Orthodontists: Avoid These Easy Real Estate Mistakes

[00:00:00] Welcome. You're listening to the GrowOrtho Podcast presented by HIP. This podcast is dedicated to orthodontists who want to stand strong in their market and be leaders in their community. Now, on to today's show. We've got two awesome guys with us here today.

[00:00:19] We're going to be talking about commercial real estate, whether you're a first-time practice owner, whether you're looking to expand, whether we're talking about real estate ownership, leases. There is going to be a ton of topics and value that we're going to dive into today.

[00:00:34] I had a dentist and his wife call me. My wife and I have been talking to an agent that's doing a shopping center development, and I think we're to the end of the negotiation. We're about to move to legal, but can you look over my shoulder?

[00:00:47] And so he sent me the LOI and all the details, and I looked over it, and it wasn't enough. I went back and negotiated $100,000 more of concessions for him. $100,000. Why don't we kind of kick things off when you guys kind of introduce yourselves, where you're from,

[00:01:01] the company you're with, why don't you guys kick it off that way, Del? If you want to kick it off since we met you first. Sure. Sure. So, Del McCrany actually live in the Gulf Coast region here in the Panhandle area slash southern Alabama.

[00:01:17] Keith and I work for a national brokerage health care real estate brokerage called CAR. Cool. And we're a tenant buyer brokerage, meaning that we put all our focus on the doctors. We don't list any properties. We devote all of our energy to helping doctors do transactions.

[00:01:36] And so that I'm sure we're going to get into that a lot deeper. Yeah. But yeah, that's the kind of the net effect of how you and I got in a conversation. You and I and Luke got in a conversation about those transactions, what they look like.

[00:01:52] And I'm excited to be here. Thanks for having us. Thanks for coming. I think the biggest challenge we face at CAR is getting the message out there because there's a lot of misconceptions to commercial real estate. And we see a lot of doctors, kind of a funny analogy,

[00:02:10] but we see a lot of doctors go to a gunfight with a knife. It's tough. It makes it tough for us personally because we know what happens in the market when doctors go unrepresented. And so I'm excited to get into some of that detail.

[00:02:22] We're super pumped to have you guys. Yeah. Thank you so much. I'm Keith Page. I live in Birmingham, Alabama. And Dale and I, what he didn't tell you is we worked for a big dental distributor for a long time.

[00:02:33] So that's where we got to know each other before we came to CAR. So spent a lot of time in this industry, ortho, dental, anything related with that side of it. But through that, we were able to see what CAR was able to do

[00:02:46] and how it was able to help our clients. And man, I mean, it's just a great way to work. It's enjoyable. We have a great time doing it. And quite honestly, Dale's a friend. And so I enjoy working with him as well. Yeah.

[00:02:59] It's interesting because for the majority of our time at HIP, like we would get involved with people like after they've already made it through somebody like you. They've had their financing. They've got their space. They're starting on their build out or they just acquired.

[00:03:14] And then we come around. So this was like a whole new, I guess, field for us because we never really got in with people when they were still working with you guys. And then through the mutual connection where I met Dale and then Dale came out here.

[00:03:30] We started learning the ins and the outs a little bit of what it looks like before they reach us. And that's when we were like, gosh, like more people need to hear this.

[00:03:40] We had no idea how fiss finicky of a game that can be and the types of situations people are getting into even without knowing. And it's like the old, you don't know what you don't know. Luke and I are guilty of it.

[00:03:52] And so we're super excited to have you guys here. Yeah, I think too, to add to that, I think that you even pointed out in our earlier conversation that you guys occasionally will hear that you're working with somebody who's struggling with their real estate transaction. Big time.

[00:04:09] And so that is and thank you guys for what you do because I think we're all as all the vendors who are connected this industry were constantly trying to help our doctors learn these specific things that they didn't have any education on.

[00:04:24] And, you know, they need these teams of vendors to come together and help them be successful. And so thank you guys for what you do. I know there's a you guys here all the time that, you know, you see doctors who are like, man, you're changing my practice.

[00:04:38] And so that's a really it's fun to be part of this vendor network. So thank you guys for all you do as well. Yeah, it's cool. We met some local people too. Yeah, we know them all over the country.

[00:04:49] But it's awesome to have you guys kind in our backyard here. Well, the cool thing about cars were based out of Denver, but we have agents in just about every state. We're licensed in every state.

[00:04:57] And so I think there's only two that we currently don't have agents that we're looking for agents for and right now. So we're depending on who hears this across the country. We can help for sure. Awesome.

[00:05:06] To kind of get into the meat and potatoes and add some value to the audience. Like let's kind of start broad and get a little more specific.

[00:05:14] So broadly speaking, chunking up like when you see a doctor that's looking to open their first practice or maybe go open another location, they get into the real estate side of things.

[00:05:24] Like what are the typical main either concerns or pitfalls or things that you see people walking into deals that are unrepresented getting into? I think the first thing they need to realize is that the second largest expense typically is their real estate.

[00:05:42] So our motto is to maximize profitability through real estate. And so when you're looking at paying your overhead and then your real estate, it's a very important part of it. It's not just about a cool space or a great location.

[00:05:53] Typically we're looking at 10 year leases and so that's a lot of money over time. So we're able to essentially what we say, take them to market show them what everybody's paying in the area because one of the pitfalls would be for them just to drive up,

[00:06:07] see if release sign or for sale sign and then just start going to town. Just like he and I wouldn't try to straighten somebody's teeth. It's not what we know how to do. Yeah, one of the biggest pitfalls is just not knowing what you don't know.

[00:06:19] I mean, so we're a completely free service to our clients. We negotiate our fee from the landlord from the owner. Oh wow. So yeah, there's no harm, no foul and quite honestly we're touring all the time.

[00:06:32] So we know of different locations, probably maybe places they don't know about. So there's demographics that play into it all of that. If your guys' fees are negotiated in the deal and it's paid for by the listing person

[00:06:45] and it doesn't cost the doctor or the owner any additional money, why doesn't everybody use a professional like you and try and do it on their own? I don't think they know. Oh. I mean, I don't think doctors know that.

[00:07:00] I think doctors just assume that there's a fee to it. Well, they assume if I do it myself, it's going to be cheaper. Interesting. And the what's interesting about the in most states, the listing agreements are pre-negotiated before the property ever hits the market.

[00:07:16] The landlord decides what the commission is going to be with the listing agent. And so the downside of doing it by yourself and going to market and trying to navigate the landscape yourself is that two things.

[00:07:27] Number one, you're going to reward the guy who's negotiating against you double commission. Oh wow. And if you don't save any money, people in the industry know when you don't know what you're doing. Yeah, they can smell it.

[00:07:42] Yeah, I mean they see it a mile away when you it's interesting what a really detailed full letter of intent will do for an agent because it really speaks to your knowledge. For us, it is not only protecting them. Every landlord wants healthcare. They don't swing through economies.

[00:08:03] They don't the highs and the lows. They're very stable. They're very successful failure rate for startups with I was talking to a banker the other day, their startup failure rate is less than 2% nationally. Wow. Which is almost unheard of in business startups. Seriously.

[00:08:22] So with that there's value in that. And so for us it is how do we put our doctors in the best position to leverage their worth? Right. If they go alone, there's not a better transaction for a landlord than a doctor to go to market alone.

[00:08:37] Because he knows they don't know what they're doing and they're going to get a very average deal.

[00:08:43] And even worse, you know the landlord as the lease is starting to expire, they're not going to come to you 18 months ahead and say hey, you know, you might want to start looking for another space or if you've outgrown this because they want to keep you. Right?

[00:08:55] So they put your back against the wall of bed on the timeline. 30 days they'll come in and go hey, you know, your lease is about to expire. So one of the services that we provide is that we track that so that we can come to you.

[00:09:05] So say it's an orthodontist that started off and he has four chairs, she has four chairs. But you know over that 10 years they grow like they should, you know? And so now they need eight chairs. Yeah.

[00:09:16] But they're stuck in this lease in this space, this 1800 square foot space that worked perfect for them when they were a startup but now they're not a startup.

[00:09:22] So we give them time to buy some dirt so that they can build because as you know construction doesn't happen overnight. Right. So that's another service that we provide, not just for the single orthodontist but you know the groups.

[00:09:35] My wife works for CAR as well and manages the national account. That's huge. So yeah so essentially when we go to work with these clients we'll get all their leases put them into an abstract, you know a two page abstract so that they can understand it.

[00:09:49] And then 18 to 18, 12 months out whatever it is we'll go to and say hey how's your space? You know do you want to stay? Do you need to grow? That's huge. Or do you want to go to market and kind of see what else is out there? Yeah.

[00:10:02] You know so. And that's just part of your guys fee commission that's already pre-negotiated that doesn't cost the doctor extra money and now they have an extra set of eyes looking at their deal 12, 18 months out. Absolutely. It seems like a no brainer. Yeah. Yeah.

[00:10:18] It is if you know what you're doing. Uh huh. Like the transaction, if you know what you're doing because there's a lot of things in there to think about it because we do this every day.

[00:10:27] We not only think about the space, we not only think about the terms. We're thinking about especially for say a startup, we're thinking about the launching pad.

[00:10:36] We're thinking hey the terms have to be right hopefully we can get some concessions here but we're trying to create runway basically. We're basically saying hey when this build out's done we would love to set the doctor up to have two three months of free rent operating expenses.

[00:10:52] Yeah. Because they need to get the plane off the ground. Right. And more runway creates more lift, right? More speed, more lift and that's the thing. So it's little nuances like that. Yeah.

[00:11:04] That allow us to really put our doctors in a great position for a lot of different things but that's just a good example for a first startup. I think that's a good avenue to dive a little bit deeper in.

[00:11:14] That's one of the things I remember from our conversation at lunch the other day was some of these small concessions that I think can actually open enormous doors. I'm thinking of somebody will keep names out of it that I talked to a couple years ago.

[00:11:30] She was opening a startup. We put our contract on hold because the delays and da da da da da but she calls me back, I don't know, six, eight months later and says,

[00:11:41] you know, I'm not going to be able to afford to continue doing this because I've been paying rent for the last, I don't know, four to six months and I'm not even open yet. Right. And you don't know what you don't know.

[00:11:55] I thought that was just how it goes. You sign the lease and you start paying rent and Dell's talking about some of these concessions that can open enormous doors for people. So let's talk about that a little more.

[00:12:07] What are some of those small hinges, whether it be negotiating some free rent to give them a runway or things like that? What are things that can really make this easier and build a bigger runway for people?

[00:12:18] So kind of a longer answer to that when I was selling dental equipment. I had car had first come to the market and the guy kept calling me and I thought, you know, how, you know, this is great. I'm glad he's here but how does that help me?

[00:12:31] I got a doctor that was looking for space, could not find a space, could not find a space and unbeknownst to me he had started working with the car agent that was in my market. And so one day he calls me says, I found it.

[00:12:41] I need you to come up here and do a design and all that but we found the perfect space. Not only did he get me a great space but he negotiated a tenant improvement allowance for me. I thought what is that?

[00:12:52] He said well that's money that the landlord is going to give me towards my construction. Oh wow. The good news for you is I know we have five ops. I'm only outfitting three of them but now I want to buy a fourth one.

[00:13:01] So he outfitted another ops as an equipment guy. I was like this is great. I'm selling more equipment. Yeah. Doctors thrilled because he's getting this construction paid for. So tenant improvement allowance and you might have another one but that's when my eyes were open to what car does.

[00:13:15] And all of a sudden car was involved with every new office that I was doing with my doctors. Yeah. Wow.

[00:13:21] And really enough that tenant improvement contributions from the landlord a lot of times those are calculated into the rent which is not a bad thing because your rent's 100% deductible. Right. Right. Not a percentage of the lease but the entire lease amount is. Right.

[00:13:39] Which is great for tax advantage and most of the time that tenant improvement money is not, there's no interest on it. So there's no interest on it and you're getting the tax break on it.

[00:13:50] I've only had one landlord in years who mentioned charge and some interest on the tenant improvement contribution. I don't know if you've heard that but so that's a great upside for both of us. Yeah. So I mean think about that. You know here I am.

[00:14:07] I'm a year or two, three years out of residency. I've already got debt that I'm paying off from school. I'm ready to go into practice for myself. Cash flows at zero.

[00:14:16] These are massive, massive value adds that I feel like the typical consumer going unrepresented doesn't even know can be negotiated into the deal. And again it's not costing people any additional money to hire somebody like you guys.

[00:14:32] You know and we network with so many accountants, bankers, anybody that's within the industry that we can help and they can help us.

[00:14:39] So you know doing a project in central Alabama with a startup it's healthcare but different industry than ortho but she's buying the building and she's getting her startup loan straight out of school. Which I mean 100% financing. Wow.

[00:14:57] So everybody has different circumstances so I'm not saying that will work for everybody but she was telling me, she's like I didn't even know that was an option. You know, had no idea it was the option.

[00:15:06] You know because she'd been looking at this building for years saying that would be the perfect place for me but it was not a lease that Dr. None had wanted to sell it.

[00:15:14] That's the fun part of our job you know is connecting people with people that can help them. We work with a lot of startups and first time practice owners and a big question as always should I buy the real estate?

[00:15:27] Should I lease? Should I buy dirt and build from the ground up? Should I buy a shell? Should I lease?

[00:15:34] This is not my expertise. Like as a business guy I'm like well I'd always rather own the real estate you know but Dell's also said there's different parameters on how you go about that.

[00:15:44] So if I came to you guys as a first time practice owner and I was like I really want to own the real estate. What are the parameters that you guys are looking for or that you'd be advising me on where you go?

[00:15:55] You know owning the real estate could be a good move but based on X, Y and Z a long term lease may be better. Or vice versa what are those things that you're either trying to figure out from the doctor, advise them on,

[00:16:09] what are kind of those loose parameters of buying versus leasing? Yeah so that's a... That might be a loaded question. No no no it's a great question because we get it all the time.

[00:16:19] I think there's a handful of things to consider there and it's nice to be in the vendor world and have vendor partners who can also put their eyes on the situation.

[00:16:29] Also whether it's a lender or CPA or whoever and talk through these things like what's the best option here? And I think it has a lot to do with what the model that specific question would be like what is the specific model?

[00:16:42] Is this a doctor who wants to put down 12 locations? Is this a doctor who's going to have one location? Is it a true startup? Are there no patients? And what's the net worth of the doctor because that's what the lender is going to look at.

[00:16:59] So I think there's things to consider there but I'll say I was raised to think that leasing was bad. You know we've all heard that right? Like don't ever lease.

[00:17:10] And I think that's a it's funny personally I think you could make that argument but when you start looking at the business model where you're actually generating cash out of those facilities.

[00:17:21] You know you look at private equity they know what they're going to profit out of those locations and they don't want to tie their money up in real estate because they want to put down more locations.

[00:17:31] It's more valuable to them to put down more than to own the real estate.

[00:17:35] Well we also have spreadsheets that we can put in that you know if you're comparing three different spaces that you're leasing that we'll compare and it'll show you exactly what your average monthly rent is, what the TI allowance is, at the end of the day how much you're paying over that 10 years.

[00:17:48] Then we also have a lease first purchase spreadsheet that we can put in and we share this with the doctors and we encourage them to share this with your accountant as well.

[00:17:55] Talk through this because you know there's things that we aren't experts in so it may be better for them to lease. There's options with investors that will build them a building and lease it back to them with the option to buy it down the road.

[00:18:05] So all of those investors that we work with are vetted by car so that they can feel comfortable knowing that the people that we're recommending has done work for car and done a great job. So yeah so there's so many different options I mean there really are.

[00:18:17] But we do, but we do offer the tools. I mean that's a great point because like visually I think it's really helpful not only to see those properties side by side but to be able to compare a purchase to a lease.

[00:18:29] And even if there's multiple properties that are going to be purchased or option to purchase you can see every deal point side by side like apples versus apples.

[00:18:41] You can look at the total cost if it's a lease, you could total cost of the entire project everything from build out to free rent. It gives you all those numbers to look at so that you can actually do a fair comparison.

[00:18:53] And those are all proprietary to car but we, those are great tools. They're amazing tools to help make decisions. We obviously everybody sitting at this table knows options are your best friend. When it's time to make decisions especially big decisions options are always your best friend.

[00:19:12] We like those tools because not only do you have options you have a really fair way to weigh those side by side. Knowledge is power. You know the easier it is to make a decision for sure.

[00:19:23] I've talked to some young owners that you know they've got great vision which is great but I'm curious how feasible you guys think this is for like a first time business owner that doesn't have a huge net worth right off the get go.

[00:19:38] But I've talked to some people that like their vision is they're going to do a startup from the ground up.

[00:19:43] They want to buy dirt. They want to build from the ground up but they want to build a building that they can go then lease out to other tenants.

[00:19:52] Maybe it's an orthodontist who wants to build crowned up then go lease out to a pediatric dentist or an oral surgeon.

[00:19:59] I've talked to some people on the lending side that said like you can do that but like you're need to put down like 20% and like if you're talking about a two to three million dollar build like how many people have that liquid.

[00:20:13] But I think the business concept makes sense but it's like is that really feasible for somebody that doesn't have high net worth right now.

[00:20:23] Is that more feasible for somebody who's already built three practices and has a ton of equity in those businesses and it's easier to get lending on that but like is that something you would advise somebody to do going into their first business.

[00:20:36] Every situation is different. If they're talking about building a Taj Mahal straight out of school with $250,000 worth of debt or whatever it is I'd probably say no.

[00:20:45] And it may be a hard pill to swallow for them but the goal is to build something sustainable and quite honestly the banks are pretty aggressive with healthcare with ortho.

[00:20:55] I mean they want these clients because they're great clients. Favourite as we said earlier is low so you know it's individual basis on where they're at as far as financially and quite honestly a lot of times the banks will dictate that for us.

[00:21:10] Being able to get the financing or not. But we always advise them go to a dental specific, ortho specific accountant that knows that industry, knows that vertical.

[00:21:23] Because there's a lot of nuances in there that they know that they specialize in that just like we specialize in healthcare real estate.

[00:21:30] You had kind of briefed at this a little bit today and then we were talking about it in our lunch meeting and this was very eye-opening to me but you were saying, and I'm paraphrasing so please cut me off before I say it incorrectly but you were talking about how like you guys don't do listings.

[00:21:48] You work solely for the doctor-tenant owner and you were telling me about some situations where a lot of guys that do what you do they're almost sort of in the back pocket of the people listing and they're not necessarily always negotiating the best deal on the tenants behalf because they want to make sure they keep getting the listing business.

[00:22:10] And it's kind of like a who's team are we on but maybe you could expand on that was like really eye-opening to me and it's like okay you know it's not just working with a commercial real estate expert.

[00:22:21] It's working with a commercial real estate expert that's actually on your team not feed on both teams.

[00:22:28] Yeah I think you and I were talking about a study club that I had spoken at and my first trivia question was who the sign out front the listing agent that's on the sign who is he the fiduciary to. That's it. Yeah.

[00:22:46] And the room got quiet and wheels began to turn and I knew what they were thinking because they probably hadn't thought about that much. And so it's interesting that an innocent negotiation start on the first call.

[00:23:00] So when a when a doctor calls the sign the negotiation just started that listing agent's job is to gather as much information as he can to take to the landlord because that's who he's working for. Right.

[00:23:13] Legally in a lot of states a listing agent can transaction broker so he can take his hat off at some point and stand between the two. Okay. And do the transaction but that's a conflict of interest in our book seems that way. Yeah.

[00:23:27] Because realistically I have more longevity in if I'm you will not you because car doesn't do this way but if I was in your shoes.

[00:23:34] I feel like if I was the agent I have more longevity and runway in more business by taking care of the landlord that's going to get me listing after listing after listing after listing then a possible one off deal. Yeah. It's like it's like going to court.

[00:23:52] That's exactly what I was going to say. No, great analogy going to court underrepresented and expecting the the attorney on the other side to represent you right. You have an opportunity to be represented at no cost.

[00:24:04] You know so there's really nothing to lose at that point and then quite honestly if after 30 days they're not happy with what they're doing then nothing ventured nothing gain they can walk away and it'd be fine but it's it's on us to make sure that the client's happy to make sure that we're supplying.

[00:24:20] Then what what they need and help with them. Yeah, so a specific story to that we love stories though. All right. So keep it private though. Okay. 30,000 listeners. Somebody will know him.

[00:24:32] I had a doctor had a dentist and his wife call me and say hey I somebody just told me about you. I didn't even really realize this existed.

[00:24:44] My wife and I have been talking to an agent that's doing a development shopping center development and I think we're to the end of the negotiation.

[00:24:52] We're about to move to legal but can you look over my shoulder and so he sent me the the LOI and all the details and I looked over it and it wasn't enough and so I got him to sign our ETL and I went back and negotiated $100,000 more of concessions for him.

[00:25:09] A hundred grand. A hundred grand was left on the table. Yeah, absolutely. So two things. Number one they knew he didn't know what he was doing. Right? Right or wrong. That's kind of like I said earlier it's going to a gunfight with a knife. Right.

[00:25:24] They know I mean you could be argued whether it's right or wrong but those are the things that drive our passion to do what we do. Because it's a respect thing for me.

[00:25:33] For me it's like all of our doctors are out there with the right hearts doing the right stuff taking care of our communities helping people. There's a lot of value in not only what they do but they themselves have value and that's what landlords want. Right?

[00:25:49] But they love for doctors to come unrepresented because it means more for them and I've heard of a lot of stories that the concessions that were captured in a case like that are a lot more than that. Wow. Where we've had those.

[00:26:02] When you look at a $50 a square foot tenant improvement allowance on 2000 square feet that's $100,000. That the landlord is not going to say hey we're going to throw this in but coming to the table bringing a great client with a 10 year lease a long term lease.

[00:26:17] That's a good deal for them so these doctors have leverage that they don't even realize that they have and we're just trying to help them.

[00:26:23] We're just representing them and showing them hey this is the leverage that you have and like I said versus a vape shop what do you think the landlord is going to take? Nothing against vape shops. Well I'm just saying you know.

[00:26:35] In case there's any vape shop owners watching the episode. You kind of led me into one of my next questions which was you said the negotiations start on the first phone call. So let's say I decided that I'm a doctor.

[00:26:50] I also think I'm a commercial real estate expert. I'm going to go in and I'm represented. I read a commercial real estate for dummies and here I am ready to go unrepresented.

[00:27:00] As we're getting into this deal I feel like they can smell that I have a knife to a gunfight. Can I contract you guys or hire you guys into the deal?

[00:27:09] Or is it like if you don't make the first phone call and say that you're representing me I'm on my own? Certainly helps to be there from the get-go but no it does happen because a lot of times hopefully through this podcast they'll learn about us.

[00:27:24] But they'll have already started it and realized I didn't realize that. Or a residential real estate person that's a friend of theirs they'll help them. They do a great job in their field but I mean commercial and residential are two totally different animals.

[00:27:38] And to be even more specific healthcare is very you know it's a very narrow vertical and it's a great vertical. So it's just a matter of engaging at the front end if you can. But like said we absolutely will look at a deal.

[00:27:53] I talked to him and talked to a guy on the way up here that's already talked to a landlord and kind of gotten a way down the road.

[00:27:59] And I told him I was like look hey I'll take a look at it you know Pro Bono whatever we'll take a look at it.

[00:28:03] And hopefully if he ends up going there in five, seven, ten years when he's ready to go he'll remember me and say hey he helped me and you know we can grow our business that way as well. So it's trickier but I could bring you in.

[00:28:14] Absolutely yeah absolutely. One of the problems with bringing us in late is more than likely you've given a lot of information to the listing agent to the landlord. Played too many cards.

[00:28:25] But here's what's interesting that the deal that I mentioned a minute ago where we recaptured over $100,000 more of concessions. That deal nobody complained about me coming into that deal. The listing agent never said a cross word the landlord there was never. First thing. They knew right? They knew.

[00:28:46] So yeah so I would take somebody at any stage. I would prefer to strategically set that up. Options is typically the way we negotiate. We don't go I mean asking a landlord to give concessions is great but what's his motivation to give him?

[00:29:03] Like cause you're just asking for him and you're great and you're awesome. Like putting options in front of a listing agent to say hey put your best foot forward here. We're negotiating on three options and they're really good options.

[00:29:17] And that just causes them to really work hard and fight hard with as many concessions as we can get. To put the doctor in the best position we can.

[00:29:27] So in terms of like rules of engagement it's not like against the rules if I got part way into a deal and realized I'm stuck to call you guys. I don't advise it. I don't advise it. There's a better way.

[00:29:40] I know residential is different but I learned my lesson on this. I tried to negotiate my own deal on representing got all the way to the end.

[00:29:48] The listing agent thought they were going to double dip and then at the end I went oh forgot to introduce you to my friend Lori. She is representing me. She's doing my paperwork. The listing agent didn't love that one. Yeah, yeah. Right. Oops.

[00:30:06] Don't know what you don't know. And that's why we're trying to get the word out right? Yeah. You know let's start at the beginning and make sure you have a smooth transition and a great experience and you put you in the best position to succeed. Cool. Yeah.

[00:30:22] And we have a very specific strategy so it helps if we can get started at the beginning. Yeah. It's proven true year in, year out for many years now. So you had talked about that example of leaving 100K of concessions on the table.

[00:30:41] What are some other scenarios, situations, examples? Maybe you have a story of a deal that was either really going sideways and obviously we'll keep names out of it but I'm curious if you got any stories. Somebody called you on the, this is just not working.

[00:30:58] You see this thing going sideways. What was going sideways and how were you guys able to remedy that? You guys have any stories or people you can think of? Yeah. I mean 100K, that's a lot of money right? It's a lot of money. Especially.

[00:31:12] A strip center, brand new strip center attached to a Publix. A lot of times that's very attractive to Dennis Northodontis because Publix has their demographic studies and so she was a good bet. Two different clients. One was an orthodontist, one was an optometrist.

[00:31:25] Going into the exact same space. One was represented by somebody else and one was represented by car. The person represented by somebody else. It was a family friend, residential person.

[00:31:34] And so once everything was done and the doctors were in they became friends and so they were talking and so they were kind of sharing some information to the tune of $275,000. The orthodontist represented by car got $275,000 more concessions than the person next door and got a bigger space.

[00:31:54] Holy smokes. And it was just because we knew what we were doing. We knew the space, knew the landlord and were able to bring what we know and leverage our knowledge. Look, we all share our information across the country.

[00:32:10] I mean we have training videos every Monday and podcasts that we listen to and so Dale and I talk all the time. So like this, I love this because I'm learning from you as we're sitting here talking. You're talking, you know.

[00:32:22] So take all that knowledge and then yeah, to answer that question, I mean that's one example of, that's a big chunk over ten years. Their startup settle barely produced $275,000 in their first year. Well this is $275,000 over the term of the ten years. Over the lease.

[00:32:40] Yeah, over the lease but still $275,000 that she didn't have to pay, you know, in the exact same strip center. The exact same next door. Walls touching. Demising wall touching so it's crazy. I love metaphors and analogies.

[00:32:52] It's my favorite way to communicate but I think that your guy's message would really resonate with this. It's like the difference in seeing a specialist versus not the specialist, right?

[00:33:05] Like I'd say like going unrepresented into a deal like this would be like trying to do, you know, mail in DIY Smiled Direct Club Liners. Right. And going represented with especially somebody like Carr is like seeing a board certified orthodontic specialist. Yeah, yeah. Absolutely.

[00:33:27] You could get to the same result but one of them's probably not going to be as high of quality. Yeah. One of them's going to take a heck of a lot longer. Yeah. One of them's going to be a little bit more stressful but you can get there.

[00:33:37] Yeah, absolutely. Just, you know, are you shortcutting the time or putting the stress on your plate? Yeah, and I think the downside to doing transactions is had this doctor not heard about me, he would have signed the lease and been perfectly happy.

[00:33:55] And never known that he left $100,000 on the table. So you don't, that's the downside of commercial real estate in this arena that we're talking about because you don't know when you get a bad deal. Unless you can compare and you can hardly compare those deals.

[00:34:13] It's hard to compare from a space down the street, depending on how old it is versus new construction. They're all, you know, so it's kind of hard to compare those deals. But yeah, it's important, very important to be represented and have a good strategy. Yeah.

[00:34:33] After we had lunch together the other day, Luke and I looked at each other and were like, we need these guys on the podcast. We have so many people that are probably just don't know what they don't know and leaving a lot of money on the table. Absolutely.

[00:34:48] Our CEO started the company because of this very thing. Oh wow. So he worked. Very mission driven. Worked for, yeah, worked for a couple of landlords and went through some transactions with healthcare providers and really saw them in a really bad position.

[00:35:07] And that was the thing that sparked him to open the brokerage and to really go across the country and protect all these healthcare providers whose hearts are in the right place who are taking care of our communities and doing the right stuff.

[00:35:21] Would you say that most commercial real estate brokerages operate more like you guys where you don't play in both scenarios or is that something that people need to look out for that like unfortunately most brokerages are playing on both courts?

[00:35:39] That's something that you need to ask them if you engage them. You know, are you representing just us or you know, because if there's a building that they're listing and they've got a doctor and they're putting in the building that they're listing.

[00:35:49] I mean, so it's something you should ask. But as far as being healthcare specific, we're the largest healthcare specific commercial real estate company in the country. Awesome. Yeah.

[00:35:59] And so and we have a platform like I said, anybody that's listening as far as if they have practices across several states. We have agents in all the states. And so we just signed a huge men's health group over a thousand locations across the country that we're helping.

[00:36:15] You know, so I think one of the interesting things about that is if you can imagine having 3540 locations across the country and you're going out and trying to do these transactions from broker to broker. All their documents look different. All their processes are different.

[00:36:32] They just and you have to kind of try to sort through that which is not easy to do. But when you come to us, we have local agents and brokers in each of those markets who have deep market knowledge and all of our documents are the same.

[00:36:49] Our process is the same. It's very uniform.

[00:36:52] So going out and looking in five markets or 10 markets and having all those documents, it's really easy or much easier to sort through that than to sort through trying to figure out what a spread whether what they're trying to tell you in a spreadsheet because you're looking at five different ones.

[00:37:07] And not all leases are the same. There's a full service lease, triple net lease, modified gross lease. And so we help explain to our clients exactly what that is. And in some states, you know, a full service is more popular summits, you know, modified gross.

[00:37:20] What does that mean? What does that mean to them? What does that mean they'll have to pay on top of that lease rate?

[00:37:24] So we're able to show that all to them, show them exactly what their operating expenses or not exactly what their operating expenses are, but what they have averaged over the past few years so that they'll know they won't go in blind.

[00:37:34] They'll know exactly at the end of the month. And here's what I owe. Here's what I have to pay. So and that's important when you're doing your cash flow. Yeah, amazing. I love it.

[00:37:42] Important to have those circle back to important to have the local reps in those markets. I can't tell you the number of times that I knew of a property that was coming to market that was not to market.

[00:37:58] And you know, you get a little heads up on that and it puts you in a position to get a client in a tight market. You don't get that. There's a lot of good brokerages out there and some that transact all over the country.

[00:38:10] But we believe that it is just really important to be in that market, have deep knowledge. Connections. What's going on. Really what's happening there without having an agent that's local to the market, you're going to miss some of that.

[00:38:25] And especially in really tight markets, that's a really big deal. And we form relationships with the listing agents as well. I mean, you know, their goal is to fill their building for their client and our goal is to put somebody in there.

[00:38:37] And if we put them in there with a longer term lease and successful, then so like to his point, a lot of them will call us and say, hey, this tenant's leaving.

[00:38:46] It's 2,500 square feet to be perfect for a dentist based on what or orthodontist from what you've told me. And so even before it's on the market, we can call if we know somebody that's looking and say, hey, you need to look at this space.

[00:38:57] You know, it's in that demographic in that area that you want to be in. And it's going to be available come August or whatever it is. And so that's a fun part too. So in a lot of times they don't even think they want to move.

[00:39:09] But when you show them options and say, I can have a nicer space closer to my house and pay less had no idea. So that's a fun part of it as well. Kiers, if you guys got any other sprinkles on top or?

[00:39:22] I would just say build a team around you.

[00:39:25] Use you guys, you know, I mean, build a good team around you CPA banker consultant and then a team that you trust, you know, and and then run your business or run you, you know, I mean, that's I've been in small business ownership before and had some success and then

[00:39:45] has some great failure to some real sensitive towards their needs because I've been there done that, you know. So my biggest advice was, you know, seek seek guidance and people that are specialized in that particular area. Yeah. Like he said, build your team.

[00:40:00] Be sure you had trusted advisors because that's really where the strength and power comes from. Yeah, it's hard just to go out to market and try to make something happen.

[00:40:10] Like if you don't, you don't know general contractors and you don't know the right attorneys and you don't, you know, you don't have these vetted teams of people who for instance, you know, I know some general contractors that are that love change orders.

[00:40:26] You know, they love them and they see them as an opportunity and then I know GC's that fight really hard to bring reasonable solutions to issues when they arise and they they'll do a change order if necessary but they try to figure

[00:40:39] other things out. That's one example of... And then built orthodontic offices that's not just, you know, it's not any... Yeah, that are specific. Yeah, there's a lot more to it.

[00:40:49] Yeah, that have that experience and so I think inside of our industry that is there are those people who stay inside of our industry and do these projects and are experienced here and they bring a ton of value to the table. It's huge. Yep.

[00:41:05] Well, I know you guys are kind of local here in the Gulf area but if somebody watching wanted to either connect with you guys or connect with car what's what's the base way to do that? Feel free to call us. Car.us is a is our website.

[00:41:19] Car.us. Car, C-A-R-R, two Rs. And if you go and said find an agent, you can pick the states that you're in and it'll show all the agents and then you can kind of go from there. Feel free to call us. Cool. Email us would certainly...

[00:41:32] I mean we're a car, we're a team so we'd love to point you in the right direction. You know depending on if you're in Louisiana, Florida, Tennessee, Georgia, wherever. Del, what's your best email? So my car email is deldell.mccraney at carcar.us. Cool. And Keith?

[00:41:54] Keith Page, K-E-I-T-H and then a period page P-A-G-E at carcar.us. Awesome. And if somebody wants to reach out directly to us. Oh cool. We'd love to make the introductions with other agents. Sweet.

[00:42:08] That's what we would love is be able to build an audience where it's like oh I heard your podcast and now there's a warm connection and this whole episode, the intention here is really just helping people, saving them time, keeping them protected.

[00:42:22] So I think there's a lot of people that would like that mutual connection of I saw you and... Yeah. And if you have, if you are mid-market or you're a larger organization with multi-sites, feel free to reach out to Keith and I both.

[00:42:42] We have national accounts and his wife actually runs our national accounts platform. Oh perfect. She's the director of national accounts. She's the boss of me all the way around. Awesome. Yeah, both in and out. 27 years, yeah. Awesome. Well it was really awesome having you guys on the show.

[00:43:01] I think it's going to be a really good episode. Yeah, thank you so much. Absolutely. Thank you. Really.

[00:43:07] I mean this is the, like I said, not to sound like a broken record, but this is the hardest thing is getting the message out there because our clients are doing the right stuff and for us to be able to come and be a part of that.

[00:43:18] Not only to protect them in transactions but help them get through projects with vendors that are already vetted. Yeah. Not having to, you know, kind of take a chance on somebody you don't know or somebody you heard was good.

[00:43:32] I mean we see these vendor partners in action weekend and week out. Yeah. So just being able to provide that and be a part of that and thank you guys for the exposure. Yeah, thanks for coming.

[00:43:45] And just know for anybody listening, we met Dell through a mutual friend, mutual client that he's actually done work for. So just know like it's not like we met you guys at a trade show and had a beer and we're like hey let's do this.

[00:44:01] Like we've seen the value being added and the transactions being done. So there is a mutual bridge there. It's not like we just met you off Craigslist one day. Right, awesome. Thanks for listening.

[00:44:13] If you'd like to learn more about HIP or any of the topics in this episode, send an email to hello at hipcreativeinc.com. That's hello at hipcreativeinc.com or jump over to our website at hip.agency.