The Good Stewards Real Estate Podcast

Tools to Succeed in Commercial Real Estate Investing with Thomas Coffman

Episode Summary

Getting into commercial investing can be daunting, but with the right tools and relationships, you can do well. Thomas Coffman of Miracle Real Estate Partners is a specialist in low-labor model commercial investments, specifically car washes, small strip malls and gas stations--lining up buyers and sellers. Check out Thomas at miracle-re.com or @tcoff2 on Instagram.

Episode Notes

What’s Going On With Commercial:

2:30: COVID has exposed people that have been leveraged with a lot of debt and highlighted the ones that are well capitalized and able to make it through.

4:51: There’s going to be a lot of vacancy if it hasn't already from an office standpoint. From a retail perspective, COVID has opened up a tremendous amount of opportunity for people that want to get into the restaurant business.

8:45: Anything with a high labor model, like a restaurant, is going to take a while to come back from. But the low labor model like carwashes and gas stations remained open and will still trade in higher multiples.

10:14: Ryan wonders if we'll see people spending more on their homes since the work from home model is more widely acceptable and they’re not commuting as much. 

12:00: With the hard hit areas with expensive rent (the Bay Area), they’re having to hold out longer now. Millennials aren’t patient, so it will be interesting to watch those markets. 

Who’s Buying and Selling:

14:20: Thomas act’s as an acquisition and dispositions manager for buyers and sellers. He’s usually flipping these to private equity groups, institutional buyers and individual one-off buyer’s or sellers.

16:30: A lot of commercial investors are one block away from success in commercial real estate. Specifically with car washes, traffic counts, accessibility and site visibility is crucial.

Due Diligence for Commercial:

18:20: in residential real estate, sometimes you can cross the street and you're in a bad area, then you just subtract 5%, 10%. With commercial, that could be 50%.

21:51: The gas and carwash business is so fragmented compared to restaurant retail. You’ll find a lot of mom and pop style operations as well as the institutional-types.

24:45: If you’re wanting to start out, don’t start with a new build. There’s alot of hurdles with that. I’d recommend letting a tenant drive the acquisition.

28:00: A lot of the best commercial opportunities that you can flip or assign a contract to, are not going to be on CoStar, LoopNet or on the MLS. They're going to be something that you drive by and see that they just closed.

Tools Of The Trade:

30:00: CREXI, commercial real estate exchange is a great resource to find comps.

30:54: ESRI-STDB, ESRI site to do business is great for finding demographics and traffic counts.

32:00: Land Vision is a great resource to give you all property details including the owner information.

Connect with the Good Stewards:

Episode Transcription

Thomas Coffman: (00:00) In a lot of the best commercial opportunities to get started in that you can flip or assign a contract to, and they're not going to be on CoStar, LoopNet or on MLS, things like that. They're going to be something that you drive by and see that they just closed.

INTRO: (00:18) Welcome to The Good Stewards podcast, the only podcast dedicated to seasoned real estate investors who want to maximize the cashflow potential in their business. We are “buy and hold” investors with a thousand plus properties and markets across the U.S. who bring an insider's view into the nitty gritty details of real estate investing. If you're looking to develop the mindset teams and systems that can dramatically build your real estate business and network, you're in the right place.

Ryan: (00:50) Welcome to this episode of The Good Stewards podcast. I'm Ryan Dossey.

Amanda: (00:54) I’m Amanda Perkins.

Bill: (00:55) I'm Bill Syrios.

Andrew: (00:57) And I'm Andrew Syrios.

Andrew: (00:58) Welcome everyone to the Good Stewards podcast. Today we are going into niches again. Although we're going into a niche that none of us have actually really done a lot in, but we have a guest who has. Thomas Coffman is with Miracle Real Estate Partners. He specializes in finding deals, particularly car washes, gas stations, and small strip malls. Do I have that right, Thomas?

Thomas Coffman: (01:17) That's right. Thanks for having me guys.

Andrew: (01:20) Thank you for joining us. How is commercial real estate right now? We've talked a lot about the residential market and the market at all. But commercial real estate, given the pandemic, the lockdowns, what is going on? What are the people's thoughts going forward right now?

Thomas Coffman: (01:38) Well, as you can imagine, it's been crazy just like everything else. A lot of time has been spent digging people out of the ditch. Leases are put on hold, rent that hadn't been paid, developments that hadn't been filled. It's been crazy, but I think that we're coming out of this now and I’m excited to see where this is going ahead.


 

Andrew: (02:01) Is that the general feelings that your thought that like, this is a more of a speed bump than a long-term problem? Or is this like going to have it, do you think this is going to have repercussions that are going to last the rest of the year? Or is it just one of those predictions, well, they're like something everybody has them, right?

Thomas Coffman: (02:21) No, I think it's a speed bump, but I think in some sense there's a silver lining. It's retreaded the market in a lot of ways. Some people have gotten more real estate and they were in a position where they're making a lot of money and poor operators were having some luck. And so, this has kind of shown true colors. It's also exposed people that have been leveraged with a lot of debt and the ones that are well capitalized and able to make it through a speed bump like this if you want to call it that. I think it will be postured for a lot of success in the upcoming years.

Andrew: (02:56) That's a good point. I think a lot of bull markets do tend to make a mediocre investors think they're geniuses.

Bill: (03:05) That is definitely…

Ryan: (03:06) I’m just winning. I can't do anything wrong.

Bill: (03:08) Exactly.

Thomas Coffman: (03:10) Absolutely.

Andrew: (03:11) Yeah. I made 12% last year. A mark went on 15. Okay, well, yeah. Yeah. Although recessions are, and I think we are going to be in some sort of recession. I'm not sure how deep one. Recessions are when great investors really make a lot of money. And it's like you're saying those who are well-capitalized, those who are not over leveraged, whichever niche you're in are the ones that can take advantage of these situations because the bad operators lose out. They got to sell at a discount or perhaps get foreclosed on stuff, assets are cheap. And whether it be a carwash or a single-family resident, it's still an asset it's still cheap. Recessions are where you can make a really make big gains. But, they're also kind of scary to go through to say at least.

Thomas Coffman: (03:58) Absolutely.


 

Ryan: (03:59) It's kind of like a roller coaster, right? Like you're on the ride, but you can't get off. So, Thomas, I've got a question for you. I'm curious if you've seen any increase in vacancy and if so, I mean, it would seem to me that a lot of businesses realized they don't need an office, that their employees can work from home. And for a lot of small businesses, I know their number one expense has been there office or their retail space. So, if that's potentially transitioning to like more online, it almost makes me wonder if some things are potentially overbuilt a little bit. If things are going to go more back into home-based environments.

Thomas Coffman: (04:49) I couldn't agree more with you, Ryan. I think it's forced us to be more creative from Zoom calls to Join Me or just interactive screen-sharing. It is going to create a lot of vacancy if it hasn't already from an office standpoint. I think people are consolidating their expenses and not using office space as much. From a retail perspective, it's opened up a tremendous amount of opportunity for people that want to get into the restaurant business. You taking over a second-generation space that's gone out of business. Nashville, specifically, Austin, Denver. These markets that we're in all of us, it's been so tight. And for any of these retail operators to get into a really good location, they've had to pay crazy rent numbers. And now they're able to get into some of these second-generation spaces.

Ryan: (05:44) I think that's one thing people don't realize with commercial and particularly restaurants with good locations. I've got a friend of mine who's an incredible chef in LA. And he was telling me he used to have a spot down in Venice Beach and it was like, by no means like the best location, but his rent was like $30,000 - $40,000 a month. And it's like, that's a lot of food and alcohol that you have got to sell before you come out on top. I also think one of the other interesting changes that I've seen, I forget the name of it, but there was like buffet chain that went out of business.

(06:25) And I think that that business model probably died from this of that, like get your own food, salad bar type of thing. People always knew it was like a little gross, but I think the country as a whole probably got a little bit more like germaphobia and I forget what chain it was, but it was, I mean, like thousands of people they laid off and they just said like our business model is no longer viable.

Andrew: (06:55) I think people are going to get over it. I mean, they got over it after the Spanish flu, they'll get over it again.

Ryan: (07:02) Andrew just misses his all you can eat seafood in the Midwest.


 

Bill: (07:07) Yeah, I went through the Spanish flu and we didn't get over that quickly.

Ryan: (07:11) I think the other problem you have is you have social media now.

Thomas Coffman: (07:14) Exactly.

Ryan: (07:16) So it's like, you're really going to be like, hey, I'm at a country buffet, like probably not. So, I don't know.

Andrew: (07:25) Do you think there's long-term obsolescence, not complete obsolescence, but partial obsolescence in certain commercial categories because of both online retail, namely the Amazon behemoth and because of the move towards working at home, do you think certain classes of properties are going to be not obsolescent, but just like kind of around was saying oversupplied and maybe something to shift away from in the commercial space? I mean, not like car washes and gas stations. I mean, you might need to transfer to electric or something like that, but those are no, Amazon can't compete with that and you can't work from home on a carwash. So those make sense to be kind of beat through the path there. But do you see like commercial real estate kind of moving away from certain areas in a long-term sense that people should be cautious about?

Thomas Coffman: (08:18) I do. And some people might kill me for saying this. The Amazon monster is a real thing in the retail sector. A brick and mortar retail in terms of soft goods, in terms of clothing, apparel, things like that have really taken a hit and a lot of the online sales have actually gone up pretty, pretty tremendously. And I threw this in the coronavirus. And so, I think that's one thing that'll be affected. I think restaurants has taken a tremendous hit. Anything with a high labor model is going to take a while to come back from.

(08:56) And to your point, the express carwash model where it's low labor and gas convenience, these guys stayed open through the coronavirus. It exposed who was a real operator and who got lucky. I think those are going to continue to grow. I think it's been hot. And I think the multiples that they're trading at are really high and will remain high.

Ryan: (09:20) I'm sure they definitely saw a decrease with just like not as many people on the road, not as many people going into the office. So, what do I care what my car looks like? I think for me the thing that I hope comes out of coronavirus for people, it's just kind of like a reassessing of priorities and of their business model, of their lifestyle. I mean, if your employees are able to work from home successfully and they're happier and they get to spend more time with their kids and they're not commuting an hour a day, now, I'm speaking biased here because one of my companies, all of our employees work from home. But I think there's definitely going to be a move towards that.

(10:14) The interesting thing that I wonder if we'll see on the residential side is if people are able to work from home, they're not commuting as much. Will they be spending more on houses? Like, hey, if I'm going to be here all the time, I want it to be nice. And I know I could. My wife and I are buying a house right now and that was the decision we had. We've got a newborn coming in a few months and it was like, okay, the likelihood of us getting out a whole bunch is probably pretty low. So let's buy somewhere that we're really going to enjoy being.

Bill: (10:47) Well, I think what I hear around is that city centers are starting to take a hit and the suburbs where things are cheaper are probably drawing people there more readily because you can live there. If you don't have to commute in now to the city center to go to an office, you can set up an office in your suburban home. It seems like suburban and rural areas are actually going to find themselves…

Ryan: (11:18) Right for the Midwest.

Bill: (11:20) Yeah, that's right. Everybody's going to be drawn to that. I don't know what that means all for commercial, other than some city centers that have up till now been, I mean, that's where millennials have flocked to urban areas and the kind of markets that you're talking about Thomas. Are you seeing any trends along those lines at this point?

Thomas Coffman: (11:40) Outside of growth I haven't really seen much Bill. I can see that coming in the future. I just haven't personally seen it myself.

Ryan: (11:51) I think part of it is also like Thomas is in Nashville, which Tennessee is a pretty pro-business small government kind of a state. I think it'll be interesting to see what happens in the markets that were most heavily impacted by coronavirus. I mean, like, I think LA or the Bay Area now it's like two or three more months. I know with millennials, they ain’t patient. Like, I think they're only going to take that for so long where like, even if say politically you're more left or you like more of like the downtown amenities at a certain point, it's like, okay, maybe I don't want to be in the city. Like maybe I want to be in like an Austin. Like I think Austin is a great example. Like it's not on the water. But it's kind of just this neat, eclectic artsy kind of a place similar to like a Nashville.

Thomas Coffman: (12:47) For sure.

Andrew: (12:49) Well, let's transition back. I mean, the pandemic and the market are kind of on everybody's mind, but let's go back to the beginning. Thomas, how did you get started in commercial real estate? And what do you specialize in exactly? I'm talking about the grand market. Let's get down to the particulars for those who might be interested in getting involved in commercial risk.

Ryan: (13:05) Flipping some gas stations, how's it work?

Thomas Coffman: (13:07) Absolutely. Yeah. Well, I guess I got started in high school. My mom owned a residential real estate firm and worked out of the house, forced me to get my real estate license. And then I went on to play football on a full scholarship at Colorado State. I wanted to pursue the NFL and that did not work out. So, I fell back into real estate, kind of by default and started with a company called Endeavor out of Austin that has developed probably 20 to 30 million square feet of retail at this point, shopping centers. Which I was doing leasing forum and pad sales.

(13:50) And then I had a guy call me that owned a carwash chain. He owned about 10 to 15 car washes and asked me to help him grow throughout the country buying car washes and pieces of land to develop. And so, I got to see Denver, Nashville, Austin, Los Angeles and kind of dabble into different markets. And through that I guess that's how I found the niche of carwash and gas and kind of special use in the commercial real estate sector and understood the low labor model. And in a lot of these guys then asked me to do their dispositions. So, kind of act as an acquisition’s manager and dispositions manager when they have bigger portfolios, trading. These are as like you say, flipping these two private equity groups, institutional buyers, and then one off buyers in certain situations.

Andrew: (14:45) When you say the low labor model, what indicators are you looking for there?

Thomas Coffman: (14:51) Sure. And so, from a carwash perspective, there's like a full service where you get detail and you've got, let's say 30 employees and you're paying a lot of labor and you might have a higher gross revenue, but your net income is going to be slimmer. For the express carwash model, you only have two or three people. You have an automated tunnel and your margin, you might make 50% to 60% of what your gross revenue is on a take home. And so, you're able to, if you want to exit, you're able to sell this at a really high number, including the real estate. The biggest hurdle is advising these guys on site selection and what is a really good opportunity for someone especially new into the commercial real estate side. What is a good investment getting started? Because the first investment is going to be the most important.


 

Ryan: (15:48) It also seems like environmental of buying and selling these. Like, I imagine you guys have to do like the EPA reports and all that, correct?

Thomas Coffman: (16:00) That's right. Yeah.

Ryan: (16:03) A little bit different than houses.

Andrew: (16:05) Little more documentation. I guess let's walk through like, what are you looking for a site selection? Let's say we're doing a car wash here. What are the things that you're looking for when doing? And are you looking for site selection? Like, are these guys building, or are they just like buying…

Ryan: (16:21) Repositioning.

Andrew: (16:23) Repositioning, or just taking over one that already exists or all three.

Thomas Coffman: (16:27) All three. But I think it goes both ways if it's a retail carwash, restaurant, whatever it is for site selection. I think the most important things specifically for the car wash though in order would be traffic counts, being accessible and visible to a lot of traffic. Let's say 40,000 cars a day at a minimum it’s going to be a successful site. Now a lot of people are one block away from success. If they try to cut corners and go kind of behind a shopping center or behind a Starbucks and they're not visible, I would advise these clients to pay a little bit more to be on the street. That's going to capture the traffic. I'd say that… Go ahead.

Andrew: (17:17) I’m sorry. It just reminds me of a story from Jim Collins’s “Good to Great” where he's talking about Walgreens, I think. And they would literally… Have you heard this story? They literally take a Walgreens that was in the middle of the block, bulldoze it, or sell the building and then build one and making sure that it was on the corner of the street. And then they just no matter whether they'd be willing to pay. And it's an interesting thing. And then CVS would just copy them and put them on the adjacent corner of the street every time.

Ryan: (17:26) Which is why CVS’s are all dirty.

Bill: (17:50) When you're driving around just look where Walgreens are at. They are at all the best locations.

Thomas Coffman: (17:55) They are.

Andrew: (17:56) I don't know. They seem to be equally as good as CVS. Because it's just ones on one corner of the block and one's on the other corner.


 

Ryan: (18:03) Yeah. But you know the Walgreens is going to have been cleaned sometime in the past decade.

Bill: (18:09) I like your statement. I'm not sure where all do you use it, but you can be just one block away from success. That has a lot of implications to it, I think.

Andrew: (18:18) It's interesting because in residential real estate, I mean, I guess you could be, sometimes you can cross the street and you're in a bad area, but generally it's like one house, you just like, okay, this is on a busy road. You just subtract 5%, 10%. It's near a train track, whatever. You just take off. It's like, it's much smaller percentages. Okay. There's something wrong with this property versus something that's a block or half a block away, take off 5%, take off 10%, whatever.

(18:45) With commercial it's like, take a 50%. It's like it has to be because this needs to garner an income. It's not where somebody can live and it's not quite as convenient. It's got to garner, not only garner sort of gross revenue, but if it's just 20% less than gross revenue, it's not profitable. And so, there's that difference between being the black and me being the red is the difference between staying in business and having a building that you can actually rent out successfully and one that you cannot. So, yeah, I think that's a great point.

Ryan: (19:09) I'd imagine those secondary locations too. If traffic's normally 40,000 a day, I don't know how much it dropped. I didn't look at the data, but I know San Diego normally is a parking lot between 04:00 to 06:00. And I was able to like, no stop and go hardly any traffic for several weeks. So, I'd imagine if you were the guy who was counting on the trickle over when the other one was busy, right? If you were the CVS of car washes, then like, well, the main one was always available. Like there was no line. So, I imagine those guys got just absolutely clobbered.

Thomas Coffman: (19:49) Absolutely.

Ryan: (19:50) I definitely do feel for folks that launched a new business in February. We saw several new rush. We live in a pretty trendy part of San Diego called Hillcrest. And there's all kinds of restaurants and stuff within walking distance. And the amount of restaurants, stores, juice bars, bars that launched in February and then permanently closed. I mean, you had people bet it all on black and not be able to go a couple months with very, very, very little sales, which obviously, they couldn't have really predicted, but definitely interesting. So, I'm curious on the buyers and sellers of these. Is that like, there's kind of some mom and pop folks who own a gas station that are then going to like sell it to like a Shell? Or like who's buying and selling these? How does that work?

Thomas Coffman: (20:51) That's a great question. The gas and carwash business is so fragmented compared to restaurant retail. I mean, with restaurants, you see Chick-fil-A, McDonald's Starbucks, all the big guys. And with carwash, particularly it's so fragmented, you'll see mom and pops everywhere. There are institutional buyers like Mr. Carwash, which you guys might see in those markets here in, or in Eugene, you'll see Wash Boys or something like that. But they're just really smaller chains that are buying. And then there's private equity groups. But in this Covid time a lot of the private equity has come from healthcare. It's come from grocery stores. It's come from people that have actually profited from this recession and the 1031 buyers just don't exist right now. There have been a lot less of those.

(21:48) And so the car wash is… Go ahead.

Ryan: (21:52)  Just to highlight that. So, you guys were seeing people, 1031. Well, you have to go like to like. So, I guess they couldn't go residential to a gas station, but they could probably go like multifamily over to a different commercial, correct?

Thomas Coffman: (22:07) Or hotel, or multitenant retail strip center that they sold. Things like that.

Ryan: (22:11)  Looking for something easier.

Thomas Coffman: (22:14) Yeah. That's low labor. They don't think they'll have to spend a lot of time on it, which actually they will.

Ryan: (22:21) The grass isn't always greener.

Thomas Coffman: (22:23) So I just try to tell them, if you think it's going to be just put your money somewhere and don't work on it, it's not going to work.

Ryan: (22:32) Yeah. Very interesting. It sounds like your recommendation, if I'm somebody that is looking to get into commercial or looking to change, what sort of commercial I'm in. I mean, if it were me, I would be looking for government tenants. I would be looking for medical tenants. I would be looking for like, maybe if your warehouse space for like obviously not an Amazon, but that sort of like more of an online business.

Andrew: (23:02) Well, I guess real quick, how do you see industrial right now? Do you see that as pretty strong and getting stronger or is that just the amount of warehouse space? Particularly that's something Amazon needs for sure.

Thomas Coffman: (23:13) ) Yeah, absolutely. I think there's only so many Amazon's though. I don't spend a whole lot of time on industrial. I think there's different markets that have been a lot more successful with industrial. Whatever markets were really growing. And there's like medical here in Nashville is spurring a lot of growth. Austin it's the tech industry. And so, there's always going to be room for industrial when there's growth. But I don't know exactly how that will be affected during this recession.

Ryan: (23:46) It sounds like if I'm going commercial, I'm sticking with medical or government tenants. That would be the ideal.

Thomas Coffman: (23:51) I think medicals, if you own a commercial building and you can lease to a medical tenant, that's going to be your best tenant, basically credit. They usually can stick to it. A healthy support, a healthy rent number. And they're going to be a good credit tenant for a long time.

Ryan: (24:10) Interesting.

Bill: (24:11) So what Thomas do you see as somebody who's kind of curious about the commercial space that has been mostly a residential purchaser? And I mean, where should they start? Particularly given maybe some of the opportunities that are going to come our way with buildings that are going to go down because they're just not leasable in their present form anymore. And where should somebody start? Where can they make some baby steps in the commercial purchases?

Thomas Coffman: (24:45) I think that's a great question, Bill. I think like you said that the opportunities of people going out of business, as sad as that is to say, I think restaurant, I wouldn't recommend on the first investment building something ground up. I think there's hurdles that you'll come across with the city and site plans and construction and things like that. I think you can really get your feet wet in taking over an existing space. Let's say, Walgreens went out or a CVS. There's a lot of corners that are really solid, that have gone out of business you can acquire and put in some great tenants. I would also try to see if you can let the tenant drive the acquisition. If you know where a tenant is looking and they've got good credit and you can acquire something that you think that they will lease at a value that the landlord doesn't know, you can buy it for a lot cheaper. Put a high credit tenant with high into the building and then your cap rates a lot better once you own it.


 

Bill: (25:55) Just a quick question, keep going. But what's the different percentage wise from a commercial tenant who's looking to purchase or one that's looking to lease that you would be trying to find?

Thomas Coffman: (26:09) I think, I would, if I'm a developer owner of the real estate, I would much rather lease it to a tenant and have a much higher cap rate. I think it's 4% to 5%, with someone like a medical tenant that has good credit and that's what you're going to capture. I think as opposed to just buying it, having a tenant go by and itself.

Bill: (26:36) Right. I guess I'm just asking how many tenants out there are willing to purchase versus much more interested in leasing.

Thomas Coffman: (26:43) Gotcha.

Bill: (26:44) And you having that opportunity to be the one who purchases the building and then finds the strong tenant to lease it from you.

Thomas Coffman: (26:54) I think there's actually a lot more that like to lease. You'll see. And if you can get a ground lease, if you own the ground and you can get a ground lease, that's going to be the best option, the most profitable option for the landlord. But I think your odds are pretty high. If you can buy something, you'll have a tenant come lease it. And again, in a good corridor, a good real estate site selection.

Bill: (27:23) Because somebody who's out there looking at real estate every day, what are the opportunities to come across commercial property that you aren't maybe that familiar with, but then you could get it under contract. You could flip the contract to somebody and get your feet wet that way into commercial real estate.

Thomas Coffman: (27:45) A hundred percent. I think a lot of what I do is that. Just that Bill. And finding opportunities. I think taking into consideration, what we talked about earlier, traffic is the most important thing. Density, retail, synergy, and then growth or competition of whatever kind of use you're looking to put in there. And so, I think if those things check out and you can find something… And a lot of the best commercial opportunities to get started in that you can flip or assign a contract to, they're not going to be on CoStar LoopNet or on MLS, things like that. They're going to be something that you drive by and see that they just closed. And if you see a multitenant retail built in where the restaurant went out, but dang, that is a killer location, tons of traffic outside. And you call the owner of the building and say, hey, look, this is what I'd like to offer you. And you know what the real value of it is, and you can get it under market, put it under contract, the likelihood of you being able to flip it is pretty high.

Ryan: (28:52) So, you mentioned, and I'm imagining this as something that they would want to talk to a local commercial broker and figure out like, hey, in this small town, what is the general cap rate these are trading at. And then I think you mentioned like a four to five cap.

Thomas Coffman: (29:10) I think a four to five cap on like a Chick-fil-A or something with just crazy Crip, Starbucks, something like that. I think we're really looking in the range of seven to eight. I think getting started at, I would say that's where you want to try to land. I mean maybe nine, but I think…

Ryan: (29:30) Sorry to cut you off.

Thomas Coffman: (29:32) No, you’re good.

Ryan: (29:33) All right. So, let's say I talked to brokers in my market and figure out like the typical restaurant space with… Well, I guess, step one, how do you run comps on these? Is that like a CoStar thing? Is that an MLS thing? Like how do I even go about valuing what's going on in my market to know if I'm getting a deal or not?

Thomas Coffman: (29:56) For sure. I think you can find comps on CoStar. A system that I really like to use is called Crexi. It's commercial real estate exchange. C-R-E-X-I. And so that's a really good comp system. I think really, you've got to rely on a really strong broker is what it boils down to though. I think having a broker that understands site selection and what the value of the real estate is, analyses growth in the market. I think those are the things. And from what I understand in residential, it's a little bit different in terms of comps through MLS, but I think analyzing growth and traffic counts and things like that is really going to determine the value of the real estate.

Ryan: (30:44) Got it.

Andrew: (30:44) What are some of the good websites or services paid or not, that can analyze things like, it can give you data on traffic counts, demographics, etc.

Thomas Coffman: (30:54) So one of my favorites is a system called Esri. And it's E-S-R-I. Also known as STDB, which stands for Site to Do Business. And so, what that does is it allows you to put a map together of all the restaurants. If you want to look at restaurants or car washes, if you want to look at car washes, you can overlay traffic counts onto the main streets to really look at, okay, how much traffic is on the street? What is it facing? You can layer density and see how many people are there today. And then how many people will the estimated to live there within the next five years. And so, you can really look at a map with all the things that you really factor into site selection. You can look at incomes. Well, the whole thing. And so that's a system that I really like to use when mapping everything out.

Andrew: (31:48) So, Crexi for comps. C-R-E-X-I. And Esri. E-S-R-I for demographics and traffic counts and things like that. Okay, excellent.

Bill: (32:03) Are these websites or are these services? What are these exactly?

Thomas Coffman: (32:07) Services. In compare I mean, as you guys know, tons of services and platforms out there to use that are expensive. And these are actually relatively affordable and they're the best I've seen in terms of what they provide. Crexi it allows me to confidentially… It is as confidential as I want it to be, send it out, send listings out to specific buyers, put it on the market. CoStar, LoopNet do the same thing. You can put it out there, like an MLS kind of, but Crexi is my favorite from that regard. And then Esri I think it's, I don't know, maybe a thousand bucks a year or something like that. It's not crazy. And the same with Crexi. I think Crexi is $200 a month.

Ryan: (32:51) Which Esri product are you using?

Thomas Coffman: (33:00) It's a site to do business. So, there's a business analyst in there. That's my favorite. I mean, there's all kinds of things you can do with it. Comps, you can prepare demographic reports, all kinds of demographic reports, maps. I mean, everything you could really ask for from a commercial real estate standpoint is going to be in there.

Ryan: (33:28) Okay, cool. Now I think that's super helpful just to kind of give people like a little bit of like, if you stumble on, like, we've had random leads of like a gas station. Right?

Thomas Coffman: (33:40) Sure.

Ryan: (33:41) And I'm like, I have no clue.

Thomas Coffman: (33:42) Call me Ryan.

Ryan: (33:43) There you go. Call Thomas. But that's good to know of kind of some of the things to look at and look for.

Andrew: (33:51) I guess, how do you go about cultivating relationships with potential buyers or potential sellers for that matter? I mean, what's your general approach to that?

Thomas Coffman: (33:59) Sure. Well, there's trade shows that I attend. They're specific gas stations and car washes and then restaurants and retail. I think face to face is always great. I spend a lot of time on the road meeting with people that have portfolios with gas stations or car washes, and they want to put their business and the best position to succeed and that's what I'm passionate about. And so, I think just get getting on a plane and sit down with these guys has been a lot of my time spent.

Ryan: (34:34) How do you find them though?

Thomas Coffman: (34:36) And I think that as retool, I know going back to that has been a lot of it. It's been being able to map it out and look at the entire country and really look at it from a 30,000-foot view and say, okay, look, these are the ones that need to be consolidated. These are the ones that need to grow. Here's how I can have a strategic approach to help these guys as opposed to just kind of shooting from the hip. And so, if these guys call and say they want help, I'm educated in where they are in the market and what they probably need to do.

Ryan: (35:10) Does Esri give you owner info?

Thomas Coffman: (35:15) No. I use a system called Land Vision.

Ryan: (35:18) I'm just pulling everything out of you, aren’t I?

Thomas Coffman: (35:21) No, that's great though. And Land Vision is another one that's really affordable and it's really great. You can click on a piece of property address and you can highlight it and it will give you the parcel size. It'll give you the ownership information, it will give you really what you need to know from specifics standpoint with real estate. And so that's what I'll do.

Bill: (35:46) I know where Ryan's going. I mean, he's going to find all the owners and then he's going to…

Ryan: (35:51) I’m going to sell their contact.

Bill: (35:53) He’s going to send a mailing saying I'm interested in your property. And it seems like that brings us right back to residential is just define owners directly, as much as you possibly can. And if you find them in this situation in life where they do want to sell, whether it's a strip mall or some kind of a retail kind of property, that that's the best way to do it. Or at least stir up the waters and possibly find some opportunities who wouldn't otherwise.

Thomas Coffman: (36:27) Absolutely, Bill.

Bill: (36:29) Have you ever done mailings before Thomas or do you know anybody who has done mailings to like car wash owners?

Thomas Coffman: (36:34) You guys y'all are just really on to something right now.

Bill: (36:40) Should we partner? Do you want to partner together on that?

Ryan: (36:41) Go ahead and hit me up Thomas.

Thomas Coffman: (36:44) Jandy was telling me a little bit about you, Ryan. And I was scratching my head thinking, man, we could do some damage.

Ryan: (36:51) Yeah. Hit me up. I'm all for it.

Thomas Coffman: (36:54) I would love to talk to you about that actually. I have used a system called Constant Contact. And Crexi does it to where you can import the emails and send the blast. And through the email system, they'll get an email saying Miracle Real Estate or The Good Stewards. It'll show up as an email and you can see the flyer and things like that. But really sometimes it's ineffective because people swipe it under the rug as opposed to a direct mail, which is a lot more effective in my opinion.

Ryan: (37:31) Well, I think it's also just like, I don't know, it's kind of like getting a text out of nowhere. It's a little like, yeah, nope, not interested. And kind of want to know how you found my contact info.

Thomas Coffman: (37:42) Exactly. Right.

Andrew: (37:44) Excellent. Well, I think we're a bit over the 30-minute mark here. We will wrap it up. I think you've got a long list of different websites to view and a good introduction into commercial real estate where it's probably going, I guess. Nobody knows for certain. But Thomas, thank you very much for joining us. We really appreciate it. Is there anything that in any other ways people can reach out to you or anything you'd like them to know going out here?

Thomas Coffman: (38:08)  Yeah, absolutely. My website is miracle-re.com. That’s miracle-re.com. And so, my email and contact information is on there and I'm accessible. I'm easy to talk to, call me anytime and would love to chat with you more about it.

Andrew: (38:27) And you're in the Nashville market. Is that the only market you operate in or are you in to operate in several markets if people are interested in looking into commercial real estate or looking for someone to help them with that processor?

Thomas Coffman: (38:38) Yeah. I have local partners throughout the country in every major market, but I'm a licensed broker in several states, including Texas, Tennessee, Colorado, and Utah.

Andrew: (38:51) Okay. Excellent. Yeah. Well, definitely if you're looking for commercial real estate in any of those areas, definitely reach out to Thomas. Thank you so much for joining us. Again, go to our website goodstewards.com. Check out and subscribe to our podcast and we will see you next time. Take care everyone.

Thomas Coffman: (39:06) Thanks so much guys.