Commercial vs. Residential Real Estate: Which Is Better for Investors?
What if I told you the same $400,000 could work a lot harder in commercial real estate?
In this week's Office Hours, I'm breaking down two investments side by side: a $400,000 duplex and a $400,000 four-unit strip center.
The duplex generates $22,001 in annual net operating income, while the strip center brings in $29,950, even with one unit sitting vacant.
But here's the interesting part: that extra $7,949 a year isn't even the biggest difference.
I'll walk you through three residential investing habits you need to unlearn before making the jump to commercial, how triple-net leases change the numbers, and why increasing a property's income can create serious value.
If you've been thinking about transitioning from residential to commercial real estate, this is one you won't want to miss.
Watch this week's Office Hours and see how the numbers stack up.
Key Takeaways:
Residential feels familiar, but that doesn’t necessarily make it easier. Tyler argued that managing single-family homes can involve many tenants, roofs, HVAC systems, and loans for relatively modest cash flow.
Commercial property value can be increased by improving NOI. The meeting described commercial value as NOI divided by the cap rate, so raising income or reducing expenses can increase property value.
Commercial leases may shift some costs to tenants. Triple-net leases commonly have tenants cover their share of property taxes, insurance, and maintenance, though lease structures vary.
Vacancy is a key commercial risk to plan for. Tyler recommended setting aside reserves and using brokers, direct outreach, and listing platforms to find tenants.
Residential can still be a reasonable starting point. It may suit investors seeking lower entry costs or easier financing. Tyler also described building equity in rentals and using a 1031 exchange to move into commercial property.
Use AI as an assistant, not an unchecked authority. Tyler shared examples of AI helping with email follow-ups, meeting tasks, analytics, and document review, and stressed reviewing its work and approving communications before they’re sent.
For fundraising, prepare strong materials and clearly present the investment opportunity. Advice included an offering memorandum and choosing outreach methods appropriate to the offering structure.
About Your Host:
Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors.
Tyler Cauble
This episode of the Commercial Real Estate Investor Podcast is brought to you by my CRE Accelerator Mastermind, where you'll get access to my step-by-step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www.crecentral.com to learn more. Welcome back to the Commercial Real Estate Investor Podcast. We are live from the Cobble Group Studios here in Nashville, Tennessee, for another round of office hours. You guys have questions around commercial real estate. I enjoy teaching it, and that is what we do every Tuesday. I go live. We talk about some sort of aspect of investing in commercial real estate, so that you guys can get out there and start buying commercial properties on your own. It's a great thing to do. Changed my life. It's been a lot of fun since 2019. We've bought a lot of commercial properties, and it has definitely changed. I don't know my outlook, the things that I get to do on the weekends. You know, worrying about money is not really a thing that I have to worry too much about anymore, which is always always a good time. Anyways, we're going to be diving into commercial versus residential real estate today. I'm going to be highlighting some of the big differences, and maybe even some of the reasons as to why you might want to stay in residential. But a couple quick updates for you guys before we do that. I was in Chattanooga all day yesterday. You guys know we've got the project going on out there for Peerless Mel, and we've had a handful of meetings out there. Always a good time to get out to that property and meet some people. So we've got some some cafes. We've got a skate park. They're looking at going into the buildings out there, which I love. I mean, those are really cool, like traffic driving tenants, right? When you're first getting a project like that back up and running, the first thing that we want to do is just get people coming back to the site and realizing, like, hey, okay, we can. This is a destination again. This is a part of the community again, and we can always grow it from there. So having uses like that as we're first getting started, super super cool. We're working on some really big things out there. I can't announce it yet, but stay tuned because if we do, it could completely change the entire town, which would be really really neat, and it's kind of wild to say. We finally got our power turned on for the self storage facility. I kid you not; it took us a year from EPB, who's the local power group, to get power to our self storage facility. A year, absolutely miserable to deal with, but we finally got it done, and they've gotten the power turned on. I was out there meeting with the the electricians and the sprinkler guys yesterday. So, you know, once they get the power turned on, the electricians have to hook up the sprinklers. Then the sprinkler team has to come back out and program everything and set everything up. And so they were doing all that and signing off on everything yesterday. We're we're about the point to where the HVAC guys can come out and sign off on everything, and then outside of like final details, final walkthrough for our actual management team and like labeling the numbers on the self storage units, it's about ready to go. I am super excited to to finally get those damn doors open. You guys know that we've been working on this, I don't know two years now, which isn't you know isn't super long for a project, but it's it's a little bit longer than I was hoping for. SMG is saying the connection is choppy. Is anybody else getting a choppy connection? Let me know in the comments. That way I can try and see if something's going on on my end and get it fixed before it becomes a problem. All right, the other thing I want to talk to you guys about before we dive into commercial versus residential real estate AI.
Tyler Cauble
We've been using AI for a lot of our operations in our business. You guys know, like I've always been super honest and upfront. I'm a terrible manager. Like I do not like managing people. It's not a skill set that I have, I'd rather work in a silo, and the the things that we are able to do nowadays. Okay, Jim is saying his connection's good. All right, awesome, good. All right, Jason saying nope. Okay, cool, awesome. That scared me for a second because I'm like, man, we pay for like the top notch internet so that I can live stream to you guys. So SMG, I'm sorry to hear that. Maybe just try refreshing your connection. But the one thing that AI has really changed in my business, which I feel like everybody listening to right now could start implementing today, and it would really, really change things for you, is just operations. The you know again, like I'm not a good manager. I will tell people like, hey, I want this done, and then I'll forget to follow up, or I just assume that it's done because I told them to do it. They get paid to do it, or you know we're dealing with vendors, and I ask them for something, and then they just you know I don't follow up because they're supposed to send it to me, and I just think oh well I've sent it, it's out there, it's on them, they're supposed to send it. I don't know. Anyway, that's just how my mind operates. Like I. Assume that everybody's going to do the stuff that they're supposed to do, which is you know obviously not not good for managing people on your team or vendors or anything. And man, AI has completely changed how we can handle that. I mean, one from just being able to go through all of my emails, figure out like where all the conversations stand, and then draft email responses for me to review and edit because you guys know I hate email. Amazing. I mean, I've actually turned my autoresponder off on my email for the first time in like four years, which has basically said like I'm probably not going to respond to your email. Tough, you know. Send me a smoke signal. You know, like being able to have it, like you can have all these different bots set up. I'm using Grok. I also use Claude. We use ChatGPT for some stuff, so we're kind of using a little bit of everything. But Grok is the one that I'm using the most for like operations in my business and streamlining that. And it's it's wild, you know, having it go in there and just reviewing. Like if I send out an email, it'll say it'll come back to me and just pop up in my notifications. Hey, you know you sent this email last week and they haven't responded. I've already drafted a follow up email for your behalf on your behalf, and it's sitting in your Gmail drafts. That's awesome. I mean, it's it's absolutely killer to be able to do stuff like that, and it makes my life so much easier because I, the stuff that you don't like doing is the stuff that you put off, right? And writing emails is one of those things for me. I'd rather just hop on a phone call, and you know the fact that it's able to do that kind of stuff for me now is is really really cool. You know, as far as like monitoring your calendar and keeping track of big initiatives, and you know, hey, we record like on our team, we record every single call that I have with my team, and so now it's actually pulling out like, hey, here's here's all the objectives that came out of this meeting. Here's what you know everybody said that they were going to do, and by the deadline, so nobody's having to take notes anymore. It sends that out to everybody. We have a dashboard now that it's built out. I mean, this dashboard that we have built to basically run the company by is one of the most impressive things that I have ever seen. It's not something that I could have ever imagined possible, like being possible for a company of our size to be able to do this.
Tyler Cauble
But we have all of our we have our quarterly and annual goals on there. Then we have everybody's responsibilities broken out by you know what they're supposed to be doing every week, what's been popping up in our team calls, what we've been talking about, like what's in the parking lot for conversations for later. Because sometimes I just like to say things on our team meetings because I'm like thinking about it. Hey, this would be a cool thing to do. Cool, let's add it to the parking lot so we don't forget that one. It's totally changing how we run our business. So, if you have not started implementing AI into your business yet, into real estate, if you've not had it start helping you understand demographics of your market a little bit better, go try it out today. And what I will say is, look, AI is not is not perfect. All right, treat it like it's a a college intern that is working for you. Great that they come back and do all this work on your behalf, but you got to double check it. You've got to double check it. Charlie, what's going on, man? He's jumping in, saying, "Yo, Tyler, Charlie, Charlie here. Hope you're well. Good to hear from you, man. Hope you're doing well too. I just put a commercial drywall and framing submittal together with AI, and it took me 10 minutes. If I did it on my own, it would have taken me an afternoon. I did it with Grok. Yeah, it's pretty wild how how quickly you can put some of this stuff together now, and the the amount of data that it will pull in too. Garden Man is saying good morning, Tyler. Trying hard to make sure I do not miss your insights, I appreciate that, Garden Man. He's saying I've subscribed to the Deal Analyzer and your investment course. Well, awesome. Well, Garden Man, hope it's been helpful. the The Deal Analyzer has been a total game changer for everybody. It's really cool. On average, we have our members in the accelerator underwriting commercial real estate deals in under 10 minutes. It used to take, I don't know, 30 minutes to an hour or longer before. It's just it's so much easier to use. All right, let's talk about commercial versus residential real estate. Guess that's what you guys are here for, right? Here's the thing: commercial versus residential real estate. We're going to talk about what's better for investors, and here's, I don't know, my opening statement. Houses aren't easier; they seem like it, but let's talk about why I would say that. Houses are the safe start as a real estate investor. They are what most people believe to be a pretty good investment, and I get that because you grew up in one, right? You can drive by them. You see them all the time. Your bank lends on it. You probably have family members that have said, "Hey, go buy a house. I'll help you do that." You've probably listened to Bigger Pockets. It's one of the biggest podcasts in the world, and all they talk about is buying single-family homes. I mean, now they talk about some multifamily and some other things, but they've got hundreds, if not 1000s, of episodes just on you know investing in single-family homes. And there's a ton of information out there on it. There's tons of podcasts. There's tons of meetups of you know investors' associations, all sorts of groups that talk about investing in residential real estate, commercial real estate. There's not a lot of that, and and that is why commercial real estate is kind of this black hole of information. I guess you could kind of put it. It seems you know if you're if you've seen The Lion King, like there's that far off land, the shadow lands. Like that's like commercial real estate, right? It's kind of hidden in the shadows, but it's really not that difficult. And we'll dive into some of the things that you can like the different ways that you can learn about how to actually go about doing it today as well. But I get it; houses feel safe. The thing that I will say though is that familiar is not easier. Let that sink in. Familiar is not easier.
Tyler Cauble
Just because residential real estate is familiar to you does not mean that it is easier. And you might be sitting there thinking, "Well, Tyler, you know I can buy a house for $150,000. That seems pretty easy." What is not easy about that is that you have one house, one tenant, one roof, one HVAC unit, and maybe you're cash flowing 100 bucks a month, 200 bucks a month, 300 bucks a month. I mean, if you're if you're cash flowing over 300 bucks a month on a $150,000 investment, I'd say it's pretty damn good for residential real estate. It just doesn't pencil. It doesn't make sense. There's the prices are too high, and rents are not; they just don't match. All right. What's the problem with 100, 200, or $300 a month of free cash flow? You're like, man, that's pretty great. It's actually paying for its mortgage. It's throwing off all of this cash flow. The problem is, if you're cash flowing 100 bucks a month, if you get one phone call and you're the property manager. You've already lost your profits. That's right. Your time is valuable, and if you are having to deal with this thing, it's not worth 100 bucks a month. Go get a a bartending shift one night on the weekend. You will make far more money than that house will ever make you, and you will take on far less risk. I just don't do it. All right, let's talk about how value is set because this is a pretty big, big difference between residential and commercial real estate. Is who sets the price? Now, when it comes to houses, this is based on comps. All right, and they're different comps from how commercial real estate is because yes, you could argue well, commercial real estate is based on comps too. A little bit different. The comps that are used in residential real estate, if you've got a three-bedroom, two-bath house, they're comping it against every other three-bedroom, two-bath house within a half a mile radius, all right, or within that neighborhood or within that zip code, right? Depending on where you live and how many homes you've got, your house is going to be valued based on how much the house down the street sold for. If they have a relatively comparable house, it's fixed up just as much. Then you're probably going to sell for a relatively close price per square foot to what they sold for. How can you make that bigger? Well, I mean, if you go from a three bed two bath to a four bed three bath, but now you're having to add on to the existing structure, maybe you're starting to outbuild the neighborhood, and your actual price per square foot value could go down, but now you've got more square footage, so it'll make up for it, and you'll be able to sell for a little bit more. That's a lot to take on for a project like that. The nice thing about commercial, because of forced appreciation, which if you are not familiar about forced with forced appreciation, we're going to be talking about that here in a second. The value is based on the net operating income divided by the cap rate. All right, so you control it. If you can increase the net operating income, which means either bringing in more rent revenue, or decreasing your operating expenses, or both, you are substantially increasing the value of your property. You guys have heard me use this before, but since the income sets the value, if you add $1,000 of additional net operating income to your bottom line on an 8% cap rate that gives you $12,500 in value. Is there anything that you can do with a residential home to spend $1,000 and get a 12,500 value? And to be clear, this isn't even spending $1,000 in commercial real estate, this is saying, "Hey, I'm going to raise my rents with you know across all of these tenants by $1,000 this year," and that added $12,500 in value. Pretty amazing! You have control of that. Like that is what I love about this: is that you actually have control of your destiny when it. Comes to these, you don't have to worry about your neighbor down the street throwing out a bunch of junky cars, and because you don't have an HOA, you can't really control it.
Tyler Cauble
And you know the metro area is not really governing it too much, so they don't really care that they've got a bunch of junky cars, and now it's decreasing your property values, or you're having difficulty finding tenants because your neighbors are trashing up their lawns, that doesn't matter in commercial. All that matters is: do you have good space? Are you able to increase the net operating income? And are you able to keep the tenants there? The other thing that's pretty interesting too is the operating costs. All right, when you have residential, the tenant writes you a single check, and then you, as the landlord, pay for everything. All right, so that means out of that single check, you've got property taxes, you've got building insurance, you've got repairs and common area maintenance. If that HVAC unit goes out, you're over there replacing it, and you're also probably losing a year or two's worth of profit. All right. On the commercial side, we have triple net leases. There's several different types of lease structures, and there's many different ways and reasons as to why you would pick a different structure. But the tenants are typically responsible for that. So that means that they're they're paying you base rent, but then they are covering their proportionate share of property taxes, building insurance, and the repairs and common area maintenances. That means that if your property taxes go up, you're not now losing more, you know, making less money than you were last year. That gets passed on to the tenant. If your insurance goes up, which we were seeing all across the board, that gets passed on to the tenant. It's pretty great. So if we were going to take a $400,000 property, let's say we've got a $400,000 duplex and a $400,000 strip center. And you're probably thinking, "Well, Tyler, there's no way that I can find a $400,000 strip center." Yes, you can. Back in 2021, I bought a $435,000 retail building in East Nashville on Gallatin Pike, seven minutes from downtown Nashville, one of the hottest markets in the country. I bought a bill. It was 2200 square feet. So I don't want to hear it that you can't find those types of buildings. Yes, you can. You can absolutely find them. Send them mailers. That's how I found that one. I sent them a mailer. It was off market. Pretty great deal. Anyways, a duplex. You've probably got a 41 and a half percent expense ratio. Typically, what we see is anywhere from like 40 to 50% on residential real estate. Could be higher. Could be a little bit lower. Depends on how you're running it. Generally, like especially multifamily, like you're closer that 45 to 50% range. Strip centers typically have a lower expense ratio depending on how much common area maintenance you've got going on. So, like, if you got a ton of like really nice landscaping, obviously it'll be higher. But we've assumed a 33.4% expense ratio. I would say 30 to 35% is a pretty good range for an expense ratio. That means that we're bringing in about $22,000 in income on the duplex versus 29,950, and that's assuming that's still with a quarter of the shopping center being empty. By the way, if you've got questions, drop those in the chat. I will get to them at the end of this presentation. So the point is that commercial real estate can be far more profitable even at the same price points. Even at the same price point, if I'm going out and I'm going to buy a $400,000 house. Why should I just look at seeing if I can buy a 2000 square foot $400,000 building? All right, we did a video on this. I don't know earlier this year on the channel talking about how it takes like 33 single family homes with the average net income today. Like based on what real estate investors are reporting today. It takes 33 single-family homes to net the same monthly income as it would for one commercial building. Can you believe that 33 houses? I mean, getting up to 33 units would be amazing. But why the hell would you go through that effort where you could do one building instead? Like that's 33 transactions. That's 33 opportunities that you have to find. Then once you get them, that's 33 roofs. That's 33 tenants. That's 33 HVAC units.
Tyler Cauble
33 different loans. What a pain in the ass, man! You know the commercial building. You know, you might have multiple tenants under one roof. It's very easy for you to go out and manage. You only have to find one. Now, I know that the real risk for a lot of newer commercial real estate investors is the vacancy. Well, I understand, Tyler, that if if I buy a single family home, I just put it up on Craigslist and Zillow and Apartments.com and a four rent sign out in the yard, and I find a tenant. Okay, yeah, great. You find a tenant that's gonna you're gonna net 100, 200, 300 bucks a month off of. Like, dude, that doesn't pay for the gas to go back and forth to the house one time. Not worth it. Commercial real estate can be scary because I know that a lot of people do. Understand how to go about leasing commercial real estate. How do I get those spaces filled? Well, one, businesses need space. Two, you have real estate agents. You have commercial real estate brokers that all they do full time is handle leasing for buildings like this. So just call one of them, put them to work. You don't even have to pay for them to do the marketing. You don't have to pay for them to put signage up. You only pay them once a deal is actually closed. So it's well worth it for you. And if you structure it the right way, which is how I structure it, they don't get paid their portion of the commissions until so we do like half up front and then half upon rent commencement of their commissions that are due, and they don't earn that first half until we've got a fully executed lease. We've received the first month's rent and the security deposit, so I have money coming through the door before I'm even paying the broker. Pretty good deal. And then on top of that, you can send out mailers, you can stop in and knock on doors. It's the you can list it on Krexie and LoopNet. It's all the same stuff as a residential home. Yes, you have to take a little bit more risk, but if you buy it right, you're already accounting for that and mitigating that, and you're you can make substantially more money. The self storage facility that I was telling you guys about earlier on in the show, that once it's stabilized, will net us $15,000 a month. 15,000 a month off of one deal. My partner and I put about 1.7 million into it, but we did a 1031 exchange from a deal that we put $100,000 each into. Let that sink in. We put $100,000 each into a deal. We rezoned it, sold it, did a 1031 exchange into this self storage facility, and now it's going to net us 15,000 a month. So, like within a year, we're making over half of our initial investment back. Can't do that in residential. So when it comes to vacancy, though, just plan reserves, put some money in there for it. Make sure that you've got the right brokerage team. Make sure you've got the right property management team. Make sure that the space is cleaned up and it's easily viewed and looks good when it's viewed. All right. If you guys want to walk through your first commercial deal with me, obviously you know that that's what I do. We've got a we've got the CRE Accelerator Mastermind. I'm working with investors on that on their deals every single week. We have a coaching call on Monday nights and Thursday mornings. We had one last night. It was great. We dove into three deals, analyzed three different deals all over the country. It's a lot of fun. So if you want to check that out, go to crecentral.com. Let's talk about who residential fits and who commercial fits. Like commercial is not going to be a fit for everybody. It's just not. Maybe you should stay in residential. You know, residential is great for people who are just getting started. All right. Now I tell people like, you know, should you buy residential real estate to get a little bit of experience before you jump into commercial? No, I think you'll get the experience that you need from buying commercial. So just go buy commercial.
Tyler Cauble
But you know, some people they're they're intimidated by it, and I get it. You know, I I totally understand it. Maybe you don't have anybody around you that can mentor you through the commercial real estate side of things. And so, at least, hey, getting started in residential is better than not getting started at all. Residential does have a lower entry cost, so if you're adamant about not having partners, or you have a partner and it's just like the two of you, or it's like you and a family member and you just don't want to raise money for it, residential is a great way to start because you can get in there. You can build up some equity. It's going to take you some time. It's it's going to take a while, but you can definitely do it. I've helped a lot of clients do it that have gone in and you know built up a residential portfolio. Took them probably 10 years to get you know five, 710 properties that had enough equity to where they could sell it and do a 1031 exchange into commercial. But in the long run, it was worth it, and then the nice thing about residential too is like you get to learn with, I guess like lower lower risk tenants, right? Like you're signing one year leases, they're generally not you know completely renovating the space and changing that over. They're not going to have a lot of demands, so it could be easier for you to learn with those tenants. But look, if you're looking to scale, if you actually find value in being able to force appreciation and raise the value of your property, and you're just tired of managing houses, commercial is a way to go. I can't tell you how many investors have joined the accelerator and call me and they're like, you know, I've got five houses, 10 houses. I mean, we've had a couple guys join that had 120 houses. Think about that, like over 100 homes is like the goal when it comes to residential real estate. It's like, what yo, he's got 100 doors, you know, and and these two guys. They both actually had about 120 units. They were both miserable dealing with it. You know, it's like, look, I'm I'm at the point where everybody says that residential real estate, like this, is the goal, is 100 doors, and it's miserable dealing with the tenants, and we're not making enough money. And I have 100 different HVAC units that go out all throughout the year, all the time. I mean, think about that. It's just miserable to deal with. So the three reasons to stay in residential: like you need the easier financing. You know, like if if you just don't want to deal with banks, you want to, you know, I don't know, take the easy route in life. I guess stay with residential. I'm not going to say that commercial is easy. It's it's it is not easy, but it is very simple to do. Anybody can do it if you're willing to put the work into it. It just takes a little bit of work, and anything in life is worth that's worth it is worth working for. The other reason you're still building your base, all right? Like if you still are like trying to build your own little war chest, and you don't want to raise capital, and you don't have partners, or you just don't have access to that. Which, by the way, everybody really has access to that. It's just a matter of how many networking events are you going out to, and what are you doing to provide value to everybody else. That's how you can find investors. It's really, really simple. Go to networking events, build real relationships, provide them value first, and then three, maybe you just want smaller, quicker exits. Like that's that's a very valid reason to stay in residential real estate because you cannot do that in commercial. All right, residential you can very quickly get in, fix up a house, and flip it. All right, that doesn't really work in commercial. Like, yeah, you can do the same strategy. Commercial is just a longer timeline. You know, commercial can make a lot more money, but it's not a get-rich-quick scheme.
Tyler Cauble
Like if you think that you're going to get into commercial real estate tomorrow and just start making 1000s of dollars of cash flow a month, like it takes our accelerator members on average about three years to get to 10k a month in cash flow, about three to five. I'd say closer to three. You're being very intentional about it, so that means like day one you're not going to be making $10,000 a month in cash flow just because you want to. That's a hell of a like a much better opportunity than it ever will be in residential. I mean, think about how many how many homes it's going to take you to get to 10k a month and and passive income. You're making 300 bucks a month. It's about 33 homes, right? So here's the path that you need to take if you're wanting to get out of residential, or maybe you feel like, hey, I've got to start in residential because I've got to at least build it up, and then I want to take the transition into commercial real estate. One, own a few doors, go get 1235, 10 doors, all right. And step two, start focusing on building up your equity and your track record. The more equity that you have in these houses, the more that you opportunity you will have in step three, which is where we sell those properties, sell them as a portfolio, sell them as retail, whatever works best for you, and then 1031 exchange them. You can 1031 from residential to commercial. That is like kind. They are both real estate investments. Now you couldn't sell your primary home in 1031 in a commercial because it's your primary home and it's not an investment. But you can sell rental properties and buy other rental properties regardless of the zoning. Okay, so you can build up a residential portfolio, build up equity, build up cash flow, sell them all 1031 exchange any commercial, and buy your first commercial building. It's a pretty easy step. I've helped hundreds of commercial real estate investors that started off on the residential side do this. It's a phenomenal way to do it because you've got these residential units. Why not sell them? Get them off your books. Stop dealing with the headache, and get you a commercial building. So the takeaway that I want you guys to walk with today is that houses aren't easier. Like single family housing is not an easier investment. It's just familiar. It's just more comfortable to you. All right. Commercial actually allows you to control the value, and if you're going to be a true real estate investor, there is nothing more important than that. All right, let's get to y'all's questions. Let's see here. Man, you guys are blowing it up today. All right, Scott saying 100% agree. AI has been a game changer and treat it like an intern or apprentice. Yeah, absolutely. Jim saying I've implemented Grok in my business since your presentation at the Nashville in-person event, October 23rd and 24th. Which, by the way, if you guys missed that, you will have an opportunity to check out the recordings and get the downloads. Our in-person event was awesome. It was all about like the business systems that you need in place to run a real estate business. It was a lot of fun. So, Jim, glad to hear that, man. Have a long way to go, but very powerful. Thank you. Grant is saying why Grok over Claude. Oh, that's a good question. I like Grok. More than Claude because of the way that the bots are set up. I actually created a chief of staff bot that basically oversees all of my other bots, and so I can have a conversation with that one, and then it delegates to everybody else. The other thing that's really nice is that Grok operates on its own computer, whereas Claude operates on my computer, so if my computer is closed, Claude won't run, and that is frustrating to me. And I'm sure there's a way around that, but like that's just how I've got it set up, and that's how it works. I also do love how easy it is to trans transition from my phone to my computer with Grok. It's just been amazing. Yeah, Jason is saying I can't give my houses away right now. Boo! That's okay, Jason.
Tyler Cauble
The market will come back, and then hey, we'll we'll know better. In the next upswing, we'll get those things sold, and we'll buy some commercial properties. Do a 1031. Let's see. Grant's asking Jim what kinds of things he's using the Grok bots for. I mean, I'll tell you guys some of the things. I mean, hey, let me just pull out my phone. I'll tell you guys exactly what I'm using some Grok bots for. I've got a YouTube channel one that keeps track of all of our analytics, like what thumbnails are working, what titles are working, which is really cool. So, like, my team and I can have that data. So, while we're working on the next video, it could be like, "Hey, these thumbnails are working better than these thumbnails." So, okay, well, let's let's create a thumbnail that's in that direction. Let's try a title that's like this. I've got a Grok bot on Salt Ranch, so which is our boutique hotel here in Nashville. Which, by the way, if you're ever coming to Nashville, check out Salt Ranch. Come stay with us, but it is the expert on Salt Ranch. It has every single file, every single email that has ever been sent to me related to that hotel. I mean, think about how powerful that is. I don't have to go searching for documents, thinking like, "Oh, I know that we talked about this at some point, but it was probably 2022, and I, you know, now I've got to go back through my email and find all this stuff. No, I just go to that bot and I say, "Hey, I'm pretty sure sometime in 2022 we had a conversation about this. Can you find it?" Boom, done, amazing. Let's see here. I've got one that like just reminds me of everything that I've got going on on my calendar. I mean, kind of nice, but like it goes in, it looks at my calendar, it sees who my meetings are with, it does research on them, which is super cool. Like if it's somebody new that I haven't had a meeting with before, and it will actually prompt me and say, "Hey, you know, here's here's what you have in common with this person. Here's you know this that and the I don't know. It's just kind of nice to have that kind of prep before going into it. I've got a software developer Grok bot that goes in and helps me develop all sorts of software, like you know, working on the deal analyzer, right? Like when I'm going in and editing that software, Grok helps me do that. Now I do have Grok and Claude working together on a lot of things because I want them second guessing and double checking each other. Big, big thing to have. All right, let's see. Looks like we got a lot of things talking about selling some of Jason's homes for him. Let's get Jason's houses sold. Let's see. Jerry saying great topic. I'm presenting on this to a networking group tomorrow, so this one has been very valuable and timely. Awesome, Cherry. Well, hopefully we had some good takeaways for you that you can share with them tomorrow. Let's see, Scott Stang Tyler, we're doing ground up storage development in Tucson in a pocket where the square foot per capita is under two. We're looking to raise funds for it. Any words of wisdom? Thank you for your time, Scott. Man, the best thing to do is you know one put together a hell of an offering memorandum. I think those are always super nice. Blast it out there. You know I don't know if you're doing a 506B or a 506C syndication, but make sure that you're just sharing it with everybody. Call everybody in your phone. Text everybody in your phone. I would do a webinar. I go live and just talk through it. Every time that we are fundraising, I go live and I answer questions and I talk to my investors. So I mean, it is it is it is phenomenal. That that's the best way to do it, man. Is is to just reach out that way. If you're doing a 500 6c, obviously it's a lot easier to just share everything on social media. 500 6b, you got to keep it a little more private. But that's what I would do, man.
Tyler Cauble
Make sure that you've just got a great offering memorandum. Because like, here's the thing: if you've got a great deal, people have money that they need to work for them. And and I think the other thing that I I see quite often is the the mentality shift. You are not asking somebody for money; you're giving them an opportunity to double their money or triple their money, whatever your numbers are saying. All right, so keep that in mind. Like people that have money want their money working for them, so that they can go sip Coronas on the beach. Jason is asking if we. Can have an AI based live, absolutely. Yeah, I'd be happy to share. Like, go live. We'll we'll do. You know, maybe next Tuesday we can do an AI live stream. I'll just share with you guys like how I'm using this in my business and ways that you could be doing it too. Let's see. Cherry saying I switched to Grok after the Nashville meetup and it's been amazing. Yeah, I broke down like how I'm using AI in my business at the in-person mastermind event that we had here. Which, by the way, it's not live yet. But crecentral.com/events. If you ever want to come to one of our in-person events, they're a lot of fun. We had like 60-something people here at this last one here in Nashville. Check that out again. That page is not live, but it will be seriescentral.com/events. Let's see. Jim is saying I also have it reviewing my documents and comparing it to my buy box. Has drafted documents and task lists for talking to attorney and title company. Yeah, dude. Here's the thing: you're not going to be the expert on everything. So why don't you take these documents, give it to Grok, and say, "Hey, I need to. I don't understand this topic, but I need to make sure that my team, my attorney, my broker, whatever, is you know approaching this the best way. What questions can I ask to make sure that I am getting the information that I need? Whatever it is, pretty awesome. Yeah, Scott saying thanks for the input. Anytime, my friend. Happy to help. Jim is saying I don't let it send anything without my approval. That was a big one for me. Do not just let it automatically send stuff. I have to approve everything. All right, guys, that is it for today. I've got to jump. Maybe next week we will do an AI live stream. If you want to do that, drop it in the comments. Let me know. Appreciate you guys for tuning in. Please like the video. If you're listening on Apple Podcasts or Spotify, please leave us a review. Always helps so much when you guys do that kind of stuff because it gets us out there in front of the next person who might be making the mistake of jumping into residential real estate. We don't need them doing that. Let's get them into commercial. Appreciate you guys. Y'all have a good week. I'll see you then. This episode of the Commercial Real Estate Investor Podcast is brought to you by my CRE Accelerator Mastermind, where you'll get access to my step-by-step investment blueprint, essentially a library of resources on how to invest in commercial real estate. You'll get connected to a supportive community of other commercial real estate investors that are doing projects just like you. You'll get personalized coaching and feedback from me every step of the way. Go to www.crecentral.com to learn more.
What if I told you the same $400,000 could work a lot harder in commercial real estate? In this week's Office Hours, I'm breaking down two investments side by side: a $400,000 duplex and a $400,000 four-unit strip center. The duplex generates $22,001 in annual net operating income, while the strip center brings in $29,950, even with one unit sitting vacant. But here's the interesting part: that extra $7,949 a year isn't even the biggest difference.