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Hi, I'm Barrett

The simple way to make $1.4M in 90 days

Published over 1 year ago • 1 min read

Hey Everybody,

I have great news!
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Industrial real estate deal flow is beginning to pick up. If you want access to my private deals join my list here. I'm so bullish on industrial in New England, this newsletter issue shows why.
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I'm also bullish on cash-flowing SMBs. Entrepreneurs from Harvard, Stanford, Penn, etc. are personally guaranteeing SBA loans to buy and operate companies. My friend Jackson (Stanford MBA) has built a deal flow channel to invest in these searchers. Accredited investors can join his list to see his private deals at SMBackers.
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Okay...so how did we make $1.4M in 90 days? It's simple, not easy.
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​We purchased this building below 100% vacant for $3,025,000.
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We knew it was undervalued because the building could generate over $300,000 per year, roughly a 10% unleveraged yield. The market cap rate is well below 10% (I use 7% for my valuations) so I knew there was significant upside.
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We marketed the property and leased it up with the following rates:
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Church: $33,000 / annually

Unit 1: $130,000 / annually

Unit 2: $127,800 / annually

Office: $21,000 / annually

Total: $311,800
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We can still lease the outdoor storage space for $25,000 per year, but leaving it off provides a good cushion for unexpected expenses and adds a layer of conservatism to the value (plus we haven't leased it yet).

The leases are NNN meaning taxes, insurance, and maintenance are billed back to the tenants so they don't cost us anything. Sometimes I can't believe NNN leases are real -- it's the main reason I love industrial.
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Anyway, with the market cap rate at 7%, the value of the property is:
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$311,800 / 7% = $4,454,300 ​
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Boom. This is why I love commercial real estate. If operated well there isn't a faster way to create value.

Many people believe it's impossible to create so much value in a short period, but it happens every day. You can't make $1.4M in 90 days of trading time for money, but assets aren't valued on time, they're valued on future production.
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Seeing this up close has permanently changed how I view and feel about money.
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Owning assets is the only thing that matters.
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Hi, I'm Barrett

I've bootstrapped multiple seven-figure companies and am sharing hard-earned lessons and insights about entrepreneurship.

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