July 15, 2025 • 21 mins
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Like a metal building , is like a pre-assembled Lego
set, like when you get thepackage there's directions how
to put it up, kind of like aLego set, and it's not very hard
to put up.
Honestly, you can find a metalerection crew pretty easily.
Speaker 2 (00:13):
So the big question is this how do real estate
investors who don't have a tonof free time, don't have access
to off-market deals and didn'tstart life on third base, how do
we conservatively grow our realestate business to support our
families, finally leave thecorporate rat race and build a
legacy?
That is the question.
This podcast will give you theanswers.
(00:34):
I'm Ed Matthews and this isReal Estate Underground.
Greetings and salutations, realEstate Undergrounders.
It is Ed Matthews with the RealEstate Underground.
Thank you so much for joining usagain today and making us a
part of your day.
For those of you out there whoare getting value first off,
thank you.
I'm grateful for all thelisteners.
I'm grateful for the emails andtexts and I love the ideas and
(00:58):
the concepts and the otherguests that you are suggesting,
so keep them coming.
Thank you very much for thatthat you are suggesting, so keep
them coming.
Thank you very much for that.
Also, if you are new to theshow and you do get value, I
would be very grateful if youfollow us, because that helps us
grow.
So with that, let's get into theshow.
With me is Alec McElhaney, andhe is the CEO of Landplay, one
of the reasons that I lovehaving guys like Alec on the
(01:20):
show is multifamily.
In a lot of markets it's playedout, at least for a little
while, and so active investorsare dry powder on the sidelines
looking for other reallyinteresting asset classes, and
Alec has a really interestingand thriving company that as
soon as we discovered him, wehad to have him on the show.
Alec, welcome to the show andthank you very much for joining
(01:41):
us.
For those folks who haven'tdiscovered Lay or you, why don't
you tell us a little bit aboutwho you are and what you do for
a living?
Speaker 1 (01:46):
Yeah, my name is Alec McElhaney.
I am a FlexSpace developer andI'm doing my first retail and
medical office project as well.
Speaker 2 (01:54):
Okay, cool.
Is that the passion project youtalked about when we were
getting ready to press record?
Speaker 1 (02:00):
No, it's actually a FlexSpace development, but it's
going to be on 35 and I'm goingto build the biggest sign on 35.
So I'm excited about that.
Speaker 2 (02:07):
We'll get into that in a few minutes.
So let's talk about FlexSpaceand why it's an interesting
asset class.
What drew you to get into thatbusiness?
Speaker 1 (02:16):
Yeah, I was doing industrial value add.
Interest rates were coming up.
This was a little bit afterCOVID and it was a little bit
harder to buy an asset andstabilize at a higher value as
cap rates were coming up.
I met Guy at a conference.
He was building what was calledFlexSpace.
I didn't know anything about itand I just looked at the
numbers and I'm like, well, thismakes a lot of sense and the
(02:39):
margins on it are good enoughwhere you don't have to really
worry about higher interestrates Okay.
Speaker 2 (02:44):
All right.
So define flex space for me Arewe talking about, because it's
not quite industrial right andit's not storage right.
So how does flex space fit intothe marketplace?
Flex?
Speaker 1 (02:54):
space is like a hybrid of warehouse and office
space, like light industrialoffice space and just depending
on what the tenant wants we canbuild them out a little bit more
office, but generally we stickto 10% office, 90% warehouse.
Generally flex space havesmaller bays like 2,000 to 4,000
square feet, but we can movebays around or the mizing walls
to have bigger or smallertenants.
Speaker 2 (03:18):
And so with regard to the space itself.
So you know, when I hear officeand garage or warehouse, I
think contractor garages, right.
So is that a classic use case?
Speaker 1 (03:30):
That's great.
Yeah, exactly, that's a greattype of tenant.
So down in New Braunfels iswhere I have one of my projects.
Like when you think of likeflex spaces, metal warehouses,
you think of blue collar, likethey're not businesses that are
making a lot of money.
But one of the tenants down inNew Braunfels he makes all the
bingo chips in America and hemakes millions of dollars each
month and he rents out a smallspace to package his bingo chips
(03:52):
.
Even though they're smallertype of tenants they could be
doing very well.
Plumbers and electricians andHVAC guys are doing pretty well
right now.
Speaker 2 (04:00):
They are yeah, and some of the wealthiest guys,
(04:29):
some of the guys that have thebiggest boats I know are HVAC
electricians and plumbers.
So there's that which comes inhandy because I don't have a
boat.
I have friends with boats, soit's a lot more fun.
Speaker 1 (04:38):
I bring the beer and the food and the building.
I'm going to make you tell meall about the building and then
it's a rental or building as one.
But we do condoize the units.
You can sell at a higher priceper foot.
If you do sell it to a condobuyer, it could be an investor
or it could be somebody with anSBA loan, like a business, who
wants to have their own unit andmaybe the unit next door that
they rent out and further expand.
(04:59):
So it just increases the buyerpool for it.
Speaker 2 (05:03):
And so of the units that you're developing right now
, are there any of them rentals,or are you building them to
make them condos and sell yeah?
Speaker 1 (05:10):
I'll condo-ize it because it's not very expensive
to condo-ize.
But I would love to sell ascondos.
But I'm just performing likeworst case scenario, like we can
only rent it out and we'll justsell the whole thing once it's
all done.
Speaker 2 (05:22):
So what's your hold period on a project like your
typical project?
Speaker 1 (05:26):
So the metal buildings go up pretty quick.
Actually, you can have them goup in about three to four months
and then site works about twoto three months, depending on
how big your site is.
Three to four months and thenSiteWorks about two to three
months to be on a bigger site.
Months you're operating and aslong as you're in a market that
needs a space, you can lease itup pretty quick.
Speaker 2 (05:44):
Yeah, that was one of my other questions.
How do you know if a market isright for this kind of building.
Speaker 1 (05:45):
Yeah, and this is a little trick that I want to give
to investors out there.
I think a lot of people likeyou mentioned multifamily.
A lot of people see what otherdevelopers are doing and hear
about these mindset conferencesand think that's the thing to do
.
You want to do the opposite ofthat.
You want to go straight to thesource and figure out what the
numbers are.
So I'll go to a leasing brokerand figure out what like actual
(06:06):
vacancy is.
So, for example, like a officevacancy in Austin, let's say
it's around 20%.
I probably don't want to bebuilding too much office, but if
it's flex space and it's like2% vacancy, that's a great
vacancy.
That means I can buildsomething and I could probably
lease it up a little bit quicker.
Speaker 2 (06:23):
Yep, and so when you are.
Obviously, adoption and vacancyare huge metrics that are
easily attained through a goodbroker.
In terms of the size, the scope, how many units is it?
Just hey, we're going to put asmany units as that five acres
is going to allow, or is it like?
What is the thought process interms of how you're approaching
(06:46):
these development engagementsfor projects?
Speaker 1 (06:48):
Yeah, that's a great question.
So I think the time to maximizea site, to put as much flex
space on a site, that time haspassed.
A lot of markets I'm sure youcould find markets where that
still works but I see a lot ofthat product that they can see
starting to come up and I see alot of projects going up like
that.
So that's a product I don'twant to get into.
I'm seeing more on a niche typeof flex space.
(07:08):
Let's say I find a five acresite and I can put 70,000 feet
on there.
I'd rather put up 40,000 feetand then have a two, three acre
outside storage lot.
I'll be able to rent it out alot quicker and get higher rents
Okay.
Speaker 2 (07:21):
And so, when you're looking at the additional
130,000 square feet give or takein terms of that five acre lot,
what types of space are yourenting?
Are you talking about RVstorage?
Are you talking about materials?
Speaker 1 (07:37):
It's a great question .
A lot of flex space typetenants actually want a little
bit of yard too.
So that's if you have a guywho's selling bobcats, he wants
a spot to put his bobcatsoutside and he doesn't
necessarily need to pay 15 to 18bucks a foot to leave it inside
.
He'd rather pay $1.50 a footoutside.
So it's people who want outsidestorage and a lot of flex space
(07:58):
tenants like electricalcontractors, maybe even HVAC
guys.
They generally want a littlespot outside the source stuff.
Speaker 2 (08:05):
Yep, okay.
And so when you're looking atland, so obviously land play
being the name of your company.
This is all about identifyingthe right space, right?
What's your process to identifythe right space?
And I'm curious, from a zoningperspective, what types of lots
are you looking for?
Speaker 1 (08:23):
It starts out with what type of product do you want
to build?
So if I want to do a flex andoutdoor storage for example
that's one of the products Ilike I will first look in a
county or city that's reallyeasy to get it approved.
So, for example, out here inAustin there's a city called New
Braunfels.
It takes about a year and ahalf.
Let's say you identified apiece of land and you started
site plans that day.
It'll take you about a year anda half before you can actually
(08:44):
start building it.
And if you go like five milesnorth up to Como County, that
will take around two months toget site plan approved and you
get similar rents.
So it's like why would youbuild a really difficult
municipality when you can buildan easy one?
So first find areas where it'sreally easy to build and then
after that find what the rightzoning is.
(09:06):
A civil engineer can be helpfulfor that, or an architect could
be helpful for that.
A muni code you can look thatup online if you want to do it
yourself.
Speaker 2 (09:14):
And then after that, yeah, those of you out there
having been through this a fewtimes, don't do it yourself.
Speaker 1 (09:20):
Hire a professional and then after that, is your
site specifically good for it?
Are there any d researches?
Are there any masonryrequirements?
Are there any profferedconditions?
There's a lot of things likeand that's one of the biggest
risks I find with the piece ofland are like these little
hidden things that you don'treally know about the land that
might not come up in the titlecommitment.
Speaker 2 (09:42):
Yeah, we're talking deed restrictions is usually a
big one, but are you talkingabout environmentals and things
like that as well?
Speaker 1 (09:48):
Like a phase one.
I've never had an issue withphase one or environmental
issues, but if you're near a gasstation or near what is it?
Laundromat Tiff yeah, you wantto stay away from those.
I did look at a site that Iwasn't interested in once.
That was a garbage disposalsite.
Speaker 2 (10:03):
Come to find out Are you looking for high traffic
areas, low traffic areas, do younot care?
Speaker 1 (10:17):
Yeah, because I want to do like a.
I feel like a lot of the flexspace is starting to get
overbuilt in the low traffic,like out in the industrial park
areas.
I'm targeting areas with veryhigh traffic that should be a
retail site but might not havesewer or might something else
with the land where you can'tput retail on it necessarily.
So it's a great retail site butI can put the flex outdoor
storage products.
Speaker 2 (10:31):
Why wouldn't it be an ideal retail site?
You said something about septic.
Speaker 1 (10:35):
Yeah, the site in New Braunfels or in Como County
that I have.
That site would be perfect forretail.
It would get great rent forretail.
But there isn't enough sewerfor the site.
There's a package plant in theback for housing development
that is shared for the entirearea so I can tap into that, but
I only get like a certainamount of sewer credits.
So that's not enough to do area.
So I can tap into that, but Ionly get like a certain amount
of sewer credits, yeah, sothat's not enough to do retail,
(10:57):
which is a little bit more sewerheavy.
So I'd have to do a flexproject.
Speaker 2 (11:02):
All right.
And so when you're looking atretail, for instance, you're
talking potentially like arestaurant or something like I
use, Like a strip mall orsomething.
All right.
And so when you are, you find alot, you get the approvals.
Are you having an architectdesign each and every one of
plan?
It is really helpful if youstick to one size building and
(11:23):
just cookie cutter it that doessave a lot of money and your
architect will love you for thatBrain damage, it becomes okay.
(11:45):
And the metal building companythat you work with local, or are
they somebody that you'vesourced and are national,
international?
You flying this stuff in orboating this stuff in from China
?
Speaker 1 (11:56):
Yeah, no.
So I would say away from theChinese metal buildings.
And you can find them prettycheap and I don't know how
terrible to back that now, butyou can't find them cheap out
there.
But let's say it's missing apart or a part breaks upon
delivery.
Yeah, you can take for them tosend that back over.
And what back and forth process?
Is a factory like reputableFind these or will they give it
(12:20):
to you free?
So I wouldn't get your metalbuilding from there?
There's so many things wrong.
I can go with the metalbuilding.
I'd get that from americancompany corn.
So it's a pretty well reputablecompany and I have a guy.
He's a subsidiary of cornstoneand if you order in bulk he can
generally get good prices onmetal buildings.
Okay and just.
Speaker 2 (12:37):
And just out of curiosity and give me a range.
I'm not asking for the missilesecrets.
What's it cost to buildseparate from land?
Just the actual construction?
What's a per square foot number?
That is?
Speaker 1 (12:48):
If you talk to a GC, they'll tell you 120 a foot.
If you build it yourself orhave a really good GC that does
flex space, you can build it forcheaper.
Speaker 2 (12:57):
Actually, let's talk about rent first and then we can
talk about selling.
So in the markets you're in,what are you able to rent per
foot?
Speaker 1 (13:05):
It depends on where.
If you're in downtown Austin,you might be able to get north
of 25 bucks a foot and if you'reout in so the county I'm in
Como County I would say flexrents are around 14 bucks a foot
.
If you're not on 35, it's notas big as 95, but it has about
half as many cars going up anddown it does 95.
(13:26):
Up to Connecticut it does.
Yep, okay, yeah, crazy.
But in Florida, yeah, but yeah,there's around a hundred
thousand, 150,000 cars going byevery day.
I can get up closer to 19,maybe 20 bucks a foot for the
front buildings and the ones alittle bit behind it.
I'll probably get closer to 17bucks a foot.
Speaker 2 (13:46):
That's really good.
And then when you go to sell,obviously you're selling the
whole building right.
So what's that look like interms?
Of what are you getting perfoot or is it per unit?
Speaker 1 (14:01):
I don't even know how they're priced, to be honest,
yeah, and cause I have a littlebit of outside storage, it'll
increase the price per buildingfootprint but I'll
conservatively perform a 250 afoot for the flex space or for
the stuff I'm selling, I thinkit'll be probably closer to 270
a foot.
Speaker 2 (14:13):
Now I know why your investors are so happy.
Yeah, interesting, yeah,interesting.
Okay, I'm curious about thebuildings themselves, in terms
of maintenance and all that.
You're only owning it for twoyears, probably not a lot
breaking, and also there's not alot of moving parts.
We're talking about maybe abathroom, maybe a kitchenette,
and a warehouse.
Speaker 1 (14:35):
Yeah, it's so much easier to build than a house.
A metal building is like apre-assembled lego set, like
when you get the package there'sdirections how to put it up
kind of like a lego set and it'snot very hard to put up.
Speaker 2 (14:45):
honestly, you can find a metal erection crew
pretty easily do you everthought about doing it, bringing
that in-house or is it justeasier to outsource it to
another company?
Speaker 1 (14:54):
I feel like it's I could probably do it in-house,
but I don't think I'm doing likeI would need projects going
like all the time and maybe if Istarted a company where I was
GCing for other people then Iwould probably think about that.
But I feel you can find a lotof subs.
You do it for a great price,even a lot cheaper than what GCs
will quote you.
Speaker 2 (15:13):
All right, hey, so we're about 20 minutes into the
conversation.
Why don't we move on to thelightning round and then the
final five and then we'll landthis plane?
All right, Cool.
So I'm always interested in.
Obviously you're doing verywell.
I would assume the bills arebeing paid and the mortgage is
taken care of.
If you have kids, the collegeis probably well on its way to
being taken care of, Cars arepaid off all the good stuff.
Speaker 1 (15:43):
And yet you still get up and go to work on Monday
morning.
So what gets you out of bed?
What is that thing that drivesyou?
I met a couple mentors rightout of college who had
phenomenal companies.
They were making a ton of moneyand they were so young.
They're younger guys in theirearly 30s.
It was just so inspiring to seethat people do that.
There's a quote.
I really you're the uncontestedauthor of your life.
I really feel that if I writesomething down, if I say it
enough, if I start moving inthat direction, I can make
anything happen, and I wantother people to feel that.
(16:03):
I want other people to feellike anything's possible,
because it is yeah.
Speaker 2 (16:12):
Because it is In order to get where you want to
go, you need help, right?
This is a team sport, and soI'm curious about the mentors in
your life over the years, and,specifically, I'm curious about
the best advice you ever got andwho gave it to you.
Speaker 1 (16:25):
That's a great question.
The best advice I ever got wasbigger is not harder, it's just
bigger.
I don't remember who gave thatto me Right when I heard that
I'm like that is so true Doingright.
When I heard that I'm like thatis so true doing a 10,000
square foot flex spacedevelopment, I'm probably doing
250,000 this year.
It's probably gonna be easierfor me to do 250,000 than that
10,000 the first time, like 20square feet yeah, square feet.
(16:48):
So it's not harder, it's justbigger.
That's all it is, that's also.
I heard that entrepreneurs arereally good at tricking
themselves, that things are easyand then they jump in and just
figure it out.
So it's a great.
Speaker 2 (17:02):
Really Okay.
When you've burned the boatsand the water is right at your
eyeballs, you tend to figure itout Exactly All right, and so I
also think that thank God formentors, but also thank God for
mistakes.
Fundamentally believe we learnmore from our mistakes than from
our successes, and so I'mcurious about a decision you'd
love to have back over the years.
(17:24):
What was it and how did youthink it through and how'd you
recover if you were able to?
Speaker 1 (17:28):
Yeah, I'll go with this one.
The first investment property Ibought, I think I was 23 or
right out of college.
I bought a duplex right whenCOVID happened.
I overpaid it for it.
I paid like 5K over what Iprobably should have paid for it
.
I mentioned this mistake for tworeasons.
The first reason is you have toreally know what you're doing.
A lot of risk in real estate isnot knowing what you're doing.
(17:51):
If you actually know whatyou're doing, it could be less
risky than a nine to five job.
The second lesson from this isit's okay to make mistakes and
it's going to be fine, andespecially with real estate,
just hold it a little bit longer.
So with this property, I justwanted to get into something.
Like I was just so tired ofsitting in my butt like watching
people be successful on YouTubeand I wasn't I bought it and I
(18:12):
just had to hold it a little bitlonger and after the debt was
being paid down, after priceskept going up, like I still made
a profit when I sold it.
Time does heal, that's for sure.
Yeah, it's good to makemistakes.
Go make mistakes, do it.
Speaker 2 (18:24):
Now it's the.
Somebody once told me you can'tmake an omelet without breaking
eggs.
So yes and sure, you'reconstantly taking in information
in terms of books or podcasts,or however you do that.
So I'm curious what is the waythat you learn, like, how do you
?
What are the tools that youlearn?
Do you read books, do you watchpodcasts?
Do you listen to or watchYouTube, and, specifically, what
(18:46):
authors or creators are youpaying attention to these days?
Speaker 1 (18:48):
Yeah, I just want to encourage a lot of investors and
entrepreneurs who are listeningto this.
I think a lot of us didn't dowell in school because we were
kinesthetic learners.
We learned by doing.
If I don't know how stormwatermanagement works, go talk to a
civil engineer, and that is thebest way to learn.
That's way better thanYouTubing things.
Go in person, go talk with themand take action on it.
That is the best way to learn,in my opinion, and a lot of the
(19:11):
real-time information.
It's going to be a while beforethat's uploaded and made like
very popular information.
Like when was the best time toget a multifamily?
Probably 2015, and it probablywasn't very easy to find on the
internet.
Multifamily was something youget into the way to know.
That was like actually talk tobrokers and see what the demand
(19:31):
was.
Yep, right on For goodresources.
I think I actually really likechat, tpt, cloud, like any of
the AI tools, because it mightnot be accurate information, but
it gets you the context to knowthe right question to ask when
you get to the place to askthose questions.
Speaker 2 (19:46):
Gets you 80 plus percent of the way there.
Speaker 1 (19:48):
right, you still got to dig deep, but what friend do
you know who knows who's 80%right?
That's great, those are greatodds.
Speaker 2 (19:54):
I'm married, so I'm never 80%, but, and that just
means that my wife is very smart.
That's it.
The last thing I'm curiousabout is how you define success
in your own life.
What does that mean to you?
Speaker 1 (20:05):
Yeah, if I think we all had a taste of being really
successful when we were kids,when we woke up very excited
about the day that we couldcreate anything and we could
imagine anything and believeanything was real.
And I believe going back tothat version of yourself who's a
kid, who can believe anythingis possible and actually make it
happen, like that's whatexcites me.
Speaker 2 (20:26):
I love that.
All right, my friend.
I've really enjoyed thisconversation.
Congratulations on one hell ofa business that you've built.
When you're not talking aboutFlexSpace or anything real
estate related, what do you liketo do for fun?
Speaker 1 (20:37):
I don't really have a lot of fun outside of.
I work out a lot.
I'm getting into eating healthyyeah, working out, but I like
what I do and I also love vision.
I love mindset, I loveimagining the future, I love
learning about new businesses.
That's what really excites meAwesome.
Speaker 2 (20:53):
So if people want to learn more about you or one of
your projects, what's the bestway to get in touch with you?
Speaker 1 (21:04):
Yeah, lamplaycom, and it's landplaycom.
Or on LinkedIn.
If you Google Alec McElhinneyor Lamplay, just shoot me a
message.
Speaker 2 (21:08):
Would love to connect with you, great Alec,
mcelhinney or LandPlay, justshoot me a message.
Would love to connect with you,great Alec.
Once again, congratulations onan awesome business.
Thank you for letting me pepperyou with all those geeky
questions and look forward toseeing your business continue to
explode.
Congrats, thank you.
This has been the Real EstateUnderground.
Don't forget to rate, reviewand subscribe.
It helps us grow.
Until next time, undergrounders, remember your real estate
(21:29):
journey begins with a simplestep forward.
Now get to it.
Bye for now.
Like a metal building , is like a pre-assembled Lego
set, like when you get thepackage there's directions how
to put it up, kind of like aLego set, and it's not very hard
to put up.
Honestly, you can find a metalerection crew pretty easily.
Speaker 2 (00:13):
So the big question is this how do real estate
investors who don't have a tonof free time, don't have access
to off-market deals and didn'tstart life on third base, how do
we conservatively grow our realestate business to support our
families, finally leave thecorporate rat race and build a
legacy?
That is the question.
This podcast will give you theanswers.
(00:34):
I'm Ed Matthews and this isReal Estate Underground.
Greetings and salutations, realEstate Undergrounders.
It is Ed Matthews with the RealEstate Underground.
Thank you so much for joining usagain today and making us a
part of your day.
For those of you out there whoare getting value first off,
thank you.
I'm grateful for all thelisteners.
I'm grateful for the emails andtexts and I love the ideas and
(00:58):
the concepts and the otherguests that you are suggesting,
so keep them coming.
Thank you very much for thatthat you are suggesting, so keep
them coming.
Thank you very much for that.
Also, if you are new to theshow and you do get value, I
would be very grateful if youfollow us, because that helps us
grow.
So with that, let's get into theshow.
With me is Alec McElhaney, andhe is the CEO of Landplay, one
of the reasons that I lovehaving guys like Alec on the
(01:20):
show is multifamily.
In a lot of markets it's playedout, at least for a little
while, and so active investorsare dry powder on the sidelines
looking for other reallyinteresting asset classes, and
Alec has a really interestingand thriving company that as
soon as we discovered him, wehad to have him on the show.
Alec, welcome to the show andthank you very much for joining
(01:41):
us.
For those folks who haven'tdiscovered Lay or you, why don't
you tell us a little bit aboutwho you are and what you do for
a living?
Speaker 1 (01:46):
Yeah, my name is Alec McElhaney.
I am a FlexSpace developer andI'm doing my first retail and
medical office project as well.
Speaker 2 (01:54):
Okay, cool.
Is that the passion project youtalked about when we were
getting ready to press record?
Speaker 1 (02:00):
No, it's actually a FlexSpace development, but it's
going to be on 35 and I'm goingto build the biggest sign on 35.
So I'm excited about that.
Speaker 2 (02:07):
We'll get into that in a few minutes.
So let's talk about FlexSpaceand why it's an interesting
asset class.
What drew you to get into thatbusiness?
Speaker 1 (02:16):
Yeah, I was doing industrial value add.
Interest rates were coming up.
This was a little bit afterCOVID and it was a little bit
harder to buy an asset andstabilize at a higher value as
cap rates were coming up.
I met Guy at a conference.
He was building what was calledFlexSpace.
I didn't know anything about itand I just looked at the
numbers and I'm like, well, thismakes a lot of sense and the
(02:39):
margins on it are good enoughwhere you don't have to really
worry about higher interestrates Okay.
Speaker 2 (02:44):
All right.
So define flex space for me Arewe talking about, because it's
not quite industrial right andit's not storage right.
So how does flex space fit intothe marketplace?
Flex?
Speaker 1 (02:54):
space is like a hybrid of warehouse and office
space, like light industrialoffice space and just depending
on what the tenant wants we canbuild them out a little bit more
office, but generally we stickto 10% office, 90% warehouse.
Generally flex space havesmaller bays like 2,000 to 4,000
square feet, but we can movebays around or the mizing walls
to have bigger or smallertenants.
Speaker 2 (03:18):
And so with regard to the space itself.
So you know, when I hear officeand garage or warehouse, I
think contractor garages, right.
So is that a classic use case?
Speaker 1 (03:30):
That's great.
Yeah, exactly, that's a greattype of tenant.
So down in New Braunfels iswhere I have one of my projects.
Like when you think of likeflex spaces, metal warehouses,
you think of blue collar, likethey're not businesses that are
making a lot of money.
But one of the tenants down inNew Braunfels he makes all the
bingo chips in America and hemakes millions of dollars each
month and he rents out a smallspace to package his bingo chips
(03:52):
.
Even though they're smallertype of tenants they could be
doing very well.
Plumbers and electricians andHVAC guys are doing pretty well
right now.
Speaker 2 (04:00):
They are yeah, and some of the wealthiest guys,
(04:29):
some of the guys that have thebiggest boats I know are HVAC
electricians and plumbers.
So there's that which comes inhandy because I don't have a
boat.
I have friends with boats, soit's a lot more fun.
Speaker 1 (04:38):
I bring the beer and the food and the building.
I'm going to make you tell meall about the building and then
it's a rental or building as one.
But we do condoize the units.
You can sell at a higher priceper foot.
If you do sell it to a condobuyer, it could be an investor
or it could be somebody with anSBA loan, like a business, who
wants to have their own unit andmaybe the unit next door that
they rent out and further expand.
(04:59):
So it just increases the buyerpool for it.
Speaker 2 (05:03):
And so of the units that you're developing right now
, are there any of them rentals,or are you building them to
make them condos and sell yeah?
Speaker 1 (05:10):
I'll condo-ize it because it's not very expensive
to condo-ize.
But I would love to sell ascondos.
But I'm just performing likeworst case scenario, like we can
only rent it out and we'll justsell the whole thing once it's
all done.
Speaker 2 (05:22):
So what's your hold period on a project like your
typical project?
Speaker 1 (05:26):
So the metal buildings go up pretty quick.
Actually, you can have them goup in about three to four months
and then site works about twoto three months, depending on
how big your site is.
Three to four months and thenSiteWorks about two to three
months to be on a bigger site.
Months you're operating and aslong as you're in a market that
needs a space, you can lease itup pretty quick.
Speaker 2 (05:44):
Yeah, that was one of my other questions.
How do you know if a market isright for this kind of building.
Speaker 1 (05:45):
Yeah, and this is a little trick that I want to give
to investors out there.
I think a lot of people likeyou mentioned multifamily.
A lot of people see what otherdevelopers are doing and hear
about these mindset conferencesand think that's the thing to do
.
You want to do the opposite ofthat.
You want to go straight to thesource and figure out what the
numbers are.
So I'll go to a leasing brokerand figure out what like actual
(06:06):
vacancy is.
So, for example, like a officevacancy in Austin, let's say
it's around 20%.
I probably don't want to bebuilding too much office, but if
it's flex space and it's like2% vacancy, that's a great
vacancy.
That means I can buildsomething and I could probably
lease it up a little bit quicker.
Speaker 2 (06:23):
Yep, and so when you are.
Obviously, adoption and vacancyare huge metrics that are
easily attained through a goodbroker.
In terms of the size, the scope, how many units is it?
Just hey, we're going to put asmany units as that five acres
is going to allow, or is it like?
What is the thought process interms of how you're approaching
(06:46):
these development engagementsfor projects?
Speaker 1 (06:48):
Yeah, that's a great question.
So I think the time to maximizea site, to put as much flex
space on a site, that time haspassed.
A lot of markets I'm sure youcould find markets where that
still works but I see a lot ofthat product that they can see
starting to come up and I see alot of projects going up like
that.
So that's a product I don'twant to get into.
I'm seeing more on a niche typeof flex space.
(07:08):
Let's say I find a five acresite and I can put 70,000 feet
on there.
I'd rather put up 40,000 feetand then have a two, three acre
outside storage lot.
I'll be able to rent it out alot quicker and get higher rents
Okay.
Speaker 2 (07:21):
And so, when you're looking at the additional
130,000 square feet give or takein terms of that five acre lot,
what types of space are yourenting?
Are you talking about RVstorage?
Are you talking about materials?
Speaker 1 (07:37):
It's a great question .
A lot of flex space typetenants actually want a little
bit of yard too.
So that's if you have a guywho's selling bobcats, he wants
a spot to put his bobcatsoutside and he doesn't
necessarily need to pay 15 to 18bucks a foot to leave it inside
.
He'd rather pay $1.50 a footoutside.
So it's people who want outsidestorage and a lot of flex space
(07:58):
tenants like electricalcontractors, maybe even HVAC
guys.
They generally want a littlespot outside the source stuff.
Speaker 2 (08:05):
Yep, okay.
And so when you're looking atland, so obviously land play
being the name of your company.
This is all about identifyingthe right space, right?
What's your process to identifythe right space?
And I'm curious, from a zoningperspective, what types of lots
are you looking for?
Speaker 1 (08:23):
It starts out with what type of product do you want
to build?
So if I want to do a flex andoutdoor storage for example
that's one of the products Ilike I will first look in a
county or city that's reallyeasy to get it approved.
So, for example, out here inAustin there's a city called New
Braunfels.
It takes about a year and ahalf.
Let's say you identified apiece of land and you started
site plans that day.
It'll take you about a year anda half before you can actually
(08:44):
start building it.
And if you go like five milesnorth up to Como County, that
will take around two months toget site plan approved and you
get similar rents.
So it's like why would youbuild a really difficult
municipality when you can buildan easy one?
So first find areas where it'sreally easy to build and then
after that find what the rightzoning is.
(09:06):
A civil engineer can be helpfulfor that, or an architect could
be helpful for that.
A muni code you can look thatup online if you want to do it
yourself.
Speaker 2 (09:14):
And then after that, yeah, those of you out there
having been through this a fewtimes, don't do it yourself.
Speaker 1 (09:20):
Hire a professional and then after that, is your
site specifically good for it?
Are there any d researches?
Are there any masonryrequirements?
Are there any profferedconditions?
There's a lot of things likeand that's one of the biggest
risks I find with the piece ofland are like these little
hidden things that you don'treally know about the land that
might not come up in the titlecommitment.
Speaker 2 (09:42):
Yeah, we're talking deed restrictions is usually a
big one, but are you talkingabout environmentals and things
like that as well?
Speaker 1 (09:48):
Like a phase one.
I've never had an issue withphase one or environmental
issues, but if you're near a gasstation or near what is it?
Laundromat Tiff yeah, you wantto stay away from those.
I did look at a site that Iwasn't interested in once.
That was a garbage disposalsite.
Speaker 2 (10:03):
Come to find out Are you looking for high traffic
areas, low traffic areas, do younot care?
Speaker 1 (10:17):
Yeah, because I want to do like a.
I feel like a lot of the flexspace is starting to get
overbuilt in the low traffic,like out in the industrial park
areas.
I'm targeting areas with veryhigh traffic that should be a
retail site but might not havesewer or might something else
with the land where you can'tput retail on it necessarily.
So it's a great retail site butI can put the flex outdoor
storage products.
Speaker 2 (10:31):
Why wouldn't it be an ideal retail site?
You said something about septic.
Speaker 1 (10:35):
Yeah, the site in New Braunfels or in Como County
that I have.
That site would be perfect forretail.
It would get great rent forretail.
But there isn't enough sewerfor the site.
There's a package plant in theback for housing development
that is shared for the entirearea so I can tap into that, but
I only get like a certainamount of sewer credits.
So that's not enough to do area.
So I can tap into that, but Ionly get like a certain amount
of sewer credits, yeah, sothat's not enough to do retail,
(10:57):
which is a little bit more sewerheavy.
So I'd have to do a flexproject.
Speaker 2 (11:02):
All right.
And so when you're looking atretail, for instance, you're
talking potentially like arestaurant or something like I
use, Like a strip mall orsomething.
All right.
And so when you are, you find alot, you get the approvals.
Are you having an architectdesign each and every one of
plan?
It is really helpful if youstick to one size building and
(11:23):
just cookie cutter it that doessave a lot of money and your
architect will love you for thatBrain damage, it becomes okay.
(11:45):
And the metal building companythat you work with local, or are
they somebody that you'vesourced and are national,
international?
You flying this stuff in orboating this stuff in from China
?
Speaker 1 (11:56):
Yeah, no.
So I would say away from theChinese metal buildings.
And you can find them prettycheap and I don't know how
terrible to back that now, butyou can't find them cheap out
there.
But let's say it's missing apart or a part breaks upon
delivery.
Yeah, you can take for them tosend that back over.
And what back and forth process?
Is a factory like reputableFind these or will they give it
(12:20):
to you free?
So I wouldn't get your metalbuilding from there?
There's so many things wrong.
I can go with the metalbuilding.
I'd get that from americancompany corn.
So it's a pretty well reputablecompany and I have a guy.
He's a subsidiary of cornstoneand if you order in bulk he can
generally get good prices onmetal buildings.
Okay and just.
Speaker 2 (12:37):
And just out of curiosity and give me a range.
I'm not asking for the missilesecrets.
What's it cost to buildseparate from land?
Just the actual construction?
What's a per square foot number?
That is?
Speaker 1 (12:48):
If you talk to a GC, they'll tell you 120 a foot.
If you build it yourself orhave a really good GC that does
flex space, you can build it forcheaper.
Speaker 2 (12:57):
Actually, let's talk about rent first and then we can
talk about selling.
So in the markets you're in,what are you able to rent per
foot?
Speaker 1 (13:05):
It depends on where.
If you're in downtown Austin,you might be able to get north
of 25 bucks a foot and if you'reout in so the county I'm in
Como County I would say flexrents are around 14 bucks a foot
.
If you're not on 35, it's notas big as 95, but it has about
half as many cars going up anddown it does 95.
(13:26):
Up to Connecticut it does.
Yep, okay, yeah, crazy.
But in Florida, yeah, but yeah,there's around a hundred
thousand, 150,000 cars going byevery day.
I can get up closer to 19,maybe 20 bucks a foot for the
front buildings and the ones alittle bit behind it.
I'll probably get closer to 17bucks a foot.
Speaker 2 (13:46):
That's really good.
And then when you go to sell,obviously you're selling the
whole building right.
So what's that look like interms?
Of what are you getting perfoot or is it per unit?
Speaker 1 (14:01):
I don't even know how they're priced, to be honest,
yeah, and cause I have a littlebit of outside storage, it'll
increase the price per buildingfootprint but I'll
conservatively perform a 250 afoot for the flex space or for
the stuff I'm selling, I thinkit'll be probably closer to 270
a foot.
Speaker 2 (14:13):
Now I know why your investors are so happy.
Yeah, interesting, yeah,interesting.
Okay, I'm curious about thebuildings themselves, in terms
of maintenance and all that.
You're only owning it for twoyears, probably not a lot
breaking, and also there's not alot of moving parts.
We're talking about maybe abathroom, maybe a kitchenette,
and a warehouse.
Speaker 1 (14:35):
Yeah, it's so much easier to build than a house.
A metal building is like apre-assembled lego set, like
when you get the package there'sdirections how to put it up
kind of like a lego set and it'snot very hard to put up.
Speaker 2 (14:45):
honestly, you can find a metal erection crew
pretty easily do you everthought about doing it, bringing
that in-house or is it justeasier to outsource it to
another company?
Speaker 1 (14:54):
I feel like it's I could probably do it in-house,
but I don't think I'm doing likeI would need projects going
like all the time and maybe if Istarted a company where I was
GCing for other people then Iwould probably think about that.
But I feel you can find a lotof subs.
You do it for a great price,even a lot cheaper than what GCs
will quote you.
Speaker 2 (15:13):
All right, hey, so we're about 20 minutes into the
conversation.
Why don't we move on to thelightning round and then the
final five and then we'll landthis plane?
All right, Cool.
So I'm always interested in.
Obviously you're doing verywell.
I would assume the bills arebeing paid and the mortgage is
taken care of.
If you have kids, the collegeis probably well on its way to
being taken care of, Cars arepaid off all the good stuff.
Speaker 1 (15:43):
And yet you still get up and go to work on Monday
morning.
So what gets you out of bed?
What is that thing that drivesyou?
I met a couple mentors rightout of college who had
phenomenal companies.
They were making a ton of moneyand they were so young.
They're younger guys in theirearly 30s.
It was just so inspiring to seethat people do that.
There's a quote.
I really you're the uncontestedauthor of your life.
I really feel that if I writesomething down, if I say it
enough, if I start moving inthat direction, I can make
anything happen, and I wantother people to feel that.
(16:03):
I want other people to feellike anything's possible,
because it is yeah.
Speaker 2 (16:12):
Because it is In order to get where you want to
go, you need help, right?
This is a team sport, and soI'm curious about the mentors in
your life over the years, and,specifically, I'm curious about
the best advice you ever got andwho gave it to you.
Speaker 1 (16:25):
That's a great question.
The best advice I ever got wasbigger is not harder, it's just
bigger.
I don't remember who gave thatto me Right when I heard that
I'm like that is so true Doingright.
When I heard that I'm like thatis so true doing a 10,000
square foot flex spacedevelopment, I'm probably doing
250,000 this year.
It's probably gonna be easierfor me to do 250,000 than that
10,000 the first time, like 20square feet yeah, square feet.
(16:48):
So it's not harder, it's justbigger.
That's all it is, that's also.
I heard that entrepreneurs arereally good at tricking
themselves, that things are easyand then they jump in and just
figure it out.
So it's a great.
Speaker 2 (17:02):
Really Okay.
When you've burned the boatsand the water is right at your
eyeballs, you tend to figure itout Exactly All right, and so I
also think that thank God formentors, but also thank God for
mistakes.
Fundamentally believe we learnmore from our mistakes than from
our successes, and so I'mcurious about a decision you'd
love to have back over the years.
(17:24):
What was it and how did youthink it through and how'd you
recover if you were able to?
Speaker 1 (17:28):
Yeah, I'll go with this one.
The first investment property Ibought, I think I was 23 or
right out of college.
I bought a duplex right whenCOVID happened.
I overpaid it for it.
I paid like 5K over what Iprobably should have paid for it
.
I mentioned this mistake for tworeasons.
The first reason is you have toreally know what you're doing.
A lot of risk in real estate isnot knowing what you're doing.
(17:51):
If you actually know whatyou're doing, it could be less
risky than a nine to five job.
The second lesson from this isit's okay to make mistakes and
it's going to be fine, andespecially with real estate,
just hold it a little bit longer.
So with this property, I justwanted to get into something.
Like I was just so tired ofsitting in my butt like watching
people be successful on YouTubeand I wasn't I bought it and I
(18:12):
just had to hold it a little bitlonger and after the debt was
being paid down, after priceskept going up, like I still made
a profit when I sold it.
Time does heal, that's for sure.
Yeah, it's good to makemistakes.
Go make mistakes, do it.
Speaker 2 (18:24):
Now it's the.
Somebody once told me you can'tmake an omelet without breaking
eggs.
So yes and sure, you'reconstantly taking in information
in terms of books or podcasts,or however you do that.
So I'm curious what is the waythat you learn, like, how do you
?
What are the tools that youlearn?
Do you read books, do you watchpodcasts?
Do you listen to or watchYouTube, and, specifically, what
(18:46):
authors or creators are youpaying attention to these days?
Speaker 1 (18:48):
Yeah, I just want to encourage a lot of investors and
entrepreneurs who are listeningto this.
I think a lot of us didn't dowell in school because we were
kinesthetic learners.
We learned by doing.
If I don't know how stormwatermanagement works, go talk to a
civil engineer, and that is thebest way to learn.
That's way better thanYouTubing things.
Go in person, go talk with themand take action on it.
That is the best way to learn,in my opinion, and a lot of the
(19:11):
real-time information.
It's going to be a while beforethat's uploaded and made like
very popular information.
Like when was the best time toget a multifamily?
Probably 2015, and it probablywasn't very easy to find on the
internet.
Multifamily was something youget into the way to know.
That was like actually talk tobrokers and see what the demand
(19:31):
was.
Yep, right on For goodresources.
I think I actually really likechat, tpt, cloud, like any of
the AI tools, because it mightnot be accurate information, but
it gets you the context to knowthe right question to ask when
you get to the place to askthose questions.
Speaker 2 (19:46):
Gets you 80 plus percent of the way there.
Speaker 1 (19:48):
right, you still got to dig deep, but what friend do
you know who knows who's 80%right?
That's great, those are greatodds.
Speaker 2 (19:54):
I'm married, so I'm never 80%, but, and that just
means that my wife is very smart.
That's it.
The last thing I'm curiousabout is how you define success
in your own life.
What does that mean to you?
Speaker 1 (20:05):
Yeah, if I think we all had a taste of being really
successful when we were kids,when we woke up very excited
about the day that we couldcreate anything and we could
imagine anything and believeanything was real.
And I believe going back tothat version of yourself who's a
kid, who can believe anythingis possible and actually make it
happen, like that's whatexcites me.
Speaker 2 (20:26):
I love that.
All right, my friend.
I've really enjoyed thisconversation.
Congratulations on one hell ofa business that you've built.
When you're not talking aboutFlexSpace or anything real
estate related, what do you liketo do for fun?
Speaker 1 (20:37):
I don't really have a lot of fun outside of.
I work out a lot.
I'm getting into eating healthyyeah, working out, but I like
what I do and I also love vision.
I love mindset, I loveimagining the future, I love
learning about new businesses.
That's what really excites meAwesome.
Speaker 2 (20:53):
So if people want to learn more about you or one of
your projects, what's the bestway to get in touch with you?
Speaker 1 (21:04):
Yeah, lamplaycom, and it's landplaycom.
Or on LinkedIn.
If you Google Alec McElhinneyor Lamplay, just shoot me a
message.
Speaker 2 (21:08):
Would love to connect with you, great Alec,
mcelhinney or LandPlay, justshoot me a message.
Would love to connect with you,great Alec.
Once again, congratulations onan awesome business.
Thank you for letting me pepperyou with all those geeky
questions and look forward toseeing your business continue to
explode.
Congrats, thank you.
This has been the Real EstateUnderground.
Don't forget to rate, reviewand subscribe.
It helps us grow.
Until next time, undergrounders, remember your real estate
(21:29):
journey begins with a simplestep forward.
Now get to it.
Bye for now.
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