Keeping It Real on Commercial Real Estate: The Right Answers to all your Real Estate Questions

By Todd T. Nepola

Todd Nepola's highly anticipated book, "Keeping it Real on Commercial Real Estate" will answer all the questions investors need answered. Nepola is a seasoned veteran with over 25 year of experience as an investor, manager and developer. Over the years people have asked Todd questions about getting started in investing, and he realized that, many times, would-be investors ask the wrong questions, and do not focus in on what should be asked. This leads to to them not investing at all. You will find that Nepola's book contains all the questions that should be asked, and then answered! Todd has found that far too many people don't execute their goals of owning investment real estate due because they lack professional guidance. This book seeks to answer all the questions you would need answered for you to make that investment. Not only will you be reading about how and what to buy, you will also be guided through the loan process, expectations of ownership and how to manage the property, tenant issues and how to add value to the property, refinancing tips and should you hold or sell?

This is a book about investing in commercial real estate. It's not flipping or wholesaling homes, it is for the reader who wants to understand all their options, the plusses and minuses of each option and guide you in the next steps to be successful. Todd discusses the options of buying on your own, partnering up with others, syndication, as well as the public markets.
Todd's desire to give back on all he has learned over the years is evident in that the books proceeds will all be donated to charity. The intention is to not only give back to good causes, but also to show the reader that Todd is passionate about helping others get started in this amazing field and start producing cash flow and security for your future. Read the book cover to cover or use it as a guide specific to your areas of interest. Either way, you will find the answers to the most important questions investors need answered!

Todd Nepola is the owner of Current Capital Management based in South Florida with a portfolio of retail and industrial properties throughout the state. With over 25 years in the field and numerous awards received, Todd is an expert who has not only been on the investor side, he also operates numerous properties as a manager.

• Language: English
• Publisher: BookBaby
• Release date: Sep 23, 2022
• ISBN: 9781667869100

Book preview

Title

Keeping It Real on Commercial Real Estate

© 2022 Todd T. Nepola

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

ISBN 978-1-66784-271-4

eISBN 978-1-6678691-0-0

TABLE OF CONTENTS

Why I Wrote This Book And Who Should Read It!

Dedication

Introduction

Chapter 1— Why Should We Invest?

Chapter 2 — What Are Our Investment Options?

Chapter 3 — The Four-Letter Word: Risk

Chapter 4 — The Purchase

Chapter 5 — Buy-Sell Strategies

Chapter 6 — Manage Well and Keep Adding Value

Selected Property Deals With Commentary

Chapter 7— Advice to Buyers

Chapter 8 — Great Partnerships

Chapter 9— Syndications

Chapter 10 — Investor –Sponsor Compensation

Chapter 11— The What, Why and How I do my Deals

Conclusion— Final Thoughts And I Think You’re Ready!

Get In Touch With Todd

Appendix

Glossary Of Terms

WHY I WROTE THIS BOOK AND WHO SHOULD READ IT!

Real estate has been in my blood for generations. I have taken all the lessons I’ve learned and raised the bar. I have gone from a real estate investor to owning and operating one of the best property management and leasing companies in South Florida. I’ve developed and re-developed all types of commercial properties. From small properties to syndicating multi-million dollar deals, I have done it all.

Now its time to give back! Real estate has been very good to me and I have not only done well financially, but also I have enjoyed the ride in a way no book can ever convey. I have been through recessions, housing and mortgage crisis, high interest rates, low interest rates, and even a pandemic. I’m asked all the time about how to get involved in commercial real estate. Is it harder or easier than residential real estate? What I have found is people don’t ask me the questions I want them too. They either don’t know what to ask or don’t know they don’t even know! I wrote this book to give back. I want to answer all the questions I think anyone interested in this field should know.

I decided to give all the profits of this book to charities of my choosing. I will not ever make $1.00 from the sale of this book. It will all be given away. I hope that shows my motivation is to help and teach as many people as I can how to get into this amazing sector. You will find ways to reach me personally throughout the book, so if you have any further questions, I will gladly answer them and make myself available to help you get your deals done. My motivation is also not money, it’s the satisfaction of expanding this sector and getting people to realize how beneficial it could be for them and just how easy it is to start. Success leaves clues, so this book will offer many stories of exactly what I did, the timelines, the hurdles and the outcomes. Follow my lead and pass me by; nothing will make me happier than being a small part of your success!

DEDICATION

Real estate has offered me so much over the past twenty-five years, and there are far too many people who have had an incredible impact on my life and career for me to thank here. Throughout the book I mention how impactful my father’s teachings have been to my success. While writing this book, my father passed away leaving an indescribable loss. I have so many people from my mother to mentors to thank for the person I am today, but this book is for you, dad! Thank you for all the lessons you gave me, the time you spent with me in the field touring properties and thank you for believing in me and giving me the motivation to accomplish my goals. I am just getting started and have so much more to accomplish. I am beyond grateful for having such passion for this industry and all the benefits I have received from it. In this stage of my life, I hope to inspire and teach as many people as I can to love and learn about commercial real estate the same way I do.

INTRODUCTION

I purchased my first property in June of 1998. I was twenty-five years old and working as a stockbroker at the time. The 1990’s were terrific times to be a stockbroker; I was fortunate to be doing very well for myself financially, plus I was really enjoying it! The downside to this career, like most other sales jobs, is the fact that if I were out of work for a day or two on vacation, my income—as it was entirely commission-based—went to zero. That’s right, no sales means no commissions and that means no pay for that day!

From a very early age I was always fascinated by businesses and investments where you could earn money in your sleep. I became obsessed and started reading books and going to seminars, even watching infomercials late at night all so I could learn how this is done. I came across everything from selling pay phones and ATM machines to franchised businesses and even trying to invent something and patent it. None particularly caught my attention, except one— investing in income-producing real estate. In fact, this was something right under my nose—I’d been interested in this business for years as there were three generations of real estate investors in my family. My father, my grandfather and even my great-grandfather all had owned investment properties at some point in their careers. I was determined to learn this industry and become a real estate investor. This certainly was a proven model to provide me consistent with the idea of cash flow even while I was asleep.

When I think back to my very first property purchase, I can recall each detail like it happened yesterday. I was certain this was the right choice for me, but that did not lessen my initial fears. While preparing for my first property closing, the feedback I received from the so called experts was not too reassuring. It was the late 1990’s and real estate was not exactly the hot investment choice it has been lately. The United States was just recovering from the savings and loan crisis of the late 1980’s and people lost fortunes overnight in real estate; many felt it was no longer a good investment. From lawyers, accountants, real estate agents, friends, and family, the advice was mostly the same stick to being a stockbroker and save your money in the bank. I heard too often that I should not invest at this time, and if I did, I could possibly lose everything I invested. The feedback was so negative and frightening from every person I talked to about this property I planned to buy. Thankfully, I followed my gut and not their advice.

I invested every dollar I had to get my first deal closed. The purchase price was $575,000 and although I was able to get a loan (I borrowed 50% of the purchase price – $287,500) to fund the purchase, I needed a lot of cash to close. This was 1998 and banks were not eager to lend on commercial properties. The bank had the same attitude as many others, they saw real estate as very risky and needed substantial down payments for them to make any loan. After the closing I was the very proud owner of a 12,000 square foot multi-tenant commercial warehouse with seven units, four of which had tenants. Now, please keep in mind I bought this property out of foreclosure, the original developer had invested well over a million dollars into the building alone just a few years prior (not even counting the investment in the land) and I paid $575,000; yet I was still being told it was not a good idea. Even the banks would only offer 50% debt on the new purchase price. In addition to all the negativity I heard regarding this deal, I had also drained my savings account of several hundred thousand dollars and now I had a balance of just about $50.00 in my account. Fun fact, today I still have the check register from those days where I went from a few hundred thousand dollars to fifty bucks. Truthfully, I was not all that worried about this as I was twenty-five years old and single with a great job to support myself. As I said, I just knew in my gut that this property was going to turn out well and I would reap many benefits for years to come.

Fast forward six months from the closing and I was able to not only renew leases with the four existing tenants, but also able to find new tenants to fill all the vacant units. I spent nights and weekends with my friends and anyone I could find to help me clean the property. I would go early in the morning to Home Depot and beg people to work for me day to day. Whatever it took, I was going to get it done. I had to bring new life into this property and so I painted and landscaped as much as I could afford. I changed signage and pressure cleaned everything to create a better and more beautiful place for tenants to operate a business. I had no experience in any of these tasks but learned so much from needing to get it done. From picking paint colors, to renting and figuring out how to use very powerful pressure washers and even to what types of plants I could use that could thrive with the irrigation I had. It sounds like a lot, but truthfully once you get going, with people’s help, you learn on the job very quickly. I am not suggesting everything worked out so great as if a professional had done the work, it hadn’t, but it did get done and I made it happen! That’s how we get experience—by doing.

It was December of 1998, just six months from when I bought the property, and I was able to refinance for $600,000. Talk about a great Christmas present! That meant I would not only be getting back all the money I originally invested, (my $287,500 down payment) but I would also have the funds needed for closing costs (more on that later, but think appraisals, surveys, title, and legal work). The appraisal we had to do for the new loan valued the property at $800,000 now that it had been cleaned up and leased to 100% occupancy. On paper, I already had a $200,000+ profit, in only six months! In addition to that, with the new rents coming in, after all expenses were paid, I still had over $5,000 in positive cash flow each month, as well as the fact that I was paying down the principal loan balance with every loan payment. I was hooked! I knew I could make this happen despite all the naysayers and I also knew I could and would do it all over again.

But first, who am I, and why did I ever want to do this?

I was born in Staten Island, New York in the 1972. We were not a rich family, but we weren’t poor either. I loved my upbringing—I could not have asked for more supportive parents. They let me win doing it my way, but more importantly, they also let me lose sometimes, too. I learned the value of a work ethic and loved working from a very early age. Because I grew up in the lifestyles of the rich and famous era, the 1980’s, I wanted it all and was energized by the thought of making money. To their credit, my parents let me act upon my excitement by allowing me to really do any job I wanted. My first job would be selling planting seeds and magazines door to door. In winters I would shovel snow, and, in the fall, I would rake leaves all around my neighborhood. When I say I started young, I was out door to door at four – or five-years old knocking on neighbors’ doors asking them to buy anything I could find for sale in magazines. Back then, all kids’ magazines had businesses for us to try and sell things, and in return we kids got either money or prizes. As I got older, my teen years, I became a telemarketer and every night after school, from 5:00 – 10:00 PM while most of my friends were home watching tv, I was on the phone selling cruise packages to total strangers all over America. I found my absolute favorite job and what probably led to my passion to get rich when I was fifteen years old. We were living in Miami, Florida in a development called Turnberry Isle. Turnberry was the it place at the time. I started a business of washing cars and boats for my neighbors. Not just any cars or boats, I was 15 years old and taking care of Ferraris, Rolls-Royces, and Cigarette race boats. Not only did I get to drive all these amazing machines, but I also got to learn priceless information from their owners. This was when I also learned people really like to tell their stories and offer help to others, especially when the other person was me, a teenager, and their neighbor.

My parents gave me the freedom to work and experience things where most kids would be told NO. My mother was and still is my rock; she is part mom, part therapist, part family peacemaker and 100% amazing. She sacrificed so much for my brother and me to become who we have today. My father always worked very hard and led by example. More importantly, no matter what I did, win, or lose, so long as I was happy, my parents would be (and are) proud. I am blessed to have had parents who encouraged me to accomplish my dreams; I owe all my success to the lessons my parents taught me and the freedom they gave me. This allowed me to experience and appreciate the value of hard work, both from a character-building standpoint, as well as monetarily. It’s because of my parents that today I teach the same values and work ethic to my kids.

What I witnessed growing up:

I remember when I was maybe 9 or 10 years old, my dad lost his job as an engineer from a large supermarket company. It was the early 1980’s and the economy was experiencing what some called the worst recession since World War II. My parents where