Tyler Cauble
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How to Find Off Market Properties: Why the Best CRE Deals Never Hit the Market

There's a myth in commercial real estate that the best deals aren't marketed. That they never get sent out to Crexi, to LoopNet, to the MLS. And that's kind of true, but it's also not. The best deals are 100% marketed. You're just not on the list. And if you want to learn how to find off market properties, that distinction matters more than anything else I'm going to tell you today.

I've done some of the best deals of my career completely off market. I'm talking about a nine-story office tower I bought for $1.8 million and sold 15 months later for $4.6 million. And that deal only happened because of an Instagram story. So today, I'm going to break down exactly why the best opportunities never hit the open market, how deals actually get done behind the scenes, and the three lanes you can use to start finding off market properties yourself.

The $2.2 Million Off Market Deal That Started on Instagram

Let me tell you about a deal you will never see on Crexi or LoopNet. This was Newell Tower, a nine-story office tower in Chattanooga that we bought for $1.8 million back in 2021. I sold it in 2022, not even 15 months after we acquired it, for $4.6 million.

Newell Tower: By the Numbers

$1.8M

Purchase Price

$2.4M

All-In Basis

$4.6M

Sale Price

15 Mo.

Hold Period

We had spent about $600,000 on plans, demo, and carry costs, so our all-in basis was roughly $2.4 million. That means we walked away with about $2.2 million in profit in 15 months. It's one of the craziest deals I've ever done.

And here's the thing: we found it completely off market. I posted on Instagram (I might have had 15,000 or 20,000 followers at the time) that I was driving through Chattanooga on my way to Atlanta to look at some projects, and that if anybody knew of anything off market, they should reach out. One of my followers screenshotted that story, shared it with a buddy in Chattanooga, who then reached out and set up a tour that same day to look at three different properties. One of them was Newell Tower. I think we had it under contract literally the next week.

This deal is actually the reason we bought Peerless Mill. The contractor who did the demo for Newell Tower told me he knew of another off market opportunity. No brokers ever touched either deal. That's how some of the best commercial real estate deals get done in this industry.

Why Listed Deals Leave Nothing on the Table

Most investors are hunting for deals by picking over all of the same opportunities. If you're going on Crexi and LoopNet, the phrase is "LoopNet is where deals go to die." I'd say that's 80 or 90% true. You can still find some great deals there (I've bought deals that were listed on LoopNet), but here's the thing: everybody has access to that. Literally everyone. If you have access to that data, so does every other buyer.

Broker email blasts? If you're on a broker's blast list, you're probably one of 500 to 2,000 people getting that email at the same time. Networking events? By the time you see a deal at a networking event, chances are everybody else on the buyer list already has it. I'm not saying don't do all of this stuff. I'm just saying it's a lot more competitive than you think.

There are three specific reasons why listed deals eat into your returns as a commercial real estate investor:

Bid compression. A competitive process eats at the spread before you ever underwrite a deal. I'll never forget my uncle (who's a residential investor here in Nashville) telling me about his neighbor, a doctor, who bragged about a "great deal" on a rental property but was paying a few hundred dollars a month out of pocket toward the mortgage. That doctor didn't need cash flow, he just needed to shelter income. And that's exactly who you're competing against on listed deals. They can pay more than you can.

Adverse selection. The easy deals get listed. The interesting ones really don't. Some of the coolest properties, the biggest deals, the best opportunities just never hit the market. Maybe the seller doesn't want tenants or hotel guests to know something's going on. It's better to quietly shop those deals off market.

The marketing tax. Sellers price the cost of going wide. You pay for the auction. It can get very expensive. What's best for a seller is not necessarily what's best for a buyer. But sometimes there's a middle ground where buyers and sellers meet off market, and it works really well for both sides.

"The best deals are 100% marketed. You're just not on the list."

- Tyler Cauble

Lane 1: The Preview List (The Call You're Not Getting)

Brokers do not list the best deals, at least not at first. They preview them to 5, 10, 20 buyers. My preview list is probably about 50 to 100 people, depending on the type of deal. Right now, I've got a deal we just previewed to about 200 investors that will be hitting the market next week. The top clients see it first.

Think about it at the most basic level. Brokers get paid commissions, which means they only get paid if a deal closes, which means they are highly incentivized to send deals specifically to the buyers they know are going to close. That's why they go out and see if they can get it done quickly first. Some of the top brokers only work with a handful of people.

The preview round closes most of their inventory. If the first 20 buyers want it, the listing is never going live. If we get an offer this week on that deal I just previewed, I'm not listing it. We're getting everything we need without having to take it to market.

So how do you get on the list? You need capital ready. You need to have closed a deal before (even if you were just a minority partner, that's your track record). You've got to be easy to work with. And you've got to be willing to give feedback.

I cannot stress that last point enough. If you get on a broker's list and they send you a deal and you don't contact them to explain why the deal doesn't work for you, they're going to stop sending you deals. I've had plenty of buyers tell me, "Hey, I want to look at all deals that fit this criteria." So I send them those deals. Then you never hear back. You check in, send another deal that checks all their boxes, and still nothing. No feedback. Guess what? I'm taking them off the list. I don't have time to chase somebody down if they're not going to buy or even give me feedback when I send them great opportunities.

Put yourself in a broker's shoes. If you had a deal and wanted the best opportunity for it to close and earn you a commission in the easiest way possible, what does that buyer profile look like? That's what you as the investor need to mold yourself into.

Lane 2: Tired Sellers Who Want Out Quietly

"Tired seller" doesn't necessarily mean somebody in a distressed situation. It could just be an owner who's ready to move on. I had a friend buy a deal for two or three hundred thousand dollars under what the seller had paid for it a decade earlier. The seller told him something really interesting: "Being on the other side of it now and having as much wealth as I do, you start to realize the last few hundred thousand dollars don't matter." Sometimes people just want an easy deal with somebody they know is going to close.

Here are the most common types of tired sellers you'll come across when looking for off market properties:

Operationally exhausted owners. Commercial real estate investing is not easy. Everybody thinks it's completely passive, and it can be to a certain extent, but you need the right systems and processes. If you've always self-managed, you're going to be worn out by the day-to-day. I personally have a property management team because I can't stand the management side of things.

Estate and inheritance situations. When someone passes away and hands a property off to their family, that family typically doesn't want to deal with it or doesn't understand how commercial real estate works. They want the money, not the investment. The family might want to sell quietly and just divvy up the proceeds. This is why approaching estate planning attorneys can be a great strategy. There's a property I've been looking at where the owner passed away over a year ago. I've reached out to the estate planning attorney a couple of times to say, "Hey, I'm very interested. If the family doesn't want to take it to market, bring it to me. I'll pay fair market value and cover the closing costs." For the attorney to be able to tell the family they can save 6 or 7% on commissions? That's a pretty good deal for everyone.

Aging out with no succession. This doesn't always mean they don't have kids. It could mean the next generation doesn't want to run it. Maybe they have no kids at all and want to sell and give the money to charity. I've also seen sellers with two or three kids who know the portfolio doesn't divide up easily, so they'd rather sell and give their kids cash than deal with the infighting.

Lane 3: Direct Outreach (My Favorite Way to Find Off Market Properties)

This is my favorite approach and I think it's the most overlooked strategy in commercial real estate. Everyone and their grandmother is sending out mailers in residential real estate. The texts, the phone calls, the hard mailers are insane. But in the eight years I've been investing in commercial real estate, I can think of maybe two times I've received actual direct mail from somebody trying to buy one of my properties off market. Two times. That tells you how much opportunity there is.

Here's how to do it right:

Pick one asset class. Get specific. RV parks, flex space, neighborhood retail, industrial real estate, whatever it is. That doesn't mean you can't invest in other types, but when you're doing direct outreach, have one investment thesis and one focus.

Pick one market. It should be a market you can drive to in maybe 90 minutes. For me, it's literally a 15-minute radius. All of my properties are within a 15-minute radius of where I live. I'm lazy, man. I don't want to drive across the river here in Nashville to check on my properties. You want to talk about building the right lifestyle? Go invest within a 15-minute radius of where you live.

Pull the ownership list. You can go to the county records and get this stuff for free. Go to the county and say, "I want a list of all the property owners who own this type of real estate in these zip codes, and they've owned it for seven years or more." You can download it. Every county typically has some sort of tax database or GIS records. You may have to go down to the courthouse, but there is a way for you to pull this for free.

Start the conversation. Send out the letters, make the calls, do the drive-bys. At any given time, about 5% of those owners are willing to consider something. So if you send mail to a thousand owners, that's 50 properties willing to entertain a conversation. Not all of them will be at a reasonable price, but that's 50 opportunities.

The nice thing about commercial real estate is that every single deal, regardless of whether it's hidden in an LLC, is going to have a mailing address in the tax records. That's where tax bills get sent, utility bills, everything. So if you're sending mail to the mailing address, chances are it's going to a decision maker. Hand address it and it's going to look very important. That's a sniper approach, not a shotgun approach, but it works.

"I used to send 50 mailers a week because I'd do 10 a day. Print them, hand sign them, hand address them, stamp them, drop them in the mailbox. It doesn't take that much time. Maybe 30 minutes. And absolutely worth it if you find one deal that could make you a couple hundred thousand dollars."

- Tyler Cauble

I bought a great deal back in 2021 off a mailer we sent out. It took probably 45 to 60 days for the seller to call us back, and we closed within three months. Patience is a virtue with direct outreach.

Real-world example: We have a member of our CRE Accelerator mastermind right now working on an RV park she sourced entirely through direct outreach. She's buying it for $1.5 million, and by the time she's done repositioning it and implementing her operations, it's going to be worth over $5 million. She picked the asset class (RV parks), picked a region (the Southeast), and made the call directly. No broker, no intermediary. She found a tired seller who doesn't want to operate a modern RV park anymore. That combination of direct outreach and a tired seller is where the real magic happens in off market deals.

Are You Actually Ready for Off Market Deals?

This approach is absolutely right for you if you have capital ready to deploy (or at least have access to it through a line of credit or banking relationships), you've closed one or two deals (even as a minority partner), you can wait 90 or more days for the right opportunity, and you're able to talk to owners directly and speak intelligently about what you want to do.

This is not for you if you need your first deal in the next 30 days. That's not going to happen. If anybody tells you that you can get rich quickly in commercial real estate, they're lying. This is a marathon, not a sprint. You can build a tremendous amount of wealth if you buy your first commercial property the right way and keep going from there.

If you don't have capital lined up, you're going to get presented an opportunity and not be able to take advantage of it, and you'll probably never get a second chance. If you're still trying to pick an asset class, you're not ready yet. You need that dialed in so you know exactly what you're doing the moment an opportunity arises.

Off market is not harder. In my opinion, finding and negotiating and closing off market real estate deals is substantially easier than on-market because you're not competing against hundreds if not thousands of other people. It's just a different approach and you have to know how to go about doing it.

The best deals are not hidden. You're just not in the room where they're happening. So fight to get on that list, approach owners directly, and start sending those mailers. Send 10 a week, 20, 30. I used to send 50 a week. You're going to get about a 1% response rate, so send out a few thousand before you decide it doesn't work. It does. I've proven it.

Key Takeaways

Off market doesn't mean hidden. The best deals are actively marketed, just to a select list of 5 to 100 buyers. Getting on that list is the real game.

Listed deals have built-in disadvantages. Bid compression, adverse selection, and the marketing tax all eat into your returns before you ever start.

Three lanes to find off market properties. Get on broker preview lists, identify tired sellers, and run direct outreach campaigns. Ideally you're working all three.

Give brokers feedback. If a broker sends you a deal and you ghost them, you're getting removed from the list. Tell them why it doesn't work so they can send you better deals.

Direct mail is wildly underused in CRE. In eight years of investing, I've received direct outreach maybe twice. That's your opportunity. Send 50 mailers a week and be patient.

Have capital ready and an asset class picked. Off market deals move fast. If you're not ready when the opportunity shows up, you won't get a second chance.

This article is based on an episode of Office Hours, my weekly live show on the Tyler Cauble YouTube channel where I break down commercial real estate strategies and answer your questions live every Tuesday at 8:30 a.m. CST.

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About Tyler Cauble

Tyler Cauble is a commercial real estate broker, investor, and developer based in Nashville, Tennessee. As the founder of The Cauble Group, he has acquired over 2 million square feet of industrial, retail, and office properties. Tyler is the author of Open for Business: The Insider's Guide to Leasing Commercial Real Estate and the host of the Commercial Real Estate Investor podcast. Through his CRE Accelerator mastermind at CRECentral.com, he coaches investors at every stage of their commercial real estate journey.

Reverse 1031 Exchange: How to Buy Your Replacement Property Before You Sell

If you've ever found the perfect commercial real estate investing opportunity but couldn't pull the trigger because your current property hasn't sold yet, you're going to want to hear this. There's a strategy that most investors don't even know exists, one that lets you lock up your replacement property before you close on your sale. It's called a reverse 1031 exchange, and it completely changes the game.

I've been in commercial real estate since 2013, and I can tell you that timing is one of the biggest killers of good deals. You find a property you love, the numbers work, but you haven't sold your existing asset yet. In a traditional 1031 exchange, you sell first and then have 45 days to identify and 180 days to close on your replacement property. But what happens when you find the perfect deal before you've sold? That's where the reverse 1031 exchange comes in. Let's break it down.

What Is a Reverse 1031 Exchange?

A reverse 1031 exchange is exactly what it sounds like: the traditional 1031 exchange, but flipped. Instead of selling your property first and then buying the replacement, you acquire the replacement property first and then sell your existing property afterward. You still get all the same tax deferral benefits, you just do it in the opposite order.

The IRS established the rules for this under Revenue Procedure 2000-37, which introduced what's known as a "parking arrangement." Here's the key concept: since you can't hold title to both the old property (the "relinquished property") and the new property (the "replacement property") at the same time during an exchange, a third party called an Exchange Accommodation Titleholder (EAT) temporarily "parks" the new property until you're ready to complete the exchange.

Think of it this way. You find a property you want to buy. The EAT acquires it and holds it on your behalf while you go sell your current property. Once the sale closes, the exchange is completed and the replacement property transfers to you. The IRS is happy because at no point did you personally own both properties simultaneously.

Reverse 1031 Exchange: By the Numbers

180

Days to Complete Exchange

45

Day Identification Period

100%

Tax Deferral (if done right)

$5K-$10K+

Typical Additional Cost

How the Reverse 1031 Exchange Works Step by Step

The reverse 1031 exchange involves more moving pieces than a standard exchange, but once you understand the structure, it's not as complicated as it sounds. Here's how it plays out in the real world.

Step 1: You find the replacement property. You locate a property you want to acquire, but you haven't sold your current investment yet. Maybe the deal is too good to pass up, or maybe the market timing just isn't lining up. Either way, you need to move now.

Step 2: You engage a 1031 exchange qualified intermediary and an EAT. Before anything happens, you need two key players in place. The 1031 exchange qualified intermediary handles the exchange documentation and ensures IRS compliance. The Exchange Accommodation Titleholder (EAT) is the entity that will actually take title to the replacement property and hold it for you.

Step 3: The EAT acquires the replacement property. Using funds you provide (or that you've arranged financing for), the EAT purchases the replacement property and "parks" it. The EAT holds legal title, but you typically manage the property day-to-day. You can even lease it out during this parking period.

Step 4: You sell your relinquished property. Now you go sell your current property. The sale proceeds go through the qualified intermediary, just like a traditional exchange. You have up to 180 days from the date the EAT acquired the replacement property to get this done.

Step 5: The exchange is completed. Once your sale closes, the qualified intermediary uses the proceeds to "purchase" the replacement property from the EAT, and title transfers to you. The exchange is complete, and your capital gains taxes are deferred.

"The reverse 1031 exchange lets you stop losing deals because of timing. You don't have to watch the perfect property slip away while you wait for your current one to sell."

- Tyler Cauble

The 1031 Exchange Timeline You Need to Know

Whether you're doing a forward or reverse 1031 exchange, the 1031 exchange timeline is critical. Miss a deadline and the entire exchange fails, meaning you're on the hook for capital gains taxes. Here are the key dates you cannot afford to miss.

The 45-day identification period. In a reverse exchange, this clock starts the day the EAT acquires the replacement property. Within those 45 days, you must formally identify the relinquished property (the one you're going to sell). In most cases, you already know which property you're selling, so this part is usually straightforward. The 1031 exchange identification period rules still apply: you can identify up to three properties under the Three-Property Rule, or any number of properties as long as their combined value doesn't exceed 200% of the replacement property's value.

The 180-day exchange period. From the day the EAT acquires the replacement property, you have exactly 180 calendar days to complete the entire exchange. That means selling your relinquished property and closing the exchange within that window. No extensions, no exceptions. This is why you want to have your relinquished property market-ready before you even start the process.

Here's a pro tip that I tell every investor I work with: start marketing your relinquished property before or at the same time the EAT acquires the replacement. You don't want to burn 60 days getting your property ready to list when you only have 180 days total. If you're looking at how to analyze commercial real estate deals in the context of an exchange, always factor in a realistic timeline for the sale of your existing asset.

When Should You Use a Reverse 1031 Exchange?

Not every exchange needs to be a reverse exchange. In fact, the traditional forward exchange is simpler, cheaper, and should be your default whenever the timing works out. But there are specific situations where the reverse exchange is the right move.

You find a deal you can't pass up. This is the most common scenario. The commercial real estate market doesn't wait for you. If you find a property that checks every box, maybe it's a value-add real estate investing opportunity with below-market rents and upside potential, you don't want to lose it because you haven't sold your current asset yet.

Your relinquished property needs more time to sell. Maybe you own a specialized property, something like a single-tenant industrial building or a niche retail space, that's going to take longer to find the right buyer. A reverse exchange gives you the flexibility to secure your replacement property now and take the time you need (up to 180 days) to sell.

Market conditions favor buying now. If you're seeing interest rates drop, cap rates compress, or inventory tighten in the market where you want to buy, it might make sense to lock in the acquisition and worry about selling later. The cost of the reverse exchange structure could be far less than the price increase you'd face by waiting.

You want negotiating leverage. When you're not under the gun to buy within a 45-day identification window, you negotiate differently. With a reverse exchange, you've already secured the replacement property. You can negotiate the sale of your relinquished property from a position of strength rather than desperation. If you're new to this world and wondering how to buy your first commercial property, understanding these strategies puts you way ahead of the curve.

Costs and Risks to Watch Out For

I'll be upfront with you: a reverse 1031 exchange costs more than a traditional exchange. You're paying for additional legal work, the EAT's services, and potentially the carrying costs of the replacement property while it's being parked. Typical additional costs range from $5,000 to $10,000 or more, depending on the complexity of the deal and the value of the properties involved.

But here's how I think about it. If you're deferring $100,000, $200,000, or more in capital gains taxes, spending an extra $5K-$10K on the exchange structure is a no-brainer. That's a fraction of a percent of the tax savings. The math isn't even close. Understanding your commercial real estate tax benefits is essential here, because the deferral is almost always worth the added cost.

That said, there are real risks to be aware of.

The 180-day deadline is non-negotiable. If you can't sell your relinquished property within 180 days, the exchange fails. You'll end up owning two properties and paying capital gains taxes on the sale whenever it does happen. Before you start a reverse exchange, be realistic about how quickly your property will sell.

Financing can be tricky. Not all lenders are familiar with reverse exchanges, and the EAT ownership structure can complicate mortgage applications. You may need to provide additional documentation or work with a lender who has experience with these transactions. Some investors use bridge loans or cash to acquire the replacement property and then refinance after the exchange is complete.

You need the right team. A reverse 1031 exchange is not a DIY project. You need an experienced 1031 exchange qualified intermediary, a tax advisor who understands the nuances, and potentially a real estate attorney. I'd also recommend running the numbers through a deal analyzer, you can check out our commercial calculators to get started. The upfront investment in professional guidance will save you from costly mistakes.

And don't forget about cost segregation once you acquire your replacement property. Pairing a 1031 exchange with a cost segregation study on the new asset is one of the most powerful tax strategies in commercial real estate. You're deferring the gains from the sale and accelerating accumulated depreciation on the new property at the same time.

"The investors who build real wealth aren't the ones who avoid complexity. They're the ones who learn the strategies that most people skip over because they seem too complicated. A reverse 1031 exchange is one of those strategies."

- Tyler Cauble

Key Takeaways

A reverse 1031 exchange lets you buy first and sell second. Instead of scrambling to find a replacement property after your sale, you lock up the deal you want and then sell your existing asset.

An Exchange Accommodation Titleholder (EAT) parks the property for you. The EAT holds title to the replacement property while you sell your relinquished property, keeping the exchange IRS-compliant.

You still have the same 45-day and 180-day deadlines. The 1031 exchange timeline doesn't change just because you're doing it in reverse. Plan your sale timeline before you start.

It costs more, but the tax savings almost always outweigh the cost. Expect $5K-$10K+ in additional fees for the EAT and added legal complexity, a fraction of the capital gains you'll defer.

Stack it with cost segregation for maximum tax benefit. Pairing a 1031 exchange with a cost seg study on the replacement property is one of the most powerful wealth-building moves in commercial real estate.

Watch the full breakdown in my video above where I walk through the reverse 1031 exchange strategy in detail, including real-world scenarios where this approach makes the most sense for commercial real estate investors.

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How to Buy Commercial Property: My First Deal at 25 (The Full Story)

You've been looking at commercial real estate for a year, maybe longer, running numbers and watching videos, waiting to feel ready. And nothing's happening. I did that, too, for 18 months. Then, in February of 2019, I wired $575,000 to a title company and closed on my first commercial property, a former community bank in a Nashville suburb that two different buyers had already walked away from.

For the next year, I questioned whether I had just made the biggest mistake of my life.

Today, I'm going to show you exactly how that deal worked. The real numbers, the two-offer negotiation that got me $175,000 off the list price, the $20,000 mistake that hit me two months after closing, and the one thing that actually separates people who buy their first commercial property from people who just keep looking at them. It's not capital. It's not market knowledge. It's not even finding the right deal. It's something else entirely.

Who I Am and Why This Story Matters

I'm Tyler Cauble. I've been in commercial real estate investing since 2013, but I didn't actually start investing until 2019, after founding my own commercial brokerage here in Nashville. Since then, I've acquired over 2 million square feet of industrial, retail, and office properties, developed a 42-unit townhome community, and built a boutique hotel called Salt Ranch.

But in 2019? I was a 25-year-old broker. There's a reason they call them brokers, because they're broke. I had commission checks, not a cash pile. And the story I'm about to tell you is the deal that changed everything for me. Not because it was perfect, but because it was real, messy, stressful, and ultimately the best financial decision I've ever made.

If you're a beginner looking at how to buy commercial real estate, this is the unfiltered version. No hypothetical spreadsheets. Just the actual deal.

How I Actually Found the Building

1100 Old Hickory Blvd exterior - Tyler Cauble's first commercial property

1100 Old Hickory Blvd, Old Hickory, Tennessee. The former bank building I purchased for $575,000.

Here's the part that still makes me smile. I didn't find this deal on LoopNet. I didn't cold call the owner. I didn't drive a farm area for six months until I got lucky. I actually had the building on my own listing board.

Remember those two buyers who walked away? They were my buyers. I was the broker who brought them to this building. Both of them went under contract, and both of those deals fell apart in due diligence. The first client walked because they couldn't get their funding together. The second walked for the same reason.

And each time the deal fell through, the seller got a little more nervous. The property sat for a little longer. The list price of $750,000 started to feel a little less defensible. By the time the second contract died, I'd been staring at this building for half a year. I knew the building. I knew the market. I knew the seller's situation. And most importantly, I knew the deal was there if someone could actually close it.

This is how a lot of first-time buyers find deals, by the way. They don't stumble onto some off-market unicorn. They stay close to the market, pay attention to what's sitting, and recognize when a motivated seller is running out of patience. If you're actively looking for deals, I wrote a whole guide on how to find commercial real estate deals that breaks down exactly where to look.

The Two-Offer Negotiation That Saved Me $175,000

I didn't just submit an offer. I submitted two. Same buyer, same property, two options for the seller to pick from.

Option One: $650,000. Standard contract, financing contingency, inspection contingency, 30-day due diligence period. On paper, the bigger number.

Option Two: $575,000. No contingencies. No financing out. No inspection out. Close in 60 days. Clean as a whistle.

Think about what that does to a seller who has already watched two deals blow up in due diligence. On paper, $650,000 is the bigger number. But a seller who's seen two contracts die isn't necessarily seeing the bigger number anymore. They're seeing another buyer who might walk away in three weeks. They're seeing uncertainty.

The $575,000 offer? Uncertainty goes to zero. Money is money. Time is time. And a closed deal in 60 days beats a maybe deal in 90.

"When you're buying with enough information, the no-contingency offer is one of the most powerful tools in commercial real estate."

- Tyler Cauble

The seller took Option Two. I saved $175,000 off the list price because I understood the seller's pain better than anyone else in the market. That's what commercial real estate underwriting is really about: not just running numbers on a spreadsheet, but understanding the human being on the other side of the transaction.

The Real Numbers and How I Structured the Capital Stack

The Deal by the Numbers

$750K

List Price

$575K

Closing Price

$97/SF

Price Per Foot

$740K

Exit Value

Interior of 1100 Old Hickory Blvd after renovation

The renovated interior of 1100 Old Hickory. This was a former bank that needed creative build-out to attract tenants.

Here's how I actually paid for a $575,000 building at 25 years old with commission checks and not much else.

I financed it conventionally at about 80% loan-to-value. The bank gave me $460,000 and I needed to bring roughly $115,000 in down payment plus closing costs. The only problem: I didn't have anywhere near $115,000 in my bank account.

So here's how I closed it:

$460,000: conventional bank loan at 80% LTV. Standard commercial mortgage.

$100,000: investor equity from two investors at $50,000 each. One was a friend, one was a client I'd been working with and building trust over a couple of years. Both wrote me checks because I had already shown them I knew this specific building, this specific market, and this specific deal inside and out. I wasn't pitching a business plan. I was pitching a building they could drive to and touch.

$125,000: line of credit. This is the piece most people don't talk about. I had a line of credit that I could draw on for the remaining gap plus working capital. The LOC is the secret weapon of early commercial investors. It covers the gaps that your proforma didn't plan for, and trust me, there will be gaps.

~$18,000: my own money. That was the check I wrote at the closing table, and at 25 it was the biggest check I'd ever written by a factor of probably four. Between the investors and my $18K, we had the down payment covered.

If you're wondering how to structure something like this, I break it all down in my post on how to buy your first commercial property. And if capital is your biggest hurdle, take a look at buying commercial real estate with no money down for creative financing strategies.

The Three Mistakes That Almost Broke Me

This is where the story gets honest. I made three mistakes on this deal, and every single one of them cost me real money.

Mistake #1: I didn't scope the HVAC. Two months after closing, one of the HVAC units died. That was a $20,000 replacement I hadn't budgeted for. If I had scoped the mechanicals properly before closing, I could have either negotiated a credit from the seller or adjusted the purchase price. Instead, it came straight out of my pocket. Lesson: always, always get a full mechanical inspection, even if you're waiving your inspection contingency. Know what you're buying.

Mistake #2: I underestimated vacancy carry. Both suites were vacant at close. I'd built my proforma assuming I'd have a tenant signed within about 180 days and paying rent that year. In reality, it took us nearly a full year to get those suites leased. Market rent was there. Demand was there. But the space was a former bank, it was kind of wonky, it needed some buildout, and good tenants take their time. Every extra month of vacancy is debt service, utilities, and insurance coming straight out of your pocket. Lesson: double your vacancy assumptions. If you think it'll take 3 months to lease up, model 6. If your deal still works with 6 months of vacancy on every empty suite, you've got a real deal.

Mistake #3: My proforma was too optimistic. This is the big one. I assumed best-case rents, best-case lease-up timing, and best-case expenses. Every number in my model was the good scenario. And when reality hit, every single line item was a little worse than projected, and those little misses compound fast. Lesson: stress test everything. Run worst-case scenarios on your deal analysis. If your deal only works in the best case, it's not a deal, it's a gamble.

The Part Nobody Tells You About Your First Deal

I'm not being dramatic here. In the first six months after I closed, and definitely the night before, I did not sleep well. I'd wake up at 2 a.m. thinking about the roof. Thinking about the HVAC unit I just had to replace and hoping it wouldn't go out again. Thinking about whether I overpaid. Thinking about the $100,000 I owed to investors I'd never taken on capital from before.

That feeling doesn't go away just because you read another book or listen to another podcast.

It goes away because you see the building deposit the rent check month after month. You see the vacant suite lease up. You see the line of credit balance starting to come down. You see the appraisal come in substantially higher than what you paid. And then you sit there after about 12 months and realize: oh, this kind of actually works. I like it.

And then you want to go do it again. In fact, that year I bought three more buildings just because I bought that one.

"Your first deal doesn't have to make you rich. It doesn't have to get you a 30% IRR. It has to prove to you and your own brain that you can own commercial real estate and not have everything blow up."

- Tyler Cauble

The Exit: $575,000 In, $740,000 Out

Entrance to 1100 Old Hickory Blvd commercial property

The building that turned $575,000 into $740,000 in about two years.

A couple years in, one of my partners committed a massive amount of fraud. I didn't want the asset locked up in an FBI investigation for years. So I went to my largest tenant and told them they should buy the building and owner occupy it. They could get an SBA loan at a rate I couldn't touch, and they were willing to pay me real money for the space they'd been renting. In fact, their mortgage was almost equivalent to the rent they were paying me.

So we sold the building to the tenant for roughly $740,000. Do the math: $575,000 all in, $740,000 out, plus two years of operating income. The investors got their 8% return paid out over a two-month disbursement window. Everyone got what they were promised, and I walked away with enough capital and enough confidence to go buy the next one.

But the real return wasn't financial. It was the three buildings I bought that same year just because I had the confidence from closing on that first one. That's the moment. That's the only thing your first deal actually has to do for you. It doesn't have to make you rich. It has to prove to you and your own brain that you can own commercial real estate and not have everything blow up.

The One Thing That Actually Matters

Here's what I know after doing this for years now. The one thing that separates people who actually buy their first commercial property investment from people who spend years just looking at them is not capital, not market knowledge, and not finding the perfect deal.

It's the willingness to act before you feel ready.

I wasn't ready when I wired that $575,000. I was terrified. I'd never owned a commercial building. I'd never raised investor capital. I'd never managed a property that big. But I had done enough homework on that specific deal that I could make a decision, even if it scared me.

Your first deal doesn't have to be perfect. It doesn't have to be the deal of the century. It has to be the deal that gets you off the sidelines.

If you've been watching videos and running numbers for months (or years) and you still feel like you're not ready, I get it. That's exactly where I was. But "ready" doesn't come from more analysis. It comes from doing the thing. And the sooner you do the thing, the sooner you realize that the fear was always bigger than the reality.

If you want a roadmap, start with my guide on how to buy your first commercial property. It walks through the full process step by step, including the parts I had to learn the hard way.

Key Takeaways

The two-offer strategy is powerful. Giving a motivated seller a clean, no-contingency option alongside a higher-priced contingent offer lets them choose certainty. I saved $175,000 this way.

Creative capital stacks make deals possible. Bank loan, investor equity, a line of credit, and personal capital. You don't need $575,000 in your bank account to buy a $575,000 building.

Always scope the mechanicals. A $20,000 HVAC surprise two months after closing is money you'll never get back. Inspect everything, even if you're waiving contingencies.

Double your vacancy assumptions. If you think it'll take 3 months to lease, model 6. If your deal still works, it's a real deal.

Stress test your proforma. Best-case numbers are fantasies. Run worst-case scenarios and make sure you can survive them.

Your first deal just has to prove it works. $575,000 in, $740,000 out, three more buildings that same year. The confidence is the real return.

Watch the full video above where I walk through every detail of this deal, including the sleepless nights, the actual closing documents mindset, and the exact moment I knew commercial real estate was going to change my life.

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What Is a Master Lease in Commercial Real Estate (And How I'm Using One to Build 43,000 SF of Flex Space)

I'm building 43,350 square feet of flex space for about $2 million. The going rate to build that from the ground up? Somewhere between $6 and $8 million. And I didn't have to buy a single acre of land to do it.

The structure that makes this possible is called a master lease, and it's one of the most underutilized strategies in commercial real estate investing. A master lease in commercial real estate lets you control a property without owning it. You sign a long-term lease with the building owner, renovate the space, and sublease it to tenants at market rates. You keep the spread between what you pay and what you collect.

I'm going to walk you through exactly how I'm using this strategy on my Peerless Mill Warespace deal, why the numbers work so well, and what risks you need to watch out for before you try this yourself.

The Peerless Mill Warespace Deal at a Glance

43,350 SF

Flex Space

$2M

Total Cost

$637K

Year 1 Tax Savings

20 yrs

Hold Period

Why Ground-Up Construction Doesn't Work for Most Investors

Let's start with what most people think they need to do when they want to build flex or industrial space: buy land, hire an architect, get permits, pour a foundation, and build from scratch. That process costs somewhere between $6 and $8 million for the kind of square footage I'm building. And that's if everything goes right.

Here's the thing. Ground-up construction forces you to absorb every possible risk up front. You're buying the land before you have a single tenant. You're spending 18 to 30 months in construction before a dollar of revenue comes in. You're dealing with cost overruns, supply chain delays, permitting headaches, and the constant possibility that the market shifts before you deliver the finished product.

GROUND-UP BUILD VS. MASTER LEASE

  Ground-Up Master Lease
Total Cost $6–8M $2–2.5M
Land Purchase Required None
Time to Revenue 18–30 months 3–6 months
Construction Risk Full exposure Interior only
Upfront Risk All capital at risk Buildout capital only

For most investors, especially those just learning how to get into commercial real estate investing, that risk profile is a dealbreaker. You need deep pockets, a tolerance for construction chaos, and enough runway to survive almost two years without cash flow. That's a tough ask even for experienced operators.

So I asked myself a simple question: what if I could skip the land purchase entirely and go straight to the buildout?

What Is a Master Lease in Commercial Real Estate

A master lease in commercial real estate is a structure where you sign a long-term lease with a property owner, giving you operational control over the building. You're not buying the property. You're leasing it. But you have the right to renovate, improve, and sublease the space to your own tenants.

Think of it this way: the owner keeps the title. You keep the cash flow. You're essentially running the building as if you own it, but without the purchase price, the mortgage, or the down payment that comes with a traditional acquisition.

"Think of a master lease like renting an entire restaurant space, remodeling the kitchen, hiring the staff, and running the business. The landlord owns the building. You own the operation and the revenue it produces."

Now, this isn't the same as a regular commercial lease. With a standard lease, you occupy the space for your own business. With a master lease, you're stepping into the role of operator. You're the one finding tenants, managing the space, handling the buildout. The property owner becomes more like a silent partner who collects a percentage of what you bring in.

The beauty of this structure is capital efficiency. Instead of spending $2 million on a down payment for a purchase and then another $2 million on construction, all of your capital goes directly into operations and improvements. Every dollar you spend is building the revenue-generating asset.

"A master lease lets you control a commercial property without buying it. Your capital goes to improvements and operations, not to the seller. That's what makes the math work on deals that would otherwise be impossible."

- Tyler Cauble

If you want to understand the fundamentals of evaluating deals like this, check out my guide on how to underwrite commercial real estate. The principles are the same whether you're buying or master leasing. You still need to know your numbers.

The Peerless Mill Deal: 43,350 SF of Flex Space

Let me get specific about the deal I'm working on right now. Peerless Mill is an existing building that has space the owner isn't fully utilizing. I signed a master lease on 43,350 square feet, and I'm converting it into flex industrial space under the Warespace brand.

Deal Structure at a Glance

RENT TO OWNER

10% of Revenue

FIXED MONTHLY RENT

$0 Until Leased

BUILDOUT COST

$2 – $2.5M

HOLD PERIOD

20 Years

That means from day one, the landlord gets paid when I get paid. There are no fixed monthly rent payments hanging over my head before I've leased a single unit. The rent structure is entirely revenue-based, which means I have zero obligation until money is actually coming in the door.

Compare the $2 to $2.5 million buildout to the $6 to $8 million it would cost to build the same amount of flex space from scratch. I'm saving millions because the shell of the building already exists. I don't need to buy land, pour foundations, or erect walls. I'm doing interior buildout: demising walls, roll-up doors, electrical, HVAC, and the finishes that make the space leasable.

"Because my basis in the deal is so much lower than a ground-up build, my return on invested capital is dramatically higher. Every dollar goes into improvements that generate revenue, not into land that just sits there during construction."

- Tyler Cauble

This is a value-add strategy at its core. I'm taking underutilized space, investing in targeted improvements, and repositioning it at market rents. But the master lease structure means I'm doing it with a fraction of the capital that a traditional purchase or development would require.

The Tax Advantage Most Investors Don't Know About

This is where things get really interesting. When you do a master lease and invest in leasehold improvements, you can take advantage of something called the ML Operator tax election. And on this deal, it generates $637,000 in Year 1 tax savings.

How the Tax Savings Break Down

STANDARD DEPRECIATION

39 years

Slow tax recovery

ML OPERATOR ELECTION

Year 1

Accelerated depreciation

TAX SAVINGS

$637K

~1/3 of buildout cost

Here's how it works. The money I spend on building out the space, the demising walls, the HVAC systems, the electrical, all of those leasehold improvements can be depreciated aggressively. We're not talking about the standard 39-year depreciation schedule that commercial buildings usually fall under. Through bonus depreciation and the ML Operator election, I can accelerate the depreciation of those improvements and create a massive tax shield in the first year of operations.

That $637K in tax savings is real money that stays in the deal. It offsets income, reduces my effective cost basis, and improves every return metric on the project. For investors in high tax brackets, this is the kind of benefit that can make or break a deal's attractiveness.

You need a CPA who understands commercial real estate to structure this properly. The tax code around leasehold improvements and accelerated depreciation has specific requirements. But when it's done right, on a deal like this, roughly a third of your total buildout cost comes back through tax benefits.

Where Master Leases Work Best

Flex / Industrial Space. Owners with large buildings that are partially vacant or underutilized. Convert unused square footage into leasable flex units with roll-up doors and individual suites — the fastest-growing niche in industrial real estate right now.

Strip Retail Centers. Aging retail properties where the owner doesn't want to invest in repositioning. You take over operations, renovate, and bring in new tenants.

Warehouse Space. Single-owner warehouses that are sitting empty or partially leased. Subdivide and lease to small businesses, e-commerce operators, and contractors.

Mixed-Use Buildings. Properties with a combination of office, retail, or industrial space where the owner wants hands-off income without selling.

Any Underperforming Asset. If an owner has a building they're not using to its full potential and they're open to a creative deal, a master lease is on the table.

For a deeper look at leasing strategies and how to structure tenant relationships, take a look at my guide on how to lease commercial space.

The Risks You Need to Understand

I'm not going to pretend this is a risk-free strategy. There are real downsides to a master lease, and you need to go in with your eyes open.

You don't own the asset. At the end of your 20-year lease, you walk away. You've built cash flow, you've taken tax benefits, but you don't have a building to sell. That's a fundamentally different wealth-building equation than buying a property and holding it for appreciation. If long-term asset ownership is your primary goal, a master lease won't get you there.

You can't do a 1031 exchange. Because you don't own real property, you can't defer capital gains through a 1031 exchange when the lease ends. The IRS treats a leasehold interest differently than fee simple ownership. So the exit strategy looks different than a traditional purchase and sale.

You're dependent on the landlord. Your entire operation sits on top of someone else's property. If the landlord runs into financial trouble, gets foreclosed on, or decides to be difficult about lease terms, you have exposure. You need a bulletproof lease agreement reviewed by an attorney who specializes in commercial real estate. Your lease is your entire protection.

This is not a beginner deal. A master lease with a $2 million buildout is not your first deal. You need to understand construction management, tenant relations, underwriting, and lease negotiations before you take on something like this. If you're still learning the basics of commercial real estate, start with our walkthrough on how to buy your first commercial property and build your way up. Master leases are a tool for sophisticated operators, not first deals.

But here's the flip side. If you're an experienced operator who knows how to manage construction and lease space, a master lease eliminates the single biggest barrier to entry: the purchase price. You can control a large asset, generate serious cash flow, and take significant tax benefits without writing a check for millions of dollars to a seller.

Key Takeaways

A master lease in commercial real estate lets you control and operate a property without purchasing it. Your capital goes to improvements and operations, not to a down payment.

Ground-up construction for 43,000+ SF costs $6-8 million with 18-30 months before revenue. A master lease cuts the cost to $2-2.5 million and eliminates the land purchase entirely.

Revenue-based rent (10% of revenue to the property owner) means you have no fixed payments until tenants are generating income. The risk is aligned with performance.

The ML Operator tax election can generate massive Year 1 tax savings by accelerating depreciation on leasehold improvements. On this deal, that's $637K back in tax benefits.

The trade-offs are real: no ownership at the end, no 1031 exchange, and dependency on the landlord. This strategy is for sophisticated operators, not first-time investors.

Best use cases include flex/industrial space, strip retail, warehouses, and any building where an owner has underutilized square footage and is open to creative deal structures.

I'm documenting the entire Peerless Mill Warespace buildout as it happens, from lease negotiations to construction to first tenants. If you want to follow along and see how this deal plays out in real time, subscribe to the Tyler Cauble YouTube channel where I'm breaking down every step of the process.

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Graham Stephan Just Made the Case for Commercial Real Estate (And He Doesn't Even Know It)

Graham Stephan just announced he's selling all of his rental properties in Los Angeles. Every single one. And honestly? I don't blame him. But here's what kills me. Graham is one of the smartest real estate creators on the internet, and he's about to walk away from the entire asset class because of problems that only exist in residential real estate. Every complaint he made in that video — the garbage returns, the constant headaches, the regulatory nightmare, all of it — disappears when you step into commercial real estate. He essentially made the perfect case for commercial real estate vs residential, and he doesn't even realize it.

I watched that video and took notes, because almost every single frustration Graham described is something I solved years ago by switching to commercial. So let's break this down piece by piece.

Commercial vs Residential: By the Numbers

4-5%

Graham's Returns

$0

Maintenance Under NNN

3 yrs

LA Eviction Moratorium

8-12%+

Commercial Returns

Why Graham Stephan Is Selling Everything

If you haven't seen the video, here's the short version. Graham has been a residential real estate investor in Los Angeles for years. He built a portfolio of rental properties, documented the whole journey on YouTube, and became one of the biggest personal finance creators on the platform. Now he's liquidating all of it.

His reasons? The returns are terrible. He's pulling 4-5% on his equity, which barely keeps pace with a Treasury bond. He told a story about needing a $400 permit just to replace a $500 fence. And then there's the constant "background noise," his words, not mine. The texts from tenants, the maintenance calls, the city inspectors showing up over nonsense. He's fed up. And California's regulatory environment has been the cherry on top. Eviction moratoriums that let tenants stay for three years without paying. Hostile permitting processes. The whole system working against landlords.

So Graham's plan is to sell everything and park the money in Treasury bonds and index funds. Safe, passive, done. And look, I get it. If residential real estate in LA is the only version of real estate you've ever known, walking away makes total sense. But that's not the only version.

The Real Problem With Residential Real Estate

Here's what I need everyone to understand. Graham didn't discover a problem with real estate. He discovered a problem with residential real estate. There's a massive difference, and the commercial real estate vs residential debate is one I've been having for my entire career.

Residential real estate, especially in high-cost markets like LA, has been broken for a long time. The numbers don't work. When you're buying properties at a 3-4 cap rate and your financing costs are in the same range, you're basically working for free. You're betting entirely on appreciation, and you're absorbing all the risk and headaches in the meantime. That's not investing. That's speculation with a side of property management.

The 4-5% return on equity that Graham described isn't a ceiling for real estate. It's a diagnostic. It tells you that the residential asset class, in that market, at those prices, is fundamentally broken as an income investment. I've been saying this for years. If you want to learn how to actually analyze whether a deal makes money, check out my guide on how to underwrite commercial real estate. The math is completely different.

And that $400 permit for a $500 fence? That story perfectly captures the absurdity of being a small residential landlord. You're dealing with city bureaucracy, inspectors, permits, all for a fence. I've dealt with building inspectors and city processes myself, so I know how frustrating it can be. But in commercial, particularly with NNN leases, that's not your problem anymore. Your tenant handles it. All of it.

How NNN Leases Eliminate the Background Noise

Graham used the phrase "background noise" to describe what it's like being a residential landlord. The constant drip of texts, calls, and small emergencies that never fully stop. It's not catastrophic. It's just always there, eating away at your time and your sanity. I think every residential landlord on the planet felt that one in their bones.

But here's the thing. That background noise is not an inherent feature of real estate. It's an inherent feature of residential real estate. In commercial, we have a lease structure called Triple Net, or NNN, that permanently eliminates this problem.

Under a NNN lease, the tenant is responsible for property taxes, insurance, and all maintenance. The roof leaks? Tenant's problem. The parking lot needs resurfacing? Tenant's problem. The HVAC goes out on a Saturday night? You guessed it. You, as the landlord, collect rent. Period. That's it. No texts at midnight about a broken toilet. No $400 permits for a $500 fence. No background noise whatsoever.

"The difference between residential and commercial real estate isn't just the returns. It's the entire operating model. With a NNN lease, you're not a landlord managing a property. You're an investor collecting a check. That's the version of real estate Graham never got to experience."

- Tyler Cauble

Now compare that to what Graham was doing. He was managing residential tenants, fielding every maintenance request personally, dealing with city permitting for minor repairs, and earning 4-5% for the privilege. That's not passive income. That's a part-time job with terrible pay. Commercial real estate with NNN leases is what passive income was supposed to look like all along.

What the NNN Tenant Covers

Property Taxes. Passed through to the tenant, adjusted annually.

Building Insurance. Tenant carries the policy and pays the premiums.

All Maintenance and Repairs. Roof, HVAC, plumbing, parking lot, everything.

Capital Expenditures. Major repairs and replacements are tenant responsibility.

Permitting and Compliance. No more $400 permits for a $500 fence.

Common Area Maintenance. Landscaping, snow removal, exterior upkeep.

Why California's Regulatory Nightmare Doesn't Apply to Commercial

One of Graham's biggest frustrations is California's regulatory environment, and he's 100% right to be frustrated. The eviction moratoriums during COVID allowed residential tenants to stop paying rent for nearly three years with zero consequences. Three years. Imagine owning a property, paying the mortgage, paying the taxes, paying the insurance, and your tenant just doesn't pay. For three years. And the government says you can't do anything about it.

That's insane. And it's also almost entirely a residential problem.

Commercial tenants are businesses. They have reputations to protect, contracts to honor, and credit on the line. They don't get the same protections that residential tenants get under these moratoriums. If a commercial tenant stops paying rent, you have legal remedies that actually work. You can enforce your lease. The playing field is fundamentally different because commercial lease law treats both parties as sophisticated business entities, not as a landlord-versus-vulnerable-tenant dynamic.

And the permitting headaches? In commercial, especially with NNN leases, the tenant is typically the one pulling permits for their own buildout and improvements. You're not the one standing at the city counter arguing about a fence. Your tenant's contractor is. It's a completely different experience. If you want to understand how to get started with this kind of investing, I put together a full walkthrough on how to get into commercial real estate investing.

So when Graham says California has made it impossible to be a landlord, what he really means is California has made it impossible to be a residential landlord. And yeah, he's right about that. But commercial is a different world with different rules, different tenants, and different outcomes.

The Third Option Nobody's Talking About

Graham framed his decision as binary. Either keep struggling with residential rentals that earn 4-5% and drive you crazy, or sell everything and buy Treasury bonds. And in that framing, selling makes sense. But there's a third option he never mentioned, and it's the one I've built my entire career around.

Commercial real estate.

Instead of dumping millions into Treasury bonds at 4-5%, Graham could 1031 exchange those properties into commercial assets. No capital gains tax on the swap. And suddenly, instead of earning the same 4-5% with zero growth potential and zero tax benefits, he's looking at 8-12%+ cash-on-cash returns with built-in rent escalations, depreciation benefits, and actual equity upside.

Think about what that looks like in practice. A well-located commercial property with a strong NNN tenant generates steady, predictable income. No maintenance calls. No permit headaches. No tenant drama. Rent bumps built into the lease so your income grows every year. And if you buy right, you're also building equity as the property appreciates and your loan pays down.

That's the version of real estate that actually delivers what everyone thinks real estate is supposed to deliver. Passive income, wealth building, and freedom. Not the residential grind that burned Graham out. If this sounds like what you've been looking for, I'd encourage you to check out the concept of value-add investing over chasing pure cashflow. It's how I think about every deal. And if you've never owned a commercial asset, my step-by-step walkthrough on how to buy your first commercial property covers everything from finding the deal to closing day.

Now, I'm not saying commercial real estate is risk-free. Nothing is. You still need to underwrite deals properly, understand your market, and structure your leases correctly. But the fundamental problems that made Graham quit, the lousy returns, the constant headaches, the hostile regulations, those problems don't exist in commercial the way they do in residential. It's not even close.

Key Takeaways

Graham's 4-5% returns are a residential problem, not a real estate problem. Commercial properties routinely deliver 8-12%+ cash-on-cash returns with significantly less hassle. The yield ceiling he hit doesn't exist in commercial.

NNN leases eliminate the "background noise" entirely. When your tenant pays property taxes, insurance, and all maintenance, you're not a landlord anymore. You're an investor. No midnight texts. No $400 permits.

California's regulatory nightmare is primarily a residential issue. Commercial tenants are businesses. They don't benefit from eviction moratoriums, and commercial lease law treats both parties as sophisticated entities.

There's a third option beyond "keep struggling" or "sell everything." A 1031 exchange into commercial real estate preserves your capital, eliminates your headaches, and dramatically improves your returns.

Don't let one bad asset class turn you off to all of real estate. Graham's frustrations are valid, but they're specific to residential. Commercial real estate is a completely different game with different rules, different tenants, and much better outcomes.

I break down deals, lease structures, and real-world investing strategies every week on my YouTube channel. If you're someone who's been thinking about real estate but got scared off by residential horror stories like Graham's, come see what commercial looks like. It's a different world.

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The Value Add Real Estate Strategy That Doubled This Investor's Cash Flow

Most investors think the only way to grow is to buy more properties. More deals, more down payments, more risk. But what if the biggest opportunity you're missing is sitting right next to the property you already own?

That's exactly what happened to Chris Thorndike, one of our CRE Accelerator members based in Gainesville, Florida. Chris doubled his cash flow without buying a single new property. No new bank relationship. No new construction risk. And the whole thing started with a value add real estate play that most people would have completely overlooked.

Let me break down how he did it. And whether you've already got a building or you're still working through how to buy your first commercial property, this is the kind of value-add thinking that separates the people who build real wealth from the ones who just collect rent checks.

If you've ever wondered whether value add real estate investing is really worth the effort, this story should put that question to rest.

Chris Thorndike: By the Numbers

2x

Cash Flow Increase

$400K

Original Purchase

0

New Properties Bought

2.5 yrs

Zero Vacancy

From Abandoned Car Wash to Value Add Real Estate Goldmine

Chris originally picked up a rundown $400,000 warehouse building in Gainesville that came with an old, abandoned car wash sitting right next to it. Most people looked at that car wash and saw a liability: a dilapidated structure that needed to be demolished or left to rot. Chris looked at it and saw potential.

After buying the warehouse, Chris converted it into small bay units and leased it up to local businesses. The property has had zero vacancy in two and a half years. That alone is a great deal. But Chris didn't stop there.

He looked at the abandoned car wash right next door, a building he already owned, and realized he could convert it into micro suite office space. Same lot, same ownership, zero acquisition cost for the additional building. That's the kind of commercial real estate investing move that separates the people who build real wealth from the people who just collect rent checks.

The Value Add Real Estate Move Hiding in Plain Sight

Here's what makes this deal so brilliant. Chris isn't going out and sourcing a new property. He isn't competing with other buyers, negotiating with sellers, or taking on the risk of a new market. He's taking an underutilized asset he already owns and turning it into a cash flow machine.

The conversion plan is to build out the old car wash into multiple micro suites, small office spaces between 150 and 300 square feet. These units are perfect for solo practitioners, consultants, small agencies, and anyone who needs a professional workspace but doesn't need (or want to pay for) a full-size office.

"The best deal in commercial real estate is often the one you've already done. Chris didn't need to find a new building. He just needed to look at what was sitting right next to his existing investment and ask, 'What else can I do with this?'"

- Tyler Cauble

The demand for this type of space is massive right now, especially in mid-size markets like Gainesville. Small businesses and independent professionals want flexible, affordable office space without the overhead of a traditional lease. Chris is solving a real problem in his market, and he's doing it with a building that was literally sitting there doing nothing.

How He's Financing the Conversion With an LOI-Backed Line of Credit

So how do you fund a conversion project when you don't want to tie up a bunch of cash? Chris is using a strategy that's incredibly smart for value add real estate investors: he got LOIs (letters of intent) from prospective tenants before going to the bank.

When you walk into a lender with signed LOIs showing that tenants are ready to move in as soon as the buildout is complete, it completely changes the conversation. The bank sees pre-leased demand, not speculative construction. That allowed Chris to secure a line of credit specifically for the conversion, funded by the demonstrated demand for the space.

This is a pattern I see over and over with successful commercial real estate investors. They don't just have a good idea; they validate the demand first, then use that validation to unlock financing. If you want to understand how to underwrite a deal like this, the LOI strategy is something you should absolutely have in your toolkit.

Why Small Bay Warehouse and Micro Suites Are the Future

Chris's deal highlights one of the biggest trends I'm seeing in industrial real estate right now: the explosion in demand for small, flexible spaces. Small bay warehouses, flex industrial, and micro office suites are quietly outperforming bigger, sexier asset classes.

Higher rent per square foot. Small tenants pay a premium for flexibility. You're getting more revenue from every square foot than you would with one large tenant.

Diversified risk. With 6 or 10 tenants instead of 1, losing a single tenant barely dents your income. Chris has had zero vacancy in 2.5 years, but even if he lost one tenant, he'd still be at 90%+ occupancy.

Lower barrier to entry. You don't need a $2 million building to make this work. Chris started with a $400K warehouse conversion.

Sticky tenants. Small business owners who find a great, affordable space tend to stay. They build out their suite, establish their customer base, and they don't want to move.

The institutional investors aren't chasing these deals because they're too small. That's your advantage. While everyone else is fighting over Class A office buildings and big-box retail, you can quietly build a portfolio of high-cash-flow micro suite properties that nobody else is paying attention to.

The Lesson Every Investor Needs to Hear

Before you go chase the next shiny deal, look at what you already own.

Chris could have spent months searching for a new property. He could have tied up capital in another down payment. He could have taken on all the risk that comes with buying something you've never managed before.

Instead, he looked at the building sitting 20 feet from his most successful investment and asked one question: can I do the same thing here?

The answer was yes. And it's going to double his cash flow.

"You're not just buying properties. You're creating value in properties. And sometimes the biggest opportunity isn't out there somewhere. It's right in front of you."

That's the power of thinking like a value add investor. You're not just buying properties. You're creating value in properties. And sometimes the biggest opportunity isn't out there somewhere. It's right in front of you.

Key Takeaways

Value add real estate investing doesn't always mean buying a new property. Chris doubled his cash flow by converting an abandoned car wash he already owned into micro suite office space.

Small bay warehouse and micro suites are in high demand. Small tenants pay premium rents, diversify your risk, and tend to stay long-term.

Use LOIs to unlock financing. Getting letters of intent from prospective tenants before approaching your lender turns a speculative project into a pre-leased deal.

Look at what you already own. The best deal might be the underutilized asset sitting right next to your existing investment.

Institutional investors ignore small deals. That's your competitive advantage in micro suite and small bay warehouse investing.

This article is adapted from a conversation on the Tyler Cauble YouTube channel. If you want to hear Chris's full story, including the details of his financing strategy, the buildout plan, and how he's positioning the micro suites for maximum cash flow, watch the full episode above.

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The Tax Code Was Written for Real Estate Investors: 4 Pillars of Real Estate Tax Benefits

One of my partners netted over a million dollars last year and paid effectively zero in taxes. Now, I have never quite gotten to that point myself, but I have saved a significant amount of money on my active income over the years by simply investing in commercial real estate. And the reason that is possible has nothing to do with loopholes, shady accounting, or offshore bank accounts. It is because the tax code was literally written to reward real estate investors.

Today, I am going to walk you through exactly how he did it and, more importantly, how you can start using the same strategies in your own portfolio. But first, a disclaimer: I am not a CPA. This is educational content, not tax advice. Work with a CPA who specializes in real estate strategy. Got it? Good. Let's dive in.

Quick context before we dig in: every strategy below assumes you already own commercial real estate. If you're still working through how to buy your first commercial property, focus there first — these tax benefits unlock once you have an asset in your name.

The W-2 Approach to Real Estate Taxes (And Why It Is Costing You)

Most real estate investors handle their taxes in a pretty simple way. They buy a building, collect rent, pay taxes on the income. They treat it like a landlord filing a Schedule E: deduct your expenses, pay what is left. Maybe they depreciate the building on a straight-line schedule over 27.5 years for residential or 39 years for commercial. If the building is worth a million dollars, that is about $25,000 a year in depreciation. Decent, but nothing that is going to change your life.

Maybe at some point they do a 1031 exchange to defer gains on a sale. And that is about it. Buy, collect, depreciate slowly, maybe 1031 somewhere along the way, and eventually pay capital gains and depreciation recapture when it is all said and done.

I call this the W-2 approach. It is not wrong. But it is incomplete. And the investors paying almost nothing in taxes, the ones operating on a completely different framework, they are using the full toolkit that the tax code provides.

"The W-2 approach to real estate taxes is not wrong. It is just incomplete. The investors paying almost nothing operate on a completely different framework."

Why the Tax Code Was Written for Real Estate Investors

This is not some conspiracy theory or hidden secret. The tax code treats real estate differently on purpose. It goes all the way back to the 1986 Tax Reform Act, which codified structural advantages for real estate investors. Congress wanted to incentivize real estate development because it generates massive benefits for communities.

Think about it. If you build a 250-unit apartment complex, that is 250 people who can now move into the area. They are spending money locally, paying income tax, working jobs. The local government benefits enormously from the property tax base you just created. So Congress essentially made a deal: you take on the risk of building, improving, and maintaining real estate, and we will give you significant tax advantages in return.

The real estate tax benefits are not loopholes. They are features. And the four pillars that sophisticated investors use to minimize their tax burden are depreciation, cost segregation, 1031 exchanges, and borrowing against equity instead of selling.

The 4 Pillars of Real Estate Tax Benefits

01
Depreciation
02
Cost Segregation
03
1031 Exchanges
04
Borrow, Don't Sell

Pillar 1: Depreciation in Real Estate

Here is the baseline that every investor should understand. The IRS lets you depreciate real estate over time, essentially writing off the cost of the building (not the land) as a paper expense against your income. For residential properties, that schedule is 27.5 years. For commercial, it is 39 years.

So let me give you a real example. Say you buy a commercial building for $1 million, and the building (minus land) is worth about $800,000. Over 39 years, you get to deduct roughly $20,500 per year in depreciation. You did not actually spend that money. It is a paper loss. But it reduces your taxable income as if you did.

The building went up in value (hopefully), but your tax bill went down. That is the magic of depreciation. It is the most fundamental real estate tax benefit, and every investor should be using it. But it is just the starting point.

Pillar 2: Cost Segregation Studies

Cost segregation is where things start to get really interesting. Instead of depreciating your entire building over 39 years, a cost segregation study breaks the property down into its component parts. The HVAC system, the parking lot, the landscaping, the lighting, the plumbing, all of these things have shorter useful lives than the building itself.

An engineer comes in, literally walks through the property, and reclassifies those components into 5-year, 7-year, and 15-year depreciation buckets. And here is the kicker: with bonus depreciation, you can often deduct a massive chunk of those reclassified assets in year one.

Cost Segregation: Before vs. After

Without Cost Seg
$20,500
Annual depreciation
(39-year straight line)
With Cost Seg
$200,000+
Year-one deduction
(with bonus depreciation)

So instead of writing off $20,500 a year for 39 years, you might write off $200,000 or more in year one alone. That is a paper loss that gets applied against your real income. And this is why some investors specifically seek out properties with a lot of equipment, like car washes. You might look at a car wash selling at a 5.5% cap rate and think it does not make sense. But when you factor in the massive first-year depreciation from all that equipment, the after-tax returns look completely different.

A cost segregation study typically costs between $5,000 and $15,000, but the tax savings can be 10 to 20 times that amount. It is one of the highest-ROI investments you can make as a commercial real estate investor.

Pillar 3: 1031 Exchanges

A 1031 exchange lets you sell a property and defer all of the capital gains taxes by rolling the proceeds into a new like-kind property. And I mean all of them. Your tax bill on each sale is zero because you are deferring those gains. They roll forward and keep working for you in the next deal.

Here is how the timeline works. From the day of sale, you have 45 days to identify a replacement property. It could be two or three properties, or more depending on how you structure the exchange. Then you have 180 days from the sale to close on that replacement. If you do everything by the book and have a qualified intermediary guiding you through the process, you pay zero at the time of sale.

And here is what makes 1031 exchanges so powerful when combined with cost segregation: you buy a property, do a cost seg study, take massive depreciation in year one, hold the property for a few years, sell it via a 1031 exchange, and roll into a bigger property. Then you do it all over again. Each time you trade up, you are deferring gains and resetting your depreciation clock on a larger asset. The snowball keeps getting bigger.

"Buy, depreciate, 1031 exchange, repeat. Each time you trade up, you defer gains and reset your depreciation clock on a larger asset. The snowball keeps getting bigger."

Pillar 4: Borrow Against Equity, Don't Sell

This is the strategy that separates the good investors from the great ones. Instead of selling a property when you need to access your equity, you borrow against it. When you take out a loan, that is not a taxable event. You are pulling cash out of your property tax-free.

So let us say your building has appreciated from $1 million to $1.5 million. You refinance and pull out $300,000 in cash. That money is not income. It is debt. So you pay zero taxes on it. Meanwhile, the property continues to generate rental income and depreciation. You use the $300,000 as a down payment on your next property, and the cycle continues.

This is what wealthy real estate investors have been doing for decades. Buy, improve, hold, borrow against the equity, and acquire more. You never sell, so you never trigger capital gains. And the interest on the loan? That is deductible too.

A Real-World Example: $1M+ Income, $0 in Taxes

So how does all of this work in practice? Let me walk you through how my partner pulled it off last year. He stacked all four pillars together, and the results speak for themselves.

How He Netted $1M+ and Paid $0 in Taxes

Step 1: Depreciation

Baseline depreciation ran quietly in the background, offsetting rental income year over year.

Step 2: Cost Segregation

Frontloaded over $200,000 in paper losses into year one, applied against his real active income.

Step 3: 1031 Exchange

Sold properties and rolled gains into larger assets, deferring all capital gains taxes. Zero paid at each sale.

Step 4: Borrow Against Equity

Refinanced appreciated properties to pull out cash tax-free, then reinvested into more real estate.

By stacking all four strategies, he created enough paper losses to offset his entire active income. The IRS lets you do this. It is not a gray area. It is exactly how the tax code was designed to work for commercial real estate investors.

Key Takeaways: Real Estate Tax Benefits You Should Be Using

The tax code rewards real estate investors by design. The 1986 Tax Reform Act created structural advantages for investors who build, improve, and maintain real estate. These are not loopholes. They are incentives.

Depreciation is just the starting point. Straight-line depreciation is the baseline, but cost segregation can multiply your first-year deductions by 10x or more.

1031 exchanges let you defer taxes indefinitely. Sell one property, roll into the next, and pay zero capital gains at each step. Combined with cost seg, this creates a powerful compounding cycle.

Borrow against equity instead of selling. Refinancing pulls cash out tax-free while your property continues to generate income and depreciation.

You need a CPA who understands real estate strategy. Not just real estate. Strategy. A proactive CPA who helps you plan ahead is a completely different job than one who just files your returns.

This article is adapted from a live episode of The Commercial Real Estate Investor Podcast. If you want to go deeper on any of these strategies, check out the full video on the Tyler Cauble YouTube channel.

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How to Buy a Hotel: From Airbnb Investor to $20M Hospitality Portfolio

I sat down with Michael Russell, co-founder of Malama Capital, on the podcast recently, and his story is one that I think a lot of real estate investors need to hear. Michael built a portfolio of 15+ Airbnbs in Maui, hit a wall, pivoted into commercial hospitality, bought a hostel during COVID at literally zero percent occupancy, and turned it into the number one rated hostel in North America. Today he's sitting on a $20 million portfolio that he built without a single dollar of outside capital.

If you've ever thought about how to buy a hotel or wondered whether there's a smarter path than traditional hotel investment, this is the conversation that'll change how you think about hospitality real estate.

Michael Russell: By the Numbers

$20M

Portfolio Value

#1

Rated Hostel in N. America

15+

Former Airbnb Units

$0

Outside Capital Used

Why Airbnb Investing Has a Ceiling

Michael got into short-term rentals the way a lot of people do. He was living in Maui, saw an opportunity, and started building out Airbnb units. At one point he had 15 to 17 properties running, and they were doing well from a cash flow standpoint. But here's the problem he ran into that most Airbnb investors eventually face: the model doesn't scale.

With Airbnbs, every guest wants a bigger, better experience. They want nicer furniture, better amenities, a more "exclusive" feel. And every improvement you make costs more money, but you can only charge so much per night for a single unit. You're also stuck with comp-based valuations. Your property is worth what the house next door sold for, regardless of how much revenue you're generating.

That's a fundamentally different game than commercial real estate, where your property value is driven by net operating income. If you can increase revenue or cut costs, you directly increase what the property is worth. Michael realized this when he took a course on buying apartment buildings, and it clicked for him. He thought, "What if I took the revenue potential of short-term rentals and combined it with the value-add mechanics of commercial real estate?" That's essentially the hospitality investing model.

How to Buy a Hotel: The Hostel Advantage

So here's where it gets really interesting from an investment standpoint. When Michael was looking at the hostel vs hotel comparison, the math was overwhelming.

Same 400 Square Feet, Two Very Different Outcomes

$200

per night as a hotel room

$480

per night as a hostel (8 beds x $60)

2.4x more revenue per square foot

Revenue per square foot is the metric that matters in hospitality investing. Not RevPAR, not ADR in isolation. It's about how much income you can generate from every square foot of space you're paying a mortgage on. And that's where the hostel model absolutely crushes traditional hotels.

Now, I know what you're thinking. "A hostel? Isn't that just a cheap, dingy backpacker spot?" That's exactly what I thought too before I started looking at modern hospitality concepts. But what Michael built in Maui is nothing like the hostels you're picturing. Think more along the lines of a boutique social hotel. Beautiful common areas, curated experiences, community focused. The kind of place where people actually want to hang out, not just crash for the night.

Buying a Hotel During COVID at Zero Occupancy

Michael's first hostel acquisition is a masterclass in buying when everyone else is running scared. He found a property in Maui that had been a hostel for 25 years under a single owner who had basically let the place fall apart. Deferred maintenance everywhere. And then COVID hit.

The property was at literally zero percent occupancy when Michael bought it. Nobody was traveling to Hawaii. The previous owner wanted out. And Michael saw what most people couldn't see through the panic: a fundamentally sound real estate asset in one of the most desirable travel destinations in the world, available at a steep discount because of temporary circumstances.

The best time to buy hospitality real estate is when nobody wants it. COVID created once-in-a-generation buying opportunities for investors who had the vision and the stomach to move forward.

- Tyler Cauble

He completely renovated the property, repositioned it as a boutique social hostel, and within a relatively short period of time, it became the number one rated hostel in North America. That's not luck. That's understanding how to add value to a commercial property through operational improvements and strategic repositioning.

The Financial Case: Hostel vs Hotel vs Short-Term Rental

Let's talk numbers, because this is where the hostel model really shines compared to both traditional hotels and Airbnb-style short-term rentals.

With a traditional Airbnb, you're capped. You can optimize your listing, improve your amenities, and maybe charge a premium, but at the end of the day you're renting one unit to one guest (or group). Your revenue ceiling is fixed by the nightly rate for a single booking.

With a hotel, you get more rooms, but each room takes up significant square footage and you're still limited to one booking per room per night. The overhead is massive: front desk staff, housekeeping for every room, higher furniture costs per unit.

The hostel model flips all of that. You're putting 6 to 8 beds in the same square footage that would hold one hotel room, and you're charging $50 to $80 per bed per night. The revenue density is dramatically higher. You need less housekeeping per guest, your common areas do double duty as amenities, and your per-guest acquisition cost is lower because hostels attract travelers who book based on community and experience, not just location.

And here's the kicker: because hospitality properties are valued on income (just like commercial real estate), every dollar of NOI you add directly increases your property value. There's much more room for error, and a much stronger value-add play.

Hospitality Is a Business and a Real Estate Investment

Here's the thing that Michael said that really stuck with me, and it's something I've experienced firsthand with Salt Ranch Hotel here in Nashville. Hospitality investing isn't just a real estate play. It's a real estate investment and a business investment wrapped into one.

When you buy an apartment building or an office complex, you're mostly managing a real estate asset. Collect rent, maintain the building, manage the tenants. Hospitality is a completely different animal. You're running a business every single day. You're managing staff, curating guest experiences, handling reviews, marketing to travelers, adjusting pricing in real time. It never stops.

Find a partner or mentor who has done it before. I would have given them an equity stake to help provide experience from the renovation to operational efficiency.

- Michael Russell, Malama Capital

That's Michael's biggest piece of advice for anyone looking at how to buy a hotel or hostel. Don't try to figure it all out yourself. The operational side of hospitality is complex, and having someone who's been through it before can save you hundreds of thousands of dollars in mistakes. I've lived this reality myself. Running a hotel is essentially two businesses at once.

What to Look for When Buying a Hotel or Hostel

Based on Michael's experience and what I've learned through my own commercial real estate career, here's what matters most when evaluating a hospitality acquisition. If you're still working through how to buy your first commercial property, this same checklist applies regardless of asset class:

Location fundamentals: Is the market driven by tourism, business travel, or both? Maui works because of consistent tourism demand year-round.

Revenue per square foot potential: Don't just look at room count. Calculate how much revenue each square foot can generate under different operating models.

Value-add opportunity: Deferred maintenance and outdated operations are your friends. They create the discount you need to make the numbers work.

Operational complexity: Be honest about whether you have (or can hire) the operational expertise to run a hospitality business.

Exit strategy: Hospitality properties are valued on income. Every operational improvement you make directly increases the value of the asset.

Key Takeaways

Airbnbs have a scaling ceiling. The model relies on comp-based valuations and doesn't reward operational improvements the way commercial real estate does.

The hostel model generates 2x+ revenue per square foot compared to traditional hotel rooms. 400 sq ft with 8 beds at $60/bed = $480/night vs $200/night as a single hotel room.

Buying distressed hospitality assets during downturns is where the biggest returns come from. Michael bought at zero occupancy during COVID and built the #1 rated hostel in North America.

Hospitality is a business AND a real estate investment. You need operational expertise, not just capital. Find a mentor or partner with experience before jumping in.

Revenue per square foot is the metric that matters. Focus on income density, not room count, when evaluating hospitality investments.

This article is adapted from a conversation on the Tyler Cauble YouTube channel. If you want to hear Michael's full story, including the details of his renovation process, his thoughts on scaling a hospitality portfolio, and how he built a $20 million business with zero outside capital, watch the full episode above.

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90% of Her Warehouse Deals Come from Social Media, Not Cold Calling

I recently sat down with Aviva Sonenreich, managing broker at Warehouse Hotline in Denver and host of the Commercial Real Estate Secrets podcast. She's built an audience of over a million followers talking about commercial real estate on social media. And before you think that's some fluffy vanity metric, 90 to 95% of her actual brokerage deals come directly from her social media presence.

What Is a 1031 Exchange? Complete Guide to Real Estate 1031 Exchanges (2026)

What Is a 1031 Exchange? Complete Guide to Real Estate 1031 Exchanges (2026)

The 1031 exchange is one of the most powerful tools an investor can have in their arsenal for building wealth in real estate. It can help you improve your passive income, simplify property and asset management, assist with your estate planning, diversify your portfolio, and so much more. So, let’s dive on in to “What Is A 1031 Exchange?” in the real estate world.

How to Buy a Warehouse with $0 Down: A Step-by-Step Seller Financing Deal Breakdown

When Matt Barbaccia joined the CRE Accelerator back in November, the first thing he told me was, "Tyler, I feel underqualified for bigger deals." I hear that all the time. He had experience in residential real estate, he understood the fundamentals, but commercial felt like a different world. Fast forward 45 days, and Matt closed on his first commercial deal: a 70% vacant flex warehouse that he bought with zero dollars out of pocket using 100% seller financing. He set the record as a CRE Accelerator member for the fastest commercial deal ever closed.

33 Rental Houses vs. 1 Commercial Property: Why the Math Favors Commercial

I get asked all the time: "Tyler, how many rental houses do I need to replace my income?" And the answer is one of the biggest reasons I shifted my entire investment strategy toward commercial real estate. Because when you actually sit down and run the numbers on residential rental properties versus a single commercial property investment, the math is going to shock you.

He Sold His Apartments, Bought a Commercial Building, and Made $100k

Chad Acerboni isn't a full-time real estate investor. He's a tech sales executive who's been quietly building a portfolio on the side, one intentional move at a time. And his latest move? Selling his apartment complex, paying zero taxes on the sale via a 1031 exchange, and closing on a 30,000 square foot mixed-use commercial building for $2.1 million. The appraisal already came back higher than his purchase price.

Gold vs Real Estate: Why Commercial Property Beats Gold Every Time

Every time gold spikes, I hear the same thing: "Tyler, should I be buying gold right now?" And I get it. Gold just hit record highs, people are nervous about the economy, and there's something psychologically comforting about owning a shiny metal that's been valuable for 5,000 years. But here's what I always tell people: gold doesn't pay you. It just sits there. Commercial real estate? It pays you every single month while simultaneously growing in value.

Why Ghost Kitchens Failed: The $1 Billion Real Estate Lesson Nobody Saw Coming

In September 2019, RXR Realty, which had $18.8 billion in assets, made what looked like one of the smartest bets in commercial real estate at the time: a $40 million investment in Kitchen United, a ghost kitchen operator filling vacant retail space with delivery-only restaurants. Four years later, Kitchen United closed every single location and sold off all of its assets.