Commercial Real Estate Internship Update #1 – Blake Imperl

Commercial Real Estate Internship Update #1 – Blake Imperl

How My Views on Commercial Real Estate Are Changing

By: Blake Imperl

As I am approaching the end of my first month as an intern at Gabhart Investments, I’d like to reflect on what I’ve learned, and what has changed thus far.

What I’ve Been Doing

Over the past few weeks, I have been spending a lot of time reading the material Curtis has provided me on Property Valuation & Investment Analysis. Although it is mainly an overview of the subject, it has proved to be some highly valuable content. This material essentially picked up where I left off in my Real Estate Investment Analysis class that I took last semester at San Diego State. I have been brushing up on subjects like tax benefits, 1031 exchanges, expenses, leverage, returns, evaluating cash flow, and much more. I still have a great deal of learning to do on these subjects, but it is exciting to see how what I’ve learned in the classroom correlates to real world applications. It is my intention to continue to read up on these subjects and ask as many questions as I can.

I’ve also been observing how Curtis and his team assemble marketing packages for commercial properties they are listing. I was doing things similar to this at my last internship at Realty National, so I’ve enjoyed seeing how this translates in the commercial arena

Commercial Real Estate Blog Posts

Another task I have taken on is the editing of Curtis’s blog posts. My first edit was a post on property walkthroughs. One tremendous benefit of doing this has been the information I’m learning is sticking much deeper than if I just glanced over it. It’s proved to be a great learning tool for me and I’ve even taken on the task of researching some of the topics I was curious about. Writing has always been a passion of mine, so getting the opportunity to revise and write some stuff has been great. I’m excited that I will get to continue to edit blog posts during my time here.

Property Walkthroughs

This past week I had a great learning opportunity with Curtis to do a walkthrough of a 13-unit apartment building in Fallbrook. I was able to learn about some of the things you should be looking for in a property, both on the interior and exterior. This was a neat real life application after reading Curtis’s article on property walkthroughs. This is certainly the kind of stuff you’d never learn in a class room.

13-Unit Apartment Building In Fallbrook

La Jolla Multi-Family Building

Another property we looked at was a 5 unit multi-family building in La Jolla. This was a very intriguing property because it had great bones, was less than a block to the beach and offered several routes for renovation. When walking the property, we looked at things like the condition of the floors, the bathrooms, kitchens, balconies, electrical, etc… It was far from move-in-ready, however, at the right price this could prove to be a great deal.

Curtis and Abe inspecting the condition of the upstairs balcony

the interior of the detached studio

Co-Star Lunch & Learns

In addition to the property walkthrough, I’ve also attended two Co-Star lunch and learns with Curtis and his assistant Dianne. The one that stood out to me was on the housing forecast over the next few years in San Diego County. I enjoyed this meeting because this is a real problem we will be tasked with fixing over the next decade. This past semester in my investment analysis class I did a great deal of research on this subject, so it was neat to hear the industry take on the issue.

Other Opportunities

Lastly, I have very much enjoyed the opportunity to pick Curtis’s brain. He’s always offering me valuable tips and knowledge about real estate and just life in general. Whether it be tips on client relations, listing properties, or even just financial management, I’ve been trying to act like a sponge of knowledge. He’s always honest about things and I respect that.

My views on real estate are growing stronger than ever and I’m excited all the learning opportunities that lie ahead. I am finding that the San Diego Commercial Real Estate Market contains more possibilities than I ever could have expected. Stay posted for my final update in August!

In a bit,

Blake Imperl

Intern, Gabhart Investments

Meet Our New Summer Intern At Gabhart Investments

Meet Our New Summer Intern At Gabhart Investments

 

Blake Imperl – 22 Year Old Aspiring Commercial Real Estate Professional

 

Background

I moved from Milwaukee to Scottsdale, Arizona when I was 5 years old. Spending my formidable years in the desert climate, I always had dreams of moving to the beach. As the son of a former real estate developer, I was exposed to real estate from a young age. My dad specialized in multi-family and student housing developments in and around the Milwaukee area. Upon graduating high school at 18, I moved to San Diego to study marine biology at San Diego State University. I quickly realized I wasn’t cut out for the science world and changed my focus to pre-business. It wasn’t until my sophomore year that I decided I wanted to be a management major with a real estate minor. I accredit this route to the all inspiring business professors I had at SDSU and to my involvement with The Real Estate Society. As a person who thrives on leadership and entrepreneurial opportunities, the knowledge and values I acquired during my time at SDSU will serve me for the rest of my career. Outside of real estate, I am an avid musician who plays in a local indie rock band called Stray Monroe. We’ve had the fortune of playing at some great venues around San Diego including The Casbah and Soda Bar and have also been played on 91X and 94.9FM. I also enjoy traveling, spending time with my girlfriend, and practicing Portuguese.

 

Why did you choose to intern with Gabhart Investments?

I chose to intern with Gabhart investments for several reasons. First, Curtis seems to have an amazing drive and motivation to succeed. From the first time we met, I could sense that he carries himself to a high level of professionalism with an immense entrepreneurial spirit. Though I had been exposed to commercial real estate before meeting with him, I never entertained the idea of making it into a possible career. He definitely opened up my eyes to all the opportunities that could be had in commercial. Second, Curtis is a very generous person who gives back to the real estate community. His involvement with past interns, students, and aspiring professionals, really spoke volumes to me. I sensed that if I gave it my all during this internship that I would get a lot back. Lastly, I really liked the opportunity to learn in a small team environment. I felt that I would get a great deal of hands-on experience and intangible knowledge.

How did you hear about the internship?

I heard about this internship through my former boss, Randy Zimnoch, who is the owner of Realty National. Realty National is an investor-friendly and full-service brokerage based out of Pacific Beach. They’ve developed a stellar team of over 30 agents since their inception in 2011. Randy was crucial in setting me on the career path that I am on now. Without his guidance, I think my focus in real estate would have been entirely different.

Why would you work for free?

Knowledge is invaluable. What I will be learning over the course of this internship far outweighs any minute compensation I could currently earn elsewhere. I realized early on in my college education that you can’t monetize the value of experience, because it’s that very experience which will make you more money down the line. In my initial meeting with Curtis, he asked me about my professional goals. One of the things I told him was that it was a personal goal to be a millionaire by the time I’m 30. He told me through hard work, smart decisions, determination, and a bit of luck that it could be possible. This isn’t to say I anticipate real estate being a get-rich-quick process; I fully understand you need to be in for the long-haul. Judging by how successful he has been thus far, I think it’s safe to say I’m learning from somehow who could teach me some things on how to make that possible.

What are you trying to accomplish?

It is my goal to walk out this internship a much stronger professional that I was before. I will achieve this by applying myself and acting like a sponge of knowledge. I want to understand the commercial arena better and pick up on some things that have made Curtis so successful. I’d like to also understand how I can hit the ground running upon graduation in December of this year. It is my hope that I can add many invaluable tools to my real estate belt that I will be able to utilize for years to come. Lastly, and most importantly, I want to add as much value as I can to Gabhart Investments.

Why is it you are interested in Real Estate?

I touched on this early, but I attribute my interest in real estate to my father and The Real Estate Society at SDSU. From a young age, I remember walking properties with my dad, doing napkin math, and talking real estate. Though I may not have realized it at the time, he was planting the seeds that would eventually grow into a profound interest. Once I got involved with The Real Estate Society in my sophomore year, I began to apply a lot of those concepts my dad and I initially discussed. I went to every guest speaker event, every case study, networked, took notes, and constantly worked on my professional development. I also served as Director of Marketing during my third year and this past year I was Vice President on the executive board. Lastly, I need to thank my many mentors who have helped me along the way; David Smith, Sean Bascom, Kris Kopensky, Mark Goldman, Mike Wolfe, Cody Zindroski, Jessica Barber, and many others. Their support and knowledge have proved to be invaluable.

 

I will be making monthly posts on my progress here at Gabhart Investments, how my views are changing in regards to real estate, and any other new updates. Stay posted!

In a bit,

Blake Imperl

Curtis Gabhart Earns Prestigious CCIM Designation

Curtis Gabhart Earns Prestigious CCIM Designation

ccim-logo-four-colors-414x357

I am happy to share with you that I have been awarded the Certified Commercial Investment Member designation by CCIM Institute. The designation was awarded during a pinning ceremony on April 4 during CCIM Institute’s Midyear Governance Meetings at the Fairmont, in Chicago.

I was among 164 designees honored by CCIM Institute and their local chapter members. The new CCIMs have varying years of experience and work in all aspects of the commercial real estate profession. They hail from 36 states, the District of Columbia, Puerto Rico, as well as five new CCIM designees from Canada and one from Germany.

I started to pursue the CCIM designation program back in year 2005 and now I am one of the Board Members of CCIM San Diego Chapter.

To earn the CCIM designation, commercial real estate professionals must complete more than 160 hours of case-study driven education covering topics such as interest-based negotiation, financial analysis, market analysis, user decision analysis, investment analysis, and ethics in commercial investment real estate. Candidates must also compile a portfolio demonstrating the depth of their commercial real estate experience and pass a comprehensive examination.

Celebrating its 50th anniversary, CCIM Institute is a global community of 13,000 members, more than 50 chapters, and 30 countries that educates and connects the world’s leading experts in investment strategy, financial analysis, and market analysis.

The Designation

The CCIM designation remains the only credential at the leading edge of investment strategy, financial analysis, and market analysis.

CCIM stands for Certified Commercial Investment Member. The CCIM lapel pin denotes that the wearer has completed advanced coursework in financial and market analysis, and demonstrated extensive experience in the commercial real estate industry. CCIM designees are recognized as leading experts in commercial investment real estate.

Investment Expertise

Above all, the CCIM designation represents proven expertise in financial, market, and investment analysis, in addition to negotiation. Courses in these core competencies are taught by industry professionals, ensuring all material reflects the state of the industry. With this real-world education, CCIM designees are able to help their clients:

Minimize risk
Enhance credibility
Make informed decisions
Close more deals

2017 Habits Newsletter

2017 Habits Newsletter

2017 Habits Newsletter

Well, we are 3 months into 2017, and I am very excited! Last year was terrific, but I have bigger goals and new commitments for my life.

 

I would like to divulge some of my habits that I have started to work on this year. Please let me know what you are working on.

 

In 2017, I am devoted to concentrating on shifting the patterns that will have a huge impact on my life. I have decided that it is time for me to make some serious changes, and it all began with me making a serious commitment to excellence. I would like to share my plan with you. This will help me stay motivated and focused. Sharing my plan with you will also give me an opportunity to learn from you. As John Dunn once said, “No man is an island. No one is complete unto himself.”

 

I have always been fascinated with the power of the mind, body, and spirit. I firmly believe that you can do anything in life if your mind, body, and spirit are in harmony. Let’s see how we can support each other while pursuing our goals.

 

Here are a few things that I have set as my goals during this New Year. Please let me know what you are up to. I would love to hear your ideas and learn about your habits.

 

My first step begins with myself. I know that I have to stay mentally and physically healthy if I expect to be a wonderful father. The same can be said if I expect to live up to my full potential. Mental health and physical health build on each other. They have a close relationship that cannot be broken!

 

I will simplify my habits and goals into three primary categories.

 

Here are several habits that I am working on. By the way, what do you do?

 

I don’t mind waking up early in the morning. Getting my day off to a great start will be my main focus.

 

When I wake up (5:00 a.m.), I have my radio programmed to get me going with inspirational speeches on Spotify. I proceed with reading a self-improvement book that will inspire me to become a better person.

 

Have you heard of “Tools of Titans” by Tim Ferriss? What about “Miracle Morning” by Hal Elrod? If you haven’t read them, I encourage you to pick them up today. I am impressed with the layout so much that most of my goals/habits will be simplified into three main categories.

 

Tim takes exceptional interviews from his podcast “The Tim Ferris Show” and puts his best material into small chapters (2-5 pages). Each chapter has highlights from the interview.

 

Here are some of my favorite tactics and people from the book:

 

Former Navy Seal Jocko Wilink – How to bounce back from setbacks and failures in life.

 

Anthony Robbins – How to maximize your mornings.

 

Retired Four Star General Stanly McChrystal – How to increase your mental strength with three practices.

 

The book has three categories that I like and plan on using for my habits.

  1. Healthy

 

  1. Wealthy

 

  1. Wise

 

He has interviewed famous people like Arnold Schwarzenegger, Peter Thiel (billionaire investor), Ric Ruben, and famous motivational speaker Anthony Robbins. They are all world-class superstars in their respective fields.

 

They have accomplished so many things in their lives. In the book, they are asked simple and funny questions. For instance, they were asked, “What was the best $100 you ever spent?”

 

Here are three interesting things that stand out in the book:

 

-The common belief that failure is not durable.

 

-Almost everyone has been able to turn their biggest weakness into their greatest strength.

 

-80% of the people featured in the book meditate.

 

Reading this book has inspired me to form the habit of meditating at least five to ten minutes each day. I can honestly say that meditation has already created a big effect on my life.

 

For example, I don’t have a problem with falling asleep at night. Before, I could never sleep throughout the night. I have had this problem since I was a child. In many cases, my mind would wake me up in the middle of the night. I would play around with fresh ideas in my head. I would lay there and think about finding new real estate deals for my portfolio.

 

I have tried meditating in the past, but I did not have any success. I thought that I would be able to sit still in a quiet room with my eyes closed for five minutes. My patience prevented me from having a short meditation session.

 

Well, I learned something new! I discovered two free apps (limited access for free version), Calm & Headspace. These special apps will guide you through a timed meditation. On Audible, they have “channels” that showcase podcasts. I decided to download several sleep meditations. I must be brutally honest, they have changed my life. After I listen to these guided meditations, I fall asleep like a baby.

 

Calm & Headspace takes me through a meditative session that last for ten minutes. A calm voice gives you thorough instructions. It really feels like I am getting a stimulating mental massage. I believe that meditation is the best way to restart your brain. Restarting your brain will empty the content that is slowing it down.

 

Healthy

 

I decided to record my daily food intake, and set my calorie limit to 1,500 a day. On occasion, I will add extra calories if I exercise. My fitness pal is one great app that helps me keep track of my calories. I just take a picture of the barcode and it does the rest!

If I continue attending my spin classes, I will accomplish a goal that I have had for many years. I really want to start teaching spin to a younger generation. I used to teach spin when I arrived here in San Diego. Unfortunately, my real estate business started to consume most of my day.

 

I feel that I can benefit from being a spin substitute teacher. It will help me stay healthy and accountable.

Fit Bit – This was a gift, and I am so happy that my best friend decided to buy it for me. Fit Bit also tracks my sleep. I discovered that I have been able to get at least seven hours of sleep for the past four weeks. This is incredible!

 

Swim, Spin, Yoga – I choose specific days for these exercises, depending on my mood or how my day is going. For example, I really enjoy swimming in the evening. It helps me relax after a long day at work.

 

Wealthy

 

Zig Ziglar once said, “You can have everything in life you want if you will just help enough people get what they want.” I plan on helping five people a day. I think this strategy will help me reach my goals. In real estate, I have learned that relationships are the keys to success.

 

Saving for Retirement

 

I really regret not listening to my father earlier in my life. He always stressed how important it is to save. I wish I would have stuffed cash into my Roth Ira when I was in a lower-income bracket.

 

I always counted on getting a better return from my real estate investments. Well, this approach backfired on me. I should have listened to Dad!

 

I have divided up the maximum amount that I can deposit into my 401k by 12, and put it into my retirement.

 

I recently bought the app Robinhood. It helps you trade stocks for free. This is great for anyone who is interested in learning the stock game without putting their money at risk.

 

I have noticed that my life improves when I fill my head with quality stuff. Listening and learning while driving is incredible!

 

I now use Acorn to conserve my loose change and use it to fund my traveling. Iended up being able to take my daughters to China for ten days in February. You can do the same if you start saving.

 

Acorn is simple to use. Submit your bank account information (the site is secure), and your transactions will appear on the screen. It will round each figure to the dollar amount and give you the option of investing your change. Acorn is really helping me when it comes to saving for the future.

 

Cooking

Learning how to excel in the kitchen has been a tough struggle. Over time, I have gotten better. I now can cook a decent meal without poisoning someone.

 

I purchased a Traeger BBQ Grill at Costco. I couldn’t resist the temptation to take it home after having a brief conversation with the salesmen. You simply add wood pellets that willburn at your desired temperature. It is so simple and fun to use!

My kids get excited, but also nervous when I get on the grill. Reading 4-hour Chef by Tim Ferris has helped me become a better cook. The 4-hour chef is the book that introduced me to Tim and his unique writing style.

 

This book is designed to instruct you on how you can learn anything with ease. It uses cooking as a method of learning.

 

Wise

 

Reading daily is another habit that I am working on. In February, I read “Tool of Titans”, “The Miracle Morning”, and “The One Thing”. I am fortunate to have my mother as my accountability partner. She has been a big help in 2017. I am learning that commitments require focus, desire, and dedication.

 

Speaking of Wisdom, I have an upcoming class called Evaluating Commercial Properties 101. Feel free to join us and register with the link below!

 

https://www.eventbrite.com/e/evaluating-commercial-properties-101-by-curtis-gabhart-professor-mark-goldman-tickets-32640216767?invite=&err=29&referrer=&discount=&affiliate=&eventpassword=

 

Transitioning to Commercial Real Estate

Transitioning to Commercial Real Estate

Before you finish up your goals for 2017, we want to know if you have thought of doing commercial real estate transactions?

Do you own or have existing clients who own single family homes or condos that are currently rentals in which they have a fair amount of equity?

When doing a portfolio analysis for people in similar situations, many times they would be in a better position to sell the SFR and 1031 exchange into an apartment building. Many times, an owner can buy a market priced multi-family building and better their position. What makes this great is that you can represent them in the sale & purchase transaction (or at least earn a referral fee on the buy side if you don’t do commercial transactions).

Let’s put together some assumptions for a 2 SFR vs. an Apartment Building

2 Single Family Residential Homes
• 2 San Diego single family homes (SFR) purchased for $250,000 each
• Current total value of the 2 SFR is $1,000,000
• Free and clear without financing or debt
• Rented out for $3,000 per month each
• Vacancy rate 3%
• Expenses paid by Owner – Insurance, Property Taxes & Repairs and maintenance
• Appreciation rate 3%
• Increase in rent income – 3% per year
• Increase in expense – 3% per year (Except for Property Taxes which in California only got up 1% per year)
• Sold in Year 10 with 6% Closing Costs

Apartment
• 15-Unit Apartment Building in San Diego Purchased for $2,500,000
• Down payment is $1,000,000 (from equity of the properties they sold)
• Loan is $1,500,000
• Interest Rate is 4.25%, amortized over 30 years
• 10 1 Bed/1 Bath Units rented out for $1,000 per month
• 5 2 Bed/1 Bath Units rented out for $1,300 per month
• Vacancy rate 5%
• Depreciation 27.5 years
• Appreciation Rate 3%
• Increase in rent income – 3% per year
• Increase in expense – 3% per year (Except for Property Taxes)
• Sold in Year 10 with 6% Closing Costs

How much is the difference in their net accumulated proceeds at the end of 10 years?

Do the math, and there’s more. The cash flow before taxes after year 10 for the apartment is more than the SFR and much more after that.

Curtis Gabhart will tell you more about this in the upcoming class that he will be teaching next week “Transitioning to Commercial Real Estate.” This class will help you learn if the highly lucrative, highly competitive business of commercial real estate brokerage is right for you. He will be discussing some ideas how you could incorporate as a residential agent to either replace or supplement your income through commercial real estate transactions.

Sign up for the class here:

Transitioning to Commercial Real Estate
Thursday, January 26, 2017
1:00 PM – 2:30 PM PST
Keller Williams Carmel Valley
12780 High Bluff Dr Suite130, San Diego, CA 92130

Price is $15.Door Price is at $25. Seats are filling up quickly so we highly encourage to RSVP in advance.

Here is one simple idea that can be implemented now, that should generate you from $15,000 to $50,000 with little effort.

Are you wondering why Curtis is sharing this information?

Ok well, let us tell you a secret….. There are no secrets and many of these things you are smart enough to figure out yourself, but if he can help generate ideas we hope at some point, we can do business together and here is what he could do with our team.

He owns several real estate related companies, from a construction company, investment funds and commercial brokerage.

Also as we are all aware, our code of ethics won’t allow a realtor to provide a service outside our field competence without the assistance of one who is competent on such type of property, unless the facts are fully disclosed to the client (Article 11). This should not stop you from earning through commercial real estate transactions as early as now.

If you decide to start your career in commercial real estate, we can do some transactions together. Curtis also does coaching. Or if you don’t want commercial real estate at all, we can start working together through referrals.

Many of you don’t have time or don’t want to spend the ongoing money to do commercial (we spend thousands per month for things like CoStar, Loopnet premium, Reis etc) and realize that a referral may only take a couple hours of your time for thousands of dollars in return which means you make more money per hour. In many cases, we have a much higher probability to successfully doing a deal. In return, Curtis will be sending you residential referrals. He has a team and our job is to make you look good to any referrals you send us and to keep you on the top of mind when the client has residential needs. When working with us, we also consider you as the client and we do not only promise to follow up well, we will keep you in the loop of what is happening so you know we are doing our job.

We look forward to seeing you in the class and do business together.

P. S. Curtis would be open to sit down with you and have a discussion on helping you develop Commercial Real Estate deals through your existing clients or people you are talking to.

New Water Conservation Regulations

New Water Conservation Regulations

Effective January 1, 2017, new water conservation regulations will take effect for interior water fixtures in almost all single family residential properties.

In 1992, the California Legislature passed SB-1224 which imposed water conservation standards on all toilets and urinals installed in all single family residential homes, multi-family residential properties, and commercial properties. With California’s ongoing drought, lawmakers turned their attention to extending these requirements to the rest of the property in California. As a result, in 2009 the California Legislature passed SB-407 extending the toilet and urinal standards to all properties built before January 1, 1994 and in addition added shower and faucet standards as follows:

  • Toilets- no more that 1.6 gal/flush
  • Urinals-no more than 1.0 gal/flush
  • Shower- no more than 2.5 gal/minute
  • Internal Faucets- no more than 2.2 gal/min

However, SB-1224 only applied to new fixture installations after January 1, 1994. Older properties were exempt from the law.

These requirements were added to California Law as sections 1101.11102.115 of the Civil Code. These lawmakers appreciated that complying with these standards could cause some economic hardship if retrofit was immediately required so a schedule of compliance was established.

  • All single family residences must be in compliance by January 1, 2017; and
  • All multi-family and commercial properties must be in compliance by January 1, 2019. In addition, if any such properties were being substantially improved or refinanced prior to the compliance deadline, compliance must occur at the time of improvement or refinance.

Disclosure Obligations: The law requires that any Seller must disclose to any Buyer whether or not the property is compliant with the water conservation law. This is in part already referenced in the California Real Estate Transfer Disclosure Statement (“TDS”) and non-compliance would have to be disclosed on the Seller Property Questionnaire (“SPQ”). While the law does not impose this disclosure obligation on real estate agents, the prudent agent should inquire whether or not a property is in compliance since it is possible that a Seller might not be aware of the law.

While there are no monetary sanctions set forth in the law for non-compliance, local governments and water agencies have the authority to impose additional regulations which could include non-compliance penalties. Further, non-disclosing Sellers would reasonably be liable to buyers for the costs of compliance.

Source:

SACrealtor.org

BPE Law Group