a nice looking
building.
It's just kind of been therefor a while.
It's not that everything uphere to me is like what's the
newest thing coming or beingbuilt and it's not.

(55:13):
It's not that, even thoughfunctionally and it looks good,
so we just want to freshen it up.
So there's a lot of people thatdrive by it, kind of like and
we did this riverdale shoppingcenter project that had been
there forever but you just driveby it and you drive by it over
and over and you don't even lookat it because it's just been
there for 20 years.
Now we're giving you a reasonbecause it's got, you know,

(55:33):
fresh paint on it, led lightsand all the murals and things
we're going to do.
So you're going to pop yourhead over there and hopefully go
in and then see all theamenities.

Speaker 3 (55:41):
Why do you feel like y'all are having more success
previous to the last ownershipwithout doing any work to this
point?

Speaker 4 (55:48):
I really don't know.
I mean, we have a great grouphandling leasing.
We have like pretty intenseweekly calls with like six,
seven people that go over allthese things that we're trying
to do.
But I think anticipation ispart of it.
I think anticipation of theirhearing that all this stuff is
coming and they want to be apart of it.
That's it's not just that.
There's a lot of things, Ithink.

(56:09):
But like've got a great leasingbrokerage team, but yeah, I
think of the anticipation.
Like I said, people like newcool things.
I think they're kind of Kind ofpainting a vision for them.
I just got to perform that'swhat I think about at 3 in the
morning.

Speaker 1 (56:29):
You talked about people drive by.
Are you doing something to likethe outside of the building
where, like, maybe people noticeit?

Speaker 4 (56:36):
yeah, we've got some like mural ideas.
Of course, new signage we kindof took off most of the signs on
the building.
It was like tenant names thatwe will rename the building.
We've got renderings to paintthe building but we're not
having finalized.
But I've got these cool likeled lights I wanted to hang on
the building.
I just, you know we're we'retrying to stay, we're we're
doing all these things.
We've got like 20 things on thebudget and we don't know where

(56:59):
they're all going to come.
So as long as we can kind ofkeep it within budget, yeah,
don't want to overspend.

Speaker 2 (57:04):
How long do you plan?
Is that a five-year hold foryou and your group, or a 10-year
three--year?
How do you structure that?
Where do you tell yourinvestors?

Speaker 4 (57:10):
So, since I'm not like a fund guy.
I usually tell everybody we'reholding everything forever
because I don't want them tofeel like we're going to get out
of it in a year.
Typically, though, in myhistory my short history what I
do is I try to add all the valueI can add, and it may take two,
three, five years to do that,and then we just look at it.

(57:31):
I'm like, okay, is the marketready?
You know, like multifamily 201920 was like super hot.
Uh, actually it was later thanthat.
It was right before the racestarted going 20 real you're all
19 to 20 22.

Speaker 2 (57:44):
That was the time.
2022 is when it's to go down.
Right.

Speaker 4 (57:47):
That was the time to sell your property.
Yeah, I mean, I had deals inthat year where I have I mean, I
still have some like three anda half interest rates all the
way up to like six and a half inthe same year, which is just a
really big gap when you'retalking these big numbers.
So we're going to look at thisand see if it's time to sell the
office.
We will, you know, office to me.
I still have a story in theback of my head where office is

(58:08):
going to come back, um,nationally a little bit more,
and if it does, I mean it's timeto sell.
But we haven't, we just hadn'tadded the value yet.
So when we get that value addedand if it works and we do fill
it up, we fill it up, it's, it'dbe great.
Yeah, um, and we're, if we'refor sure, on our way to doing
that, which is which is good tofeel.

Speaker 2 (58:26):
We just bought in december, so that's it's a
really good thing.

Speaker 4 (58:29):
I'm like that things are happening and then, like 8th
street opened up like six weeksafter we bought it, which it
hurts and it helps.

Speaker 2 (58:34):
I mean and WA helps with momentum and for sure you
can count on that.

Speaker 1 (58:39):
Yeah, for sure I wanted.
I wanted to end with thisquestion, um, and I was actually
walking all night tonight.
We walk like fable every dayand we're always talking about
business and stuff.
I love that I have a wife thatloves talking about business and
stuff.
I love that I have a wife thatloves talking about business.
She said you should ask like,what did?
Like I want to start asking ourpeople to come on, these high
capacity, like high risktolerance people Like what did

(59:00):
you have to sacrifice to get towhere you are today?
What things did you have togive up?

Speaker 4 (59:05):
Man, that's a good question.

Speaker 1 (59:06):
Yeah.

Speaker 4 (59:08):
I think for that's a good question I think mentally,
you know, internally for me likeI've learned a lot about myself
, like over the last four orfive years, like what kind of
person I am like on the outside,pretty easy going and nice, but
it just eats me up if somethinggoes wrong.
I don't want anything to gowrong with the news, some
constantly.
So when you're, when you'refeeling that way and you're not

(59:31):
communicating those not to gettoo feely emotionally but not
communicating your feelingsabout what you're feeling Like
honestly, my wife's done reallygreat about helping me process
like this day was not good orthis thing didn't go right and
why didn't it go right?
And instead of me justinternalizing it, I mean I
actually run like Fable becauseI process in my own head but to
communicate with somebody elseright.
And instead of me justinternalizing it, I mean I

(59:51):
actually run like Fable becauseI process in my own head, but to
communicate with somebody else.
So for a while it was hard tocommunicate because I was just
internally just, I'm just goingto figure this out, figure this
out.
Well, I started waking up atthree in the morning because I
can't get these like thoughtsout to somebody, and so I was.
That was a challenge for awhile, now that we kind of have
this and my wife loves talkingabout business, so the more I

(01:00:16):
communicate how things are andalso, too, talking to investors
I don't think investors thinkevery single thing is going to
go perfect, and I think theythink that way, but I don't
think they know deals.
You get into a deal, there'srisk, and so I think
communicating that is a plusthat I kind of struggled with

(01:00:36):
from when I first started.

Speaker 1 (01:00:38):
Yeah, that's a really great way to answer that.
My wife's a therapist.
Oh, okay, excellent.
We actually have like for aperiod we'd have Monday evening
therapy sessions with like she'dlike put on her, like she's
like I'm no longer your wife,we're going, gonna talk about

(01:00:58):
business and stress and stuff.

Speaker 2 (01:00:59):
So I I appreciate your answer on that.
All shout out to the wives andthe husbands and the partners so
yeah, yeah, sure, so definitelygreat way to close this one.

Speaker 1 (01:01:04):
Yeah, tj, thank you for coming on.
Yeah, thanks for having meappreciate it.
Thank you come back on, uh, thenext episode to see Dave Pinson
.
All right, thanks, guys.
Yeah thanks.
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Speaker 3 (01:01:25):
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