Insider Secrets Podcast Episode #58
Featuring Guest: Dan Lewkowicz
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Dan Lewkowicz is a seasoned real estate veteran with over a decade of experience in many facets of the real estate industry. Starting his career “house hacking” he quickly moved on to flip houses in and around metro Detroit and eventually created a company called Renaissance Real Estate Ventures which specializes in the acquisition, financing, renovation, and resale of single-family residential properties in the booming city of Detroit, Michigan.
Before joining Encore Real Estate Investment Services, Dan was a Senior Advisor at Fortis Net Lease specializing in commercial real estate investment sales. Dan is also a former business development executive for Amazon in Detroit Michigan. Currently, Dan is director of investment sales at Encore Real Estate Investment Services and specializes in shopping centers, medical office buildings, industrial fulfillment centers, quick service restaurants and automotive repair and parts stores. Of lesser known fact, Dan possesses industry leading knowledge on cannabis cultivation and its impact on the economy in general, and industrial commercial real estate specifically. An expert on Multi-Family and the current economic undercurrents facing this asset class in today’s #postcovid world, Dan often expresses the incredible opportunities for investors of all sizes.
Dan has four lovely children and resides in Oak Park, Michigan with his fiancé Brady and enjoys running, lifting weights, yoga, and playing acoustic guitar.
“I’m passionate about real estate. I’m passionate about helping people. I’m passionate about building my future and my future with my fiancé. And I’m just passionate about the whole commercial real estate industry” – [Dan]
“With title insurance, what you’re doing is you’re paying a one-time fee, a one-time premium, and that premium is going to insure against things that may or may not have occurred in the past.” – [Dan]
“The title insurance policy really serves to protect the lender who has an interest in the property or the new owner in case there’s a claim that comes up that wasn’t discovered during the title search process” – [Dan]
“When I’m able to focus on one thing and become an expert in that one narrow focus, that’s where I’m most successful” – [Dan]
“I enjoy the process of receiving the offers and then going through the whole process of due diligence to closing ” – [Dan]
“I love the fact that real estate is an abundance mentality and people want to help each other” – [Dan]
“I really think that in order to build yourself and to build your brand, you have to be a listing agent, especially in the beginning” – [Dan]
“I love listing. So I’m definitely a listing broker. I chase after the listings” – [Dan]
- Dan describes himself as “Passionate”.
- He shares his backstory and how in College he was trying to find his way and utilizing that experience to figure out about people and how the World works.
- Dan shares how he would go out bidding on projects of potential customers. He went out the first time with his project manager to visit a site which was an old simple home. Dan saw the project manager take out a graph paper and made an obsolete thing into beautiful and functional. That was something that inspired Dan and stuck with him since then.
- Dan was recruited for a position in sales department at Amazon Business in Detroit Area.
- When I left Amazon, I said to myself, how many properties would I need to purchase and cash-flow in order to replace my income at Amazon? And the answer at that time was 20. So I went out, built a portfolio, I raised some money. I started buying these homes instead of cash-flowing them and renting them.
- So basically title insurance is interesting. It is unlike any other form of insurance in so far as with other insurance, like for example, property insurance or casualty insurance or life insurance, you’re paying a premium over time for an event that may happen in the future.
- With an absolute triple net property, the bottom line figure that you collect as your rent is net to you because the tenant themselves actually pays for the insurance on the property.
- Dan uses systems like CoStar, which is essentially a large database of property all across the country.
- When doing a proposal, Dan orders drone photographs of the actual property. This helps him in seeing how the property and traffic looks like. He then shows it to the investor and the owner.
- Whenever I have a property for sale, I always put that information out on LinkedIn. And oftentimes people will reach out because they saw the flyer posted on LinkedIn
- Dan’s Secret: Always find a mentor. You should never go alone, especially in the beginning.
[02:35] Introducing today’s guest, Dan Lewkowicz.
[04:21] In one word, Dan, what describes you best personally and professionally?
[05:16] Dan Lewkowicz’s background story.
[16:29] What’s your deep rooted passion in real estate?
[20:22] When somebody buys a Wendy’s, what are they buying actually?
[21:40] Some of the resources that you use as a commercial broker, what are some of your best resources technology-wise?
[23:57] How Dan uses LinkedIn to sell properties.
[24:25] What do you see as any big pitfalls that are out there that an investor should look for?
[26:30] Do you really think that 10 31 will go away?
[32:48] What are some techniques that you use right now or working on for your company and marketing your course that you’re building?
[34:37] Favorite tourist attraction of Dan.
[35:21] Favorite book of Dan: “Think and Grow Rich” by Napoleon Hill.
[38:46] How to contact Dan: LinkedIn (Dan Lewkowicz), Phone (248-943-2838)
[00:00:00] Mike: Hey everybody. Good afternoon, and welcome back to another episode of Insider Secrets. Today, I’m joined by Dan Lewkowicz and I am so excited. Dan, tell the listeners what they’re going to be able to learn today.
Dan: Sure. So we’re going to learn about triple net lease. We’re going to talk about some Insider Secrets to success in the real estate industry.
We’re gonna talk about networking. We’re going to talk about growth and we’re going to talk about just some general real nice tips and tip bids about how to be successful in our industry.
Mike: Yep. And you’re going to have to tune in to hear the rest of Dan’s story. So we’ll see you inside.
Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management experience.
Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.
Mike: Hey, good afternoon, everybody and welcome back. It is Mike, your host of Insider Secrets, and Insider Secrets is brought to you by My Core Intentions. And if you’re new, Hey, I want to welcome you. And thanks for being here. And maybe you stumbled across this podcast, or maybe you were intentional about seeking something out in the multi-family or commercial real estate space, and you found us.
[00:02:00] But listen, Insider Secrets every Tuesday, that’s the place to be. We bring you good brand new relevant content for what’s going on today in the marketplace. So follow us on social media. Okay. Instagram, Facebook, follow us like us, subscribe us, help our ratings. And follow us for sure on Apple and Spotify and wherever you listen to your favorite podcasts, because we’re on all those platforms.
Please share it with somebody else. And cause I know that the relevant content that you’re going to get is really going to help you. Especially if you’re thinking about doing something different, if you are looking to be more intentional about your real estate investing or scaling your business.
I want to see if we can help you get so much knowledge that it just overflows for you. But Hey, listen, I am really excited about my guest today. I am joined today by Dan Lewkowicz and Dan is a seasoned real estate investor. He’s got over a decade of experience in many facets of the real estate industry.
[00:03:00] I know today that we’re really gonna focus in on the commercial arena, and Dan’s got some exciting news and some things that he’s doing that he’ll talk about at the end. But starting his career, he house hat, and I’m sure Dan probably was house hacking long before it was sexy.
That’s what I did. But he quickly moved on to flip houses and around the Metro and Detroit area. Eventually he created a company called Renaissance real estate, and he got into several different ventures through that. He specialized in acquisitions, financing, renovation, and the resale of single family residential properties in the booming city of Detroit.
Went on to build a company called Encore Real Estate, and it’s an investment service. He’s a senior advisor today at Fortis, net leasing specialist in a commercial real estate space. So I’m going to let Dan talk a lot more about that. But Dan currently lives in Oak park, Michigan with his four children and his fiancé Brady. Dan enjoys, running, lifting weights, yoga, and playing the acoustic guitar, which we’re going to talk a little bit about music on this today too.
Hey Dan, welcome. I’m so glad that you’re here today. It’s good to see you again.
[00:04:00] Dan: Yeah, thanks for having me. I guess we get to return the favor a little bit for you being on my show. Now I can be on your podcast.
Mike: Yeah. I was just on your show a little bit ago and that was a big hit. So I really enjoyed that.
You do a really good job on your podcast and interviewing people and you make people feel comfortable, so that’s good. Hey, here’s what I like to know. So I ask all my listeners upfront in one word, Dan, what describes you best personally and professionally?
Dan: Oh, that’s such a good question.
In one word, what would describe me best? I would say passionate.
Mike: Okay. Anything particular that you’re passionate about right now?
Dan: Yeah, I’m passionate about real estate. I’m passionate about helping people. I’m passionate about building my future and my future with my fiancé. And I’m just passionate about the whole commercial real estate industry.
[00:05:00] Mike: Interesting, good for you. So I know we’re going to do a deep dive into a lot of that and get some more information. But just briefly went over your bio and I never liked to do any type of justice to somebody’s bio. I want people to tell us their background. So why don’t you share with the listeners, how you got into real estate and the commercial side of it, and what got you to where you’re at today?
Dan: Sure. In college I was trying to find my way and I think that I utilize that experience to just try to figure out more about people and then how the world works. I got a BA in Psychology and at that point in my life, I wasn’t exactly sure where I wanted to go. And I had started a company back in 2005 with a very close friend of mine called Disability Made Easy, and it was a barrier free home modification company.
So what we did was we made homes, handicap accessible for people that had terminal illness or injury. And I ran the sales and marketing for that company. But I would often go out on the calls to bid out different projects for potential customers. And I remember very vividly, the first time I did that, I went with our project manager.
[00:06:00] We got to this one site, just an old home, nothing special. And he took out his graph paper and he sat there and it was incredible to watch him draw and take something that was really functionally obsolete and make it beautiful and functional. And I’ll never forget just that image in my head of being able to take something and transform it to something that was more useful.
So that really stuck with me. And when it came time to buy my first home, I was looking at some houses. This was in the middle of the recession. I was looking at some houses that were to move in ready, and almost ready to pull the trigger on one of them. And then I noticed that just a few houses away, there was a bank owned property.
So I reached out to the lender. The house had been through foreclosure. They’re going to put up for sale. So I purchased the house for about half the price that I would have paid for the other one. And I hired out all the different trades myself. And I remember telling every person I hired out, Hey, I’ll pay you a little bit extra.
[00:07:00] But keep in mind, I’m going to sit here on the project with you and I’m going to watch, I’m going to ask you tons of questions. And by the time I finished that, I was like finishing up that project. I remember my friends would ask me, what are you going to do, Dan, once you’re finished with your house what are you gonna do with your life?
And I joke with them. I said, I’ll buy another one. And that’s really what I did. I bought another one and another one. And it just became a passion of mine to by something that was outdated or maybe obsolete in certain ways and do that project manager didn’t and turn into something beautiful.
So that was always a side thing for me, but I was always something I was very passionate about. As time progressed, I knew that I would be moving more full-time into real estate. So actually got a job running a sales department at a title insurance agency. And the reason I took that job is because I believe that title insurance is an elusive aspect of real estate, both commercial and residential. And most investors and brokers and realtors don’t really understand it.
So I figured that if I could run a sales department there, I’d be able to learn a lot about a topic that would be very valuable. So I did that towards the end of my time there, I was actually recruited for a position with Amazon and I was working here in the Detroit area at Amazon business.
[00:08:00] And that was an interesting experience to be trained further in sales through a large corporation. And all the while I was continuing to flip houses and it was, I’d be at work at my desk, but I’d be doing these deals on the side. And I just remember at a certain point, when I left Amazon, I said to myself, how many properties would I need to purchase and cashflow in order to replace my income at Amazon?
And the answer at that time was 20. So I went out, built a portfolio, I raised some money. I started buying these homes instead of cash-flowing them and renting them. I ended up fixing them up and selling them either to homeowners or to investors. And then, as I moved away from doing that in the suburbs here in Metro Detroit, I moved into the actual city of Detroit because the city of Detroit in my experience is about seven years behind the rest of the country in terms of the foreclosure crisis.
[00:09:00] So what I was doing at the end of the recession in the suburbs, I was able to do seven or eight years later in Detroit. And then eventually I was recruited by a net lease brokerage at the time to become a broker. And I did a calculation. I sat down with my fiancé and thought about the differences between being a boots on the ground. As I used to call myself, somebody who specialized in adult daycare, babysitting contractors, putting my own money in or raising money, having to deal with stolen furnaces and hot water heaters and all kinds of problems. And I just decided, let me look into this net lease brokerage thing.
And I did. And I quickly saw that it was something that just was really a calling for me to be a broker. I was able to kind of work from an office or work from home. I was able to work all over the country and never really wasn’t in meeting my investors, my buyers, my sellers, wasn’t going to closings.
Typically wasn’t even seeing my building. I got out of this single family rental that I had and really focused 100% on a net lease brokerage. And I’ve really loved it. In fact, I’m just finishing up a course that we’re going to launch here in a couple of weeks called the CRE Pro Course.
We just finished all the taping for the course this weekend at the studio. And it’s a training course that teaches people how to become top commercial real estate brokers.
[00:10:00] Mike: Wow. Listen, at the end of the show, I want to make sure that we allow people, you tell people how they can go get that course or get access to that.
And so we’ll talk about that again at the end. So I put it on on my notes here. Hey, listen, I really laugh about what you said about adult daycare, because that’s what my broker in the real estate office used to say. He’d bring me in the office and he’d go, you’re the only guy here that works.
He’d say everybody else, I have to take care of. It’s like running an adult daycare.
Mike: Yeah. I always thought that was a great line. Hey, you know what I want to circle back on. You mentioned title insurance being an elusive part of the real estate transaction.
Mike: Could you just spend a couple of minutes? I know we have some new people that listen in on this podcast and could you explain title insurance for a minute? And even from a 10,000 foot view, but here’s what I want to know. Where did it come from? Who said, Hey, listen let’s put this title insurance in place so that we can make some money from, right?
[00:11:00] Dan: Yeah, sure. So basically title insurance is interesting. It is unlike any other form of insurance in so far as with other insurance, like for example, property insurance or casualty insurance or life insurance, you’re paying a premium over time for an event that may happen in the future.
So you’re insuring yourself against potential risks that may happen in the future. With title insurance, what you’re doing is you’re paying a one-time fee, a one-time premium, and that premium is going to insure against things that may or may not have occurred in the past. So when a property is going to change hands, or when there’s going to be a new loan policy on a property, those who have an interest in property want to have some type of security to ensure that their position in the property is protected. So here’s a great example. Let’s say that I’m going to go ahead and purchase a home, right? And that home over the last 10 years, maybe the owner had a new roof that was installed on the home and they never paid the contractor.
[00:12:00] The contractor may put a lean on the property and then potentially if there was no title insurance in place that new owner may be liable.
So the title insurance policy really serves to protect the lender who has an interest in the property or the new owner in case there’s a claim that comes up that wasn’t discovered during the title search process. And then that policy is then used to cover the potential damages or the potential claim that somebody might have on the property that’s in question.
Mike: Great. Great explanation. I think that’s very helpful. The other thing is triple net, right? Net lease. I know that’s going to be over some people’s heads here. Talk about triple matter net lease a little bit and how that plays into the real estate arena, who benefits from it? What big players take part in it?
Dan: Sure. So the way that triple net property works is, you’ve either got single tenant net leased assets or multi-tenant properties. And there’s variety of different types of lease structure, but for purposes of simplicity, we can just talk about an absolute triple net lease.
[00:13:00] So what that means is that the owner gets the rent and the rent that they collect from the tenant is net. So meaning typically in other types of real estate investments, you might have your rent as your general income, but you’re going to have all kinds of expenses, right? You might have capital expenditures, you might have maintenance, you might have utilities, taxes, insurance, things like those.
However, with an absolute triple net property, the bottom line figure that you collect as your rent is net to you because the tenant themselves actually pays for the insurance on the property. They pay for the taxes, they pay for any common area maintenance. And they also pay for the maintenance and repair of all of the aspects of the property.
So the roof, the structure, the parking lot, et cetera. So it really, it is in essence, the most passive and stable form of real estate investment. And because of that reason, typically the capitalization rates or the return are lower compared to other asset classes, but they are very stable.
[00:14:00] And typically when we talk about single tenant net leased assets, we’re talking about properties that are leased out to major national tenants, like your Walgreens, your Rite AIDS, your McDonald’s, your Starbucks, et cetera. So again, there’s a tremendous amount of inherent stability because the guarantors of the leases are very stable creditors.
Mike: Yeah. I always found that part of the real estate industry was really interesting.
And one of the things I really like about real estate is there are so many areas you could spend your time. And if you want to be really good at something, pick apart, pick a focus discipline in real estate and stay focused on that because we could get the shiny object syndrome so easy in this business, and go here or go here.
That’s why, I always liked multifamily. You obviously like the commercial side. So there’s that disparity there as well. Hey, I just want to tell the story real quick. I had a buddy, we sold residential real estate for a number of years, and we’re both very successful. He was on one side of the town that I was in.
[00:15:00] We were in Schomburg outside of Chicago. It’s a pretty big suburb populations, like a hundred and 130,000 people. So it’s a good sized suburb, right? He was on one side of town. I was on the other side. We were both at remix offices and he leaves real estate one day and decides that he’s not going to sell real estate anymore.
And I run into him at a Christmas party, like a year later. And I said, Joe, what happened? He goes, I got the best deal here. He goes, I started to build autosome and doing triple net leases and he put a ton of money. And I think today he owns about 80 auto zones around the country. And has done really well for himself.
So it’s an interesting business that side of it, there’s a lot to do.
Dan: Yeah, no question. I definitely agree with you. It’s very important to be a specialist. I’ve suffered in my life from shiny object syndrome for quite some time. And what I found though, is that when I’m able to focus on one thing and become an expert in that one narrow focus, that’s where I’m most successful.
[00:16:00] It doesn’t mean that’s the only thing you’re ever going to do in your life. It just means that until you become an expert in that niche you focus on that thing, and I think that especially in the commercial real estate industry, like I’m part of a brokerage that only does net lease, right?
We don’t do residential and commercial. We don’t do multifamily hospitality and net lease. We’re specific with net lease, and I think that it’s very important because, as an investor hires a broker, they want to know that they’re working with somebody who’s an expert in that focus, and not that this is just a small part of their business.
Mike: Yeah. Very true. So listen, with all your experience, and you’ve done a number of things in the real estate space. What’s your deep passion. What’s your deep rooted passion in real estate?
Dan: I love listing. So I’m definitely a listing broker. I chase after the listings.
And then I love to put them on the market, and I think my favorite part of it is when I have a really solid listing and they put it out to market and a lot of people are expressing interest to go back and forth and really just analyze the deal. I know the deal, it’s my listing. But I get to interact with people from all over the country who are interested in that specific property and to go through all the details of the deal and help them underwrite it.
[00:17:00] And then to just basically work as hard as I can to get top dollar for my seller. I really enjoy that. I enjoy the process of the negotiation. I enjoy the process of receiving the offers and then going through the whole process of due diligence to closing. In fact, I have a closing today on a Wendy’s property in grand ledge, it’s been a lot of fun because, from the minute it was on the market, we had tons of exposure and tons of interest.
And I listed that property I think around January 6th, we had it under contract January 15th and today is what, March 2nd. So you’re talking, less than two months from listing to close. So I just love that process of marketing my deals. That’s probably my favorite part of it.
And then I love the mentorship aspect, I love when people give in the industry, and that’s one of the reasons we created this course is because a lot of people were reaching out and I was having two or three calls a week where new people in the industry just wanted to learn.
[00:18:00] And I love that part of real estate. I love the fact that real estate is an abundance mentality and people want to help each other. And there’s just so much information out there and so many good people because all of us have had mentors. And I think all of us really want to give back, and I believe that is unique to real estate.
I think that there’s just a lot of collaborative efforts and it’s been so enjoyable and rewarding to be able to network and collaborate with so many great people.
Mike: Yeah, I think you’re so right about that, and you and I met on a platform and in a circle of people that are like that. That we all are like giving back to each other, Hey, how can I help you? What can I do for you? That type of atmosphere. And I think that makes it more exciting. Any one of us that we know and anybody that we know, Dan, I don’t think anybody comes from a place of scarcity.
Somebody said to me the other day, they said what about your competition? I said, what competition? I don’t have any. I said, the only competition I have is myself.
[00:19:00] Mike: So I just think there’s so much business out there. I just want to wait before I want to let you go here. But the listing agent thing, you really got me because I don’t hear many people say that and really the true top producers in the real estate business are listing specialists, right? I coach a guy who just went into real estate business. And I said to him, look, if you want to make money and you want to be really successful, be a listing agent, focus on listings, because if you can leverage yourself and have 25 or 30 listings on a Monday morning, you come in and you have five or six offers.
Dan: Exactly. Exactly. They say that the broker that lists, lasts.
Dan: Because it’s really, that’s how you get your name out there. And I’ve had other deals that come about because I’ve got my listing out there and then somebody calls me and maybe this listing isn’t good for them or it’s gone, it’s no longer available, but I’ll put them into something else and activity breeds activity.
And I think the only way to do that is to get listings. And I think that a lot of young brokers, when they get into the industry, they may be a little intimidated or a little scared, and they think Hey, like I can call all these people and say, Hey, let me list your property. But who am I? And people are reaching out to them all the time.
[00:20:00] If I call somebody and say, Hey, what do you want to buy? It’s less invasive. It’s less threatening. In most people, most investors say, Oh, this guy wants to shop for properties for me. Great. I’ve got 10 other people doing it. Let me do that as well. And I’ve watched young people getting in industry, I think make that mistake of chasing after only buy-side representation. And I really think that in order to build yourself and to build your brand, you have to be a listing agent, especially in the beginning.
Mike: Yeah. There’s no doubt about that. I wanted to circle back on though on the Wendy’s transaction that you’re doing.
So when somebody buys a Wendy’s, what are they buying actually? If I’m a buyer and I come in, am I buying that whole business? Am I buying just the real estate? What am I buying as a buyer?
Dan: Great question. So let’s take this particular deal, for example. So this is a Wendy’s, if you’d drive by it, it would just look like any other Wendy’s. It’s not a corporate store, most of them are not, it’s a franchisee. So the franchisee is a large franchisee here in Michigan. And they have over a hundred different locations whether they be, Del Taco, MOD Pizza, Applebee’s, Wendy’s et cetera.
[00:21:00] So in this specific entity that has signed on the lease, there’s 56 locations. So they’re operating this location in 55 other locations. The lease is guaranteed by that whole entity. So even if this store would shut down, the owner still has the security of the other 55 locations. So when I’m marketing is the building. Okay. So that building was listed for sale.
My client is the owner. He happens to live in Las Vegas, and I’ve now sold that building as of a couple hours from now to another investor who’s coming in and buying the building. The tenant, the franchisee is operating as per usual. There’s no transfer of the business whatsoever.
Mike: Okay. Interesting. That’s very interesting. So listen, some of the resources that you use as a commercial broker, what are some of your best resources technology-wise, systems, things that you have in place that help you on a day to day basis?
[00:22:00] Dan: Yes. Sure. So we employ a lot of different technologies and what I’ve done during my time in the industry is might just try to find the best systems that work.
And I’ve built my own methodology based on the things that worked and the things that didn’t work. And we teach all about them and how to use them in our course. But essentially, we utilize systems like CoStar, which is essentially a large database of property all across the country.
I have a team in the Philippines that does all the databases for me, so I can get information from CoStar and then send it over to them, and they’ll go ahead and back fill it and give me all the updated owner’s contact information, utilize different services and systems to send out email blasts.
So as soon as that Wendy’s closes later today, I’ll send an email with a flyer saying, Hey, my name is Dan Lewkowicz, I just sold this property. I know you own a similar property, let me put together a proposal for you. That way, I’m now like restarting the process and getting more business. I’ll also do the same thing in the area.
[00:23:00] Say, Hey, I know that you own an auto zone, right? Or a McDonald’s or some other property within the immediate vicinity. I just sold one in your location. Do you want to sell your property? So we use those different systems and technologies. We partner with some different drone companies.
Whenever I do a proposal, I ordered drone photographs of the actual property helps me see what the property looks like. Helps me see what the traffic looks like. The area retailers helps me to have to put together a really nice package that I can show the investor, and then I can show the owner. And then eventually if I Mark in the property that I can show the general market in terms of what the property looks like from an aerial perspective.
We also utilize different listing platforms and different services to help us get the maximum exposure for the property once we put it on the market and blast it out to different brokers or owners or real estate investment trust managers, or fund managers, et cetera.
So we really leverage all those technologies, and I personally, I’m a big fan of social media, specifically LinkedIn. I’ve got a big network on LinkedIn and I always make sure to leverage that, I post daily content. So I make sure that I’m able to provide value to people so that they follow that content.
[00:24:00] And then whenever I have a property for sale, I always put that information out on LinkedIn. And oftentimes people will reach out because they saw the flyer posted on LinkedIn.
Mike: Yeah. LinkedIn is really big these days, and I think that anybody in the business arena using it really can see some advantages if they leverage themselves with it.
Mike: Yeah, it’s one of those leverageable tools, right? Hey, knowing where the market’s at today and where the world’s at, what do you see as any big pitfalls that are out there that an investor should look for?
Dan: Yeah. That’s a great question. I think that now is an incredible time to consider, if you have net lose assets and you haven’t had a valuation in the last six or 12 months, you should definitely reach out.
We put together these complimentary no obligation values, value reports all the time for people. There’ve been a lot of changes in the industry. The industry has continued to be white hot up until maybe 60 days ago, ten-year treasury was at an all time low as below 1%.
[00:25:00] And I think that right now, people should consider the fact that number one, we’re not exactly sure what’s going on in the current interest rate environments. We’ve seen that the ten-year treasury go up by 60 or 80 basis points in the last 60 days, which is a very quick jump. I think that there’s a lot of shakeup going on in terms of major retailers have declared bankruptcy or are declaring bankruptcy or will declare bankruptcy.
And I think that there’s some major potential changes based on this new administration, whether it be potentially abolishing capital gains taxes and turning them into ordinary income tax rates. And then also the 10 31 exchange that is potentially on the chopping block. If either of those two things go through, what’s going to happen is you’re going to see just the way I like to say it is 500,000 investors are going to try to wash to get through a five by eight opening. And it’s you need to know what your property is worth now and be ready. Should you need to pull the trigger if you wait until that potentially happens. And then you start shopping around and start getting value proposals, you’re going to miss it.
[00:26:00] Because if that does happen, we’re going to see such transactional volume as people try to 10 31, one last time trying to sell a property and have lowered tax consequences one more time. And then we’re going to see a whole repricing across the market. So I think that right now we’re all holding our breath and watching. There’s not a lot of inventory on the market, things that go on the market sell very quickly.
And I think that it’s at this point in time, it’s exciting. And there’s a lot of opportunity. I just foresee a lot of potential change in a very short amount of time.
Mike: Do you really think that 10 31 will go away?
Dan: I hope not. I That’s 37% of our business. And if you think about it as an investment vehicle, most of our investors are buying a property.
They’re having appreciation. They’re selling the property and they’re doing it all over again one after another. And if you would get rid of that, people are going to be holding properties longer. And when they go to sell a property, they’re going to have significantly less purchasing power.
[00:27:00] Because keep in mind, you could leverage that asset that you’re buying and many times the difference in potential purchasing power is incredibly significant. And keep in mind also that it’s not just the brokers that will be affected, it’s every single individual that’s affiliated with the transaction.
So it’ll be the title company. It’ll be the lenders. It’ll be the appraisers. It’ll be the survey companies. There’ll be the environmental companies. So really I think it would be a travesty if that was abolished. I don’t think it will happen. I think that too many people who are in positions of power have a skin in the game to let that happen.
However, it’s definitely been made clear that it’s a potentially on the chopping block. I just would hate to see that happen.
Mike: Yeah, I would too. I think that will put a damper in the marketplace, but here’s what you said, get value on your property today, understand what your property is worth today.
[00:28:00] And I think you can look at that two ways, right? Because even if I know what my property is worth today, and they do something in the market to take away the 10 31 or make some substantial tax law change, that’s going to cause more sellers to go sell their property to take advantage of where it’s at today.
Now all of a sudden you have a rush in the market, today might be a sellers market, but now it’s going to become a buyer’s market. And we know what happens now, cap rates are going to go up, prices come back down. So there’s been such a compression of cap rates in the marketplace now over the last few years. And all indications today still indicate that those cap rates are still going to go down. If there’s a rush in the marketplace, I think it could almost be disastrous for the economy.
Dan: Yeah. I think that there’s a lot of major pitfalls for that if that were to go through. I would encourage everyone to write a letter to your Senator and take it seriously because it would be incredibly impactful. And this is a business that has, we’re talking tens or hundreds of billions of dollars of transactions every year. So it’s not a small part of the US economy.
[00:29:00] In fact, it’s probably one of the largest sectors of the US economies. I think it’s important to keep in mind that if there’s something that would have such a major affected dampening the transactional volume, that’s going to trickle down and affect many more parts of our economy.
Mike: Yeah, for sure. I think about it here, I remember sitting at lunch in 2008, when they were carrying boxes at Lehman brothers.
If you worked at Lehman brothers, you were carrying a box of personal belongings out, you were going home, not knowing when you were going to go into work again. And I looked up at my sample across the table and I know this story, and I said, we’re screwed, aren’t we? He said, yeah. And in 2005, I saw the market soften, but never did I have any indication that was going to happen.
But if you look at these indicators now, and I’m not an economist by any means Dan, there could be some disastrous stuff on the horizon. Hey, listen, this show is called Insider Secrets.
[00:30:00] I always like to tap into the knowledge of my guests and see what kind of secrets you’re willing to share or want to share with the listeners that somebody from a standpoint that they’re new in this journey of real estate investing. And they’re either just starting out or they’ve been in it for a while and they’re trying to scale their business.
Dan: Yeah. So number one would be always find a mentor. You should never go it alone, especially in the beginning. And a mentor can help you to avoid so many of the mistakes that are inevitable.
If you’re a new investor, who’s trying to do this by yourself. And there’s really no reason to do it by yourself, because like we’ve talked about, there’s such an abundance mentality in this business. And pretty much everyone who’s been successful is successful because of the people that help them to get there.
Definitely reach out and find a good mentor, good mentors, and surround yourself by great people, leverage your network, build on your network. I’m great at the things that I do. But what makes me greater is that I know other people that are good at different things. So if I have a client that comes to me that needs something that I’m not an expert in, I can just flex my network, make a phone call or send an email.
[00:31:00] And now the resources that I have available that are in my arsenal, are now available to my clients. So I think that’s very important. I think it’s also really important to become an expert in something, like we talked about earlier. And there’s so much knowledge out there, whether it be subscribing to a good podcast, reading good articles, paying a little bit of money for a course, become an expert in something, whatever you’re going to focus on, become an expert. And don’t really hesitate because, I think that a lot of people get into the industry and they get overwhelmed and say as a broker, a lot of people say I don’t know if I can get on the phone and talk to investors who own 10 or hundreds of millions of dollars of commercial real estate.
But then they realized that after doing it for a few months, they often will know more than those investors know. And that’s only because they take that leap and they become experts and they learn and grow. And through doing that, you can really add value. So I always tell people that, and I try to make it my motto of add value and everything else follows when I’m doing business.
[00:32:00] It’s great for me to get listings that’s my bread and butter. That’s how I build my business. I do that though by networking with investors and offering a value proposition. I offered to evaluate their property free of charge so that they know what it’s worth, and eventually if I interact with them enough and I provided enough value when the time comes for them to sell the property, they’re going to turn to me because I’m the one that provided that value.
So I think that’s really important. There’s a lot of resources out there leverage them and really do the best that you can to surround yourself with good people and become an expert in the field.
Mike: And there’s a lot of free content out there. There’s a lot of paid contents out there, and I think there’s all kinds of advantages in the marketplace.
And you said something about podcasts and Hey, listen, shameless plug, there’s two great podcasts right here. You’ve got Dan on top and you’ve got Insider Secrets, so.
Dan: That’s right.
Mike: Hey Dan, listen, building a personal brand is always an interesting dilemma to go through. What are some techniques that you use right now or working on for your company and marketing your course that you’re building your personal brand would?
[00:33:00] Dan: Yeah. So that’s a good question. I think it’s really important and it’s also relatively easy in today’s day and age, I work for a larger brokerage, but I’m also a brand within that business. So I think it’s really important.
Even if you work for a national title company or a national insurance agency, you’re still your own brand within that larger corporation. So I think that’s really important. I think some people lose sight of the fact that, Oh I’m with this company and this company is already branding for me, that’s not true. That company’s branding for themselves and you can benefit yourself and the company by branding yourself.
So for me personally, I have my screencast show that I put a lot of time and energy into. I’m interviewing great people, we’ve already released, I think 57 episodes as of this morning. So that helps me to build my brand and it also helps me since I’m associated with experts. Number one, that I’m learning every episode that I produce, I learned from my guests every single time without fail, but it also allows me to be associated with other experts.
[00:34:00] And I think that’s the power in today’s day and age is that through social media, create a profile, find a way to put out quality content and interact with other people, engage on their content. You have a plethora of experts out there and whatever you specialize in, the more that you associate yourself with them, the more you’ll be associated as an expert as well.
So I think that those are really great ways to build your brand through the identification with other experts.
Mike: That was really good. Thanks. Hey, we’re starting to wind down. I like to ask some fun questions, something a little bit on a lighter note right now. I got a reason for this starting this a little bit early, but Hey you’re in Detroit, right?
Mike: Favorite tourist attraction?
Dan: Favorite tourist attraction, so it’s in the state of Michigan, not necessarily in Detroit. We really love the grand hotel, which is on Makena Island between the upper and lower peninsula. It’s just a beautiful old hotel. And we’d been there a few times over the last few years and I think it’s an incredible place to visit.
Mike: Nice. Yeah, it’s a beautiful place, that’s for sure. How about favorite restaurant?
[00:35:00] Dan: Ooh, favorite restaurants. That’s a good question. In Birmingham we happen to really love a place called street side. So an old like seafood place. I think that’s a great restaurant. I also love prime and proper in the city of Detroit.
That’s a great one as well.
Mike: Nice. And then the most favorite book you’ve ever read?
Dan: Ooh, I would say probably. Can I give you two?
Mike: Sure. Absolutely.
Dan: So “Think and Grow Rich” is an incredible book. It’s one of those books that even if you’ve read it, you haven’t read it. You got to read it again. I think I read it once and I immediately read it again and a third time as well. I think that the principles in that book are incredible, especially some of the principles about visualization and, internal, I’m a big believer that internal reality creates external reality.
The story that a person tells themselves about themselves, other people in the world is what creates their reality. So I really love a lot of the stuff in that book about sitting down with a pen and paper, deciding how much money you want to make in a year, and then visualizing it. Visualize it in your hand, what does it feel like?
[00:36:00] What does it smell? What does it look like in your bank account? How does it feel to have that? And I just find that whatever I visualize, it’s like whatever’s in my mind is what’s going to happen for better or worse, and I think that’s, really an empowering way to view the world.
So I really loved that book. And then there’s another book I’m actually looking at it right now on my shelf it’s called “Influence – The Psychology of Persuasion” by Robert Cialdini, and it basically gives you many major I’m a psychology guy. So it gives you, it breaks down sales from a psychology perspective and teaches you a lot of fundamental aspects of the sales process.
Like the reciprocity principle, the scarcity principle, like the contrast principle. It’s a really great read and it has many fundamental keys to sales success.
Mike: Both really great books. “Think and Grow Rich” is that my nightstand, has been for years, pick it up from time to time and read little snippets from it that I’ve highlighted and dog-eared, and it’s a great book that’s for sure.
[00:37:00] So let’s talk about music a little bit.
Mike: You play the guitar, ?
Mike: What kind of music?
Dan: I love the grassroots jam band stuff like OAR dispatch. I really like John Mayer. I like just jamming out, like, I love if my little brother he plays piano and drums and we’ve been having jam sessions since we were little kids, I’ve been playing guitar since I was seven.
And he started playing drums not too long, not too long after that. So I just love, I think that music is a universal language. And if you’re not a musician, I don’t think you can relate to the fact that like, when I jam with people, it’s like we communicate without words. I think it’s a great way to express yourself.
And for me, it always provided this healthy outlet to just unplug and escape and just let my mind wander into the music and anytime I pick up my guitar, I always feel refreshed. And it’s like a deep breath from my mind.
[00:38:00] Mike: Yeah. I’ll tell you, you’re singing to the choir. Because a few years ago, when I was gone on vacation, I taught myself how to play the piano. I think one of the things I regret over the years is that I didn’t play music sooner. I’ve always loved music, always had a passion for it.
So when somebody tells me that they’ve been playing since they were seven years old, I have a little chat of jealousy around that, but good for you. Yeah, and I can relate to what you’re saying about gives you that revitalization, you walk away. If you go, there’s days that I go, Oh, I can’t do this anymore.
And I’ll go sit at the keyboard and, within an hour or so, I just feel so much different. Yeah. Good. Hey Dan, listen, this has been great and you are definitely a wealth of knowledge. You talked about talking to people and learning from each other, and I definitely have learned some things from you today, and I appreciate that.
Tell the listeners, how they get ahold of you, how they grab hold of your study course. What it takes to come into your world a little bit more?
[00:39:00] Dan: Sure. You can always reach out on LinkedIn and my LinkedIn name is Dan. Last name is Lewkowicz, LEWKOWICZ, and in terms of if you have property that you’d like evaluations on, or if you’re new in the industry or you’ve been in the industry for a long time, or you just want to talk about real estate, you can give me a call.
My phone number is (248) 943-2838. Again, two, four eight. Nine four three, two eight, three eight. Our course is launching in about two weeks. We have pre-registration open, we’ve got a ton of people registered. We have a course, and then we also have some higher level support, some consulting and mentorship programs available as well.
You can reach out to me directly for more information, or if you’d like to register, you can go to our website that website is CREprocourse.com. Again, that’s C R E pro course.com and that’s something we’re really excited about because it’s allowing us to provide value on a more scalable level.
And I’m just really excited to see how people are going to benefit from that.
Mike: Yeah. Nice, good for you Dan. Thanks for giving back. Any last closing thoughts?
[00:40:00] Dan: No. Just thank you. I always enjoy doing this because exactly like we both said the collaborative efforts in the real estate world are awesome to be a part of. I feel very fortunate to have come into this industry because I don’t think that in other industries, people have the same opportunity. When I pick up the phone or get on a podcast like this, it’s incredible, it goes both ways, but we open up to each other and the desire to help each other and grow. It’s incredible to be part of it makes me really happy to have found this calling.
Mike: Yeah, for sure. And thank you again. I really appreciate your time. I know that we had a little bit of a difficulty sinking up the dates, but we finally got there. So I’m glad about that
Hey everybody, this is another episode of Insider Secrets. I’m glad that you were here today. Boy, we covered a lot of ground with Dan and I am looking forward to you having the ability to rewind this and go back and listen to your favorite part. And Dan’s information will be on our website. We’ll make sure that we get that delivered to you.
[00:41:00] And we are here every Tuesday. So you can find us on Apple and Spotify and all your favorite podcast channel. And we will look forward to seeing you next week. Thanks, Dan.
Dan: Yeah, my pleasure.
Kristen: Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, multifamily investing and property management.
We’re looking forward to having you back again next week for more Insider Secrets.