Perspective
My sabbatical from commercial real estate brokerage for the last 5 weeks has come to an end this week. After 31 years of chasing deals every day, it was great to have a break. I was continuing to work on three leases for the National Association of REALTORS buildings, before my chairmanship of the Real Property Operations Committee came to an end this month.
During this time, I have said no so many great people and opportunities. I wanted to make sure I didn’t jump back into what I have always done. I needed to give myself time to see what my gut told me to do.
My philosophy has always been that commissions on leases and sales were my “bread and butter.” They paid the bills of a growing family, but wealth is created by owning real estate.
I have had time recently to watch more of the financial news shows. It can drive you crazy – the market goes up, then the market goes down. A world event can change the trajectory in a moment. Then the mind wanders to what happens if the market drops 10%, 15%, or 30%? It’s happened before. Could it happen again?
My simple thoughts on the difference between owning and investing in real estate versus owning stocks are that in the morning, you won’t wake up and have your building disappear. If it is gone, you have insurance to replace it. You may have lost a tenant or two, but your investment is still there. Like the stock market, you still need to know what you are doing when you invest in commercial real estate.
There are so many ways to make money by owning real estate: single family homes, apartments, warehouses, land, renting billboards, cellular towers, hotels, nursing homes. The list goes on.
This is not to say that owning real estate is a get rich scheme. It’s a slow and steady path to wealth. Patience is key. Education is incredibly important. As much as I hate the trite phrase, you must remember, “location, location, location.”
I don’t believe you should ever put your eggs all in one basket, but that you should consider the merits of owning real estate as part of your portfolio. I cant drive and go see the shares of stock in a company I own, but I do find it reassuring to go look at a property I own.
I had an amazing opportunity five years ago to start a commercial division for Reece Nichols.
Reece Commercial started with one agent (me), a business card, and a phone. In five years, we grew to be one of the top ten commercial real estate brokerage firms in Kansas City. We won an Ingram’s Magazine award three years in a row for being one of the top three commercial real estate companies in KC. We have grown to 11 full time agents, with a fantastic mix of experience and youth.
I started my 31st year in the commercial real estate industry this year. After much discussion with my wife and family, I decided this week to step away from Reece Commercial. This was truly difficult decision. I have a great team, Reece Nichols has an incredible staff and so many talented agents, but it is time for me to focus on other priorities in the commercial real estate world.
I have decided to restart Sight Commercial Realty (again)! I am not going to be a full service brokerage company. I will mostly concentrate on what I like to do best – investing in real estate. Investing is something I have done for almost my entire career, but haven’t had a chance to do it much the past five years. I have been fortunate that I haven’t lost money doing investing, or lost a property!
With my years of involvement in the real estate industry, I also have some thoughts for technology that might help a CRE agent be more efficient and profitable. That will be something else I’ll be working on.
It’s a strange feeling after working almost every day since I graduated college to come up for air. I won’t have a fixed schedule for Monday, no sales meeting to prepare for, no referrals to follow up on, no manager’s meetings to go to, and no tie to put on. But I’m sure looking forward to it.
As for my new office location, it will the first time I have ever worked from home. My office in Old Leawood is nicer than any office I could find for myself.
Most of us yearn for the opportunity to go back home. Next week I get to do that with Sight Commercial Realty, as well as truly officing at home. Thank you Melynn Sight for letting this happen for us.
I’m not talking about a question on Family Feud, but about the need to get a survey when buying a property. Getting a survey is something that is strongly suggested when you purchase a property. There are many questions people ask regarding surveys. First of all, who pays? If I am representing you as a buyer, I want the seller to pay. If I am representing the seller, guess what? I want the buyer to pay. In reality, sometimes the seller pays and sometimes the buyer pays.
Before a survey is done, the surveying company needs the title policy. Then they go to the property to take some field measurements. They get the boundaries of the property, and the location of where the building is (if there is one) on the property.
The next step is to look at the title policy and find any easements that are affecting the property. Those might include where the utilities are – either utilities the property uses, or utilities that may be underground, just passing through the property.
If asked (which it should be!), they will locate the actual utilities that service the property. They will also check the zoning of the property. Lastly, they will compute the actual square footage of the property as well as the useable square footage.
So let me narrow down what a survey should accomplish for you:
• You will know the actually amount of property that you are buying and how much of that is useable. Sometimes a seller may be selling less ground or more ground than they were marketing. You want to make sure that the 20 acres you have contracted is actually 20 acres! Also, part of the 20 acres might be unusable due to flood plains, or utility pipelines. It’s very important to know these details as well.
• You want to verify, when a seller says that there are “all utilities to the property,” that they’re telling the truth. It’s hard to build anything without water, gas, electric and sewer. Just because the sewer line touches the property doesn’t necessarily mean you can use it to sewer your property. Those are things you will find out in a survey.
When buying a commercial property, don’t “survey” people to ask if you need a survey. It’s something you should always get when buying a commercial property or a tract of ground.
A few weeks ago we discussed the Brookside neighborhood in Kansas City. Just as a reminder, since I got married 31 years ago, my wife and I lived in two different houses in south Leawood. It was a great place to raise kids, with fantastic schools, access to baseball and soccer fields, and a great quality of life. I highly recommend it.That being said, as our kids grew up and moved out of the nest, we decided that maybe we didn’t want to be out south anymore. We knew if we could find the right house, we would move. So indeed, we found a great old home in historic Leawood, one of the first four houses in the City and as far north as you can get. My daughter reminds me while we aren’t in the “city,” it sure feels a lot closer.
As my wife and I continue to re-explore parts of Kansas City, I had another opportunity to celebrate a birthday. We had heard about a Champagne bar that had opened this year in Westport, called Ça Va. So my wife, daughter, and niece headed there to check their beverages out. It was an appropriate time to celebrate with a bottle of champagne! The building has a great historic vibe to it, with an old tin ceiling and woodwork. Sorry, architects and builders, but I have yet to see someone recreate the details that come with an old building.
Next we went to Harry’s to revisit a place we hadn’t been in a long time. Tons of character and characters! We had a great table with a view onto the busy streets on an early Saturday night in Westport. It was great fun.
Finally, for dinner, we went to Port Fonda. This restaurant started out as a food truck, and they were so successful, they were able to open a full-service restaurant. I had amazing food, in a great atmosphere, with (of course) excellent company.
One of my friends on Facebook said “I’m sure this is a different Westport experience than Dan had 30 years ago,” and no doubt she was right! Don’t get me wrong – I love Johnson County. My commercial real estate business has been mostly in JoCo over the years, but as a CRE broker, it’s so exciting for me to see the changes going on in Kansas City.
I think the best is yet to come.