In this episode, we dive deep into the world of commercial real estate with Mike Holdwick, a seasoned investor who has mastered the art of asset diversity and high returns. Mike shares his journey from a W2 employee to a successful real estate entrepreneur, offering valuable insights and strategies that can help commercial real estate investors achieve financial freedom.
Key Takeaways:
- Diverse Asset Portfolio: Mike emphasizes the importance of diversifying your commercial real estate investments. From neighborhood offices to flex spaces, industrial properties, and medical buildings, he highlights how owning various asset types can provide stability and growth opportunities even in changing market conditions.
- Taking Control of Your Finances: Mike's journey reflects the power of taking control of your financial destiny. He shares his transition from working a full-time job to actively building his real estate portfolio on the side, proving that with the right mindset and strategies, it's possible to create a path to financial freedom.
- Raising Capital and Adding Value: While Mike has been successful in his investments, he's also on the verge of taking the next step—raising capital from investors. He discusses the importance of educating potential investors about real estate opportunities and being transparent about risks and returns. By doing so, he aims to help others achieve their financial goals through real estate.
Mike Holdwick | Real Estate Background
- Managing Partner at Pro Team Commercial
- Portfolio:
- 5 commercial buildings (industrial, office, retail, medical) and 1 AirBNB totaling 40k sq ft
- Based in: Suburban Detroit, Michigan
- Say hi to him at:
- Best Ever Book: 4-Hour Work Week by Tim Ferriss
- Greatest Lesson: Being asset agnostic and maximizing the potential of your portfolio is the best way to create long-term wealth.
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Transcript
Narrator:
Quick disclaimer, the views and opinions expressed in this podcast are provided for informational purposes only and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to bestevershow.com.
Mike Holdwick:
The part that really speaks to me about real estate is the multiple ways to make money. So I like using the acronym PACT. You get the principle, you get the appreciation, you get the cash flow, and you get the tax advantages.
Narrator:
Welcome to the best ever show the world's longest running daily commercial real estate podcast. Our hosts interview commercial real estate experts every day to get you the best advice ever with none of the puppy stuff.
Ash Patel:
Hello, best ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Mike Holdwick. Mike is joining us from suburban Detroit, Michigan. He is the managing partner Pro Team Commercial they are value-add commercial investors who self-manage their portfolio of more than 25 Tenants Mike's portfolio consists of five commercial buildings Industrial office retail medical and one Airbnb totaling 40,000 square feet Mike Thank you for joining us and how are you?
Mike Holdwick:
Fantastic, Ash. How are you? Thanks so much for having me on this is amazing.
Ash Patel:
I'm very well. I'm glad to have you here Mike, before we get started, can you give the best ever listeners a little bit more about your background and what you're focused on now?
Mike Holdwick:
Absolutely. I'll probably just start with a little bit on my personal background. So like you said, I was born and raised in suburban Detroit. Grew up in a blue collar family. My dad was a construction worker, road builder, and my mom was a hairdresser. So very much a hardworking family. And I ended up going to college and studying civil engineering and got into the infrastructure space too. And still to this day, I'm actually in that corporate job. I work part time, four days a week and manage my portfolio, typically on Fridays. So kind of use that W2 income to help build my real estate portfolio. And it's going well. As far as my background in real estate, I started in real estate, like a lot of people where we converted our first home that we had into a rental. So my wife and I were moving to our forever house and the first house that we bought wasn't really going to meet that vision of ours. So we ran the numbers at the time and the numbers worked well. It was in 2013 and the economy was still recovering from that great recession. So there were a lot of people with banged up credit and the financials were strong. So we started out with about a thousand dollars a month in that income from our first rental and the rest is history from there.
Ash Patel:
Mike, was that a single family rental?
Mike Holdwick:
Yeah, it was single family rental here in the suburbs of Detroit. And one unique thing about this market being the motor city is that there's a lot of expats that come here from overseas. So my first two tenants in that property were actually from Asia. One was from Japan. One was from South Korea. And the cool thing about that was their rent was fully guaranteed by their companies that they worked for. So that helped ease my nerves because you know how it is when people are first getting into real estate, they're like, well, What if the tenant doesn't pay and what if the toilet breaks and all that stuff? And I just had a sense of comfort from that being backed by the corporation. So I did that for about five or so years and added to the portfolio with the income we got from that. We continued to work our W-2s and just snowballed additional down payments to get more properties under our belt.
Ash Patel:
Mike, we've got to set the scene here a little bit. You talk about this pretty nonchalantly, but 2013, they couldn't give away houses in Detroit, right? And infamous stories on 60 Minutes where you could buy a house for a dollar. They were demolishing entire neighborhoods. Remember? Because you know this, but the fire department was advocating knocking down neighborhoods because they were just fire hazards, right? So did you not look anywhere else? Or what did you know about Detroit that nobody else did?
Mike Holdwick:
Well, Detroit's an interesting market. Like a lot of probably major metros are where Detroit proper inside the city. There's definitely a real estate scene and it's the low end of residential real estate. Like you mentioned, you can buy a house for 20 or $30,000 and you can get into section eight and those types of things. The market that we were focused on was largely the more affluent suburbs, but your point is well received during the middle of the great recession and coming out of the great recession.
The economy was very focused on automotive here. It didn't have much diversification. So the automotive companies were not doing good and prices were really, really good. But 2013, when I got my start was the upswing. That's when things were starting to get traction again. So there was a lot of value add potential there. The first property that I talked about, we bought for two 35 or so, and it was 2200 square feet, finished basement, four bed, three and a half baths. So this is a nice house in a nice neighborhood that families wanted to be in. And I started renting it out for $2,400 at the time, which is a lot more than probably $2,400 goes for now, but I think my payment was 12, 1,300 bucks. So I started my real estate with $1,000 a month in that cashflow and I was hooked. From then on, I was absolutely hooked. There was no turning back.
Ash Patel:
Do you still own that property?
Mike Holdwick:
No, actually I ended up selling that property and 1031-ing it into my first commercial property. So that was part of my journey. I struck up a relationship with someone who had been a commercial broker and he's still my business partner to this day. And he had convinced me that the commercial space would probably be a better fit for me. And I think what was behind that was just running the numbers on what my financial freedom number was.
It was going to require a lot of single family homes. So I was looking for a way to scale more. And when I sold out of that first property, I 1031 the proceeds and bought a single tenant medical building. And that was the catapult into my commercial career, if you will.
Ash Patel:
What did you sell that single family house for?
Mike Holdwick:
So, like I said, we bought it for 235 in 13. I think we sold it in 18 for 380, something like that. But with the equity we had in it, I walked away with 200 K, which was a good down payment on that first commercial building, which we bought for 440. So we stepped into it with a really good equity position and a good tenant was a medical tenant that had been there since the fifties. And they were actually paying at the time I took over that lease $6,500 a month for something where my payment was two something thousand dollars with a 15 year note on it. So I built that snowball of the first single family home became a commercial property and there was more cashflow stepping up that ladder and a lot of education, obviously learning about the different lease types. It's a triple net lease with some landowner responsibilities. So a lot of good lessons learned and learning there, but also financially very successful on that first property.
Ash Patel:
On the single family house, you met the 1% rule. You're renting it for approximately 1% per month of the purchase price. On the medical building, you're at about 1.5%. So the profit is significantly higher. And was it triple net? What were the landlord responsibilities?
Mike Holdwick:
The lease was a little bit unique because it was previously owned by some of the partners of the medical practice. And some had moved on, some had actually passed away, others had no interest in real estate. So their partnership just broke apart and they were selling this.
And it was an expiring lease at the time. So it was a little bit of a fire sale. I feel like other commercial investors didn't want to touch it, but back to your original question, the landlord's responsible for the mechanicals and the roof essentially. So the tenant pays all the taxes. They pay for all the maintenance. So maybe that's a double net lease. You might say it's not a true triple net, but it's been fine. I have to throw a little bit of money out at every single year, but they're a great, it's direct deposit electronically the first of every month and they're not going anywhere anytime soon.
Ash Patel:
Yeah. You know, the cool thing about medical tenants, unlike restaurants or retail or any other type of tenant really, is that their rent is such a small percentage of their revenue. Yeah. I think restaurants, there's a rule of thumb where rent shouldn't be more than 10% of their revenue. For medical practices, it might be 2% of their revenue. So it's a very insignificant expense for them. It's not like sales were rough this month. We didn't see enough patients. So we're not going to be able to make rent. That doesn't happen. So medical tenants are great. They're very sticky in that if this group ever left, I bet one of their competitors would love to come in and get that residual patient base. Did you renew the lease under due diligence or did you buy the property and hope they were going to renew?
Mike Holdwick:
Yeah, great question. Cause that's a big part of the story on this property. There was some risk there because I think there was- That's never good when there's a story behind something. Yeah. Well, it starts with building that relationship. At the time I took over the property, there was about a year and a half left on the lease. And it started with building the relationship with the managing physician who oversees the radiology practice.
Getting to know the head nurse, the property manager, they have an overall management team for that and really building that relationship and becoming part of their team to create that win-win. Since that point in time, they've renewed twice on short-term leases. So I'm living two years at a time. But the thing that I like about this property is exactly what you mentioned. If they're not gonna be there, there's a good chance that another physician would like that. It's on the main thoroughfare through gross point, which is an affluent suburb in Detroit. So it's got a lot of good fundamentals behind it. And another cool thing is it's in an older part of town and they've actually combined three smaller buildings together to make one building. So part of my backup, backup plan is if I ever needed to exit out of that, I could actually offer that back as three individual tenants, which I like from a diversity standpoint. You don't have one payer, you have three payers, little bit more management, but there's good demand in this area. And I actually own some parking, which is in short supply around here as well. So there's an inherent value in having that.
Ash Patel:
Mike, you probably know this, but medical buildings trade at a much lower cap rate than similar asset classes based on your NOI today and a reasonable cap rate. What do you think that building is worth?
Mike Holdwick:
If I had to put a number on it, I'd say somewhere in the low sixes and I bought it at 440. So it's been a good investment. And the cool part is I've been paying down on that loan too. So my goal, maybe I'm a little different than some other commercial investors. I want to try to pay for my properties. And then I set up lines of credit on the backend to support future deals. But my vision is to kind of get all this stuff paid down and have them free and clear.
Ash Patel:
Something that I heard you say during your intro is that you use your W-2 to buy more real estate. Have you thought about raising capital?
Mike Holdwick:
I have. That's been one of my goals for the last couple of years. And that was part of the reason that I was so excited to talk to you today, because I've listened to a number of podcasts that you've both hosted and been a guest on and it's amazing how similar our path is coming from that W-2 more technical profession background getting into commercial, being in that value add commercial space. And then I think the next step for me is that syndication route. I'm trying to branch out, get more active on social media, do podcasts like this to really open up about my journey and some of the successes that I've had to build confidence from other people that they can invest with me and my business partner and take that next step because
We've invested a lot in the knowledge that we have, but as you know, at the end of the day, sometimes the money that you have, your own money runs out eventually, right? So that capital can't always be there. And if we want to accelerate things, it's a natural next step, I believe.
Ash Patel:
Let's circle back and we will deep dive on the capital raising. But I'm still really curious about your other assets that you have. Question before we get into those, why did you not go the the traditional route you go from single family to duplex to four to 16 to 50.
Mike Holdwick:
Yeah. I think a big part of the why behind why I got into commercial can help explain that. I was still working a W2 job, still am. And there's a lot of time that comes along with that. The year that I started our real estate journey was the year that we had our first child. So I had a daughter born in 2013 and a son in 2015. So there's just a lot of busy there. And I didn't want to deal with being hands-on with the management of multifamily, leaky toilets, whatever the case may be, there's a million reasons why you don't want to deal with that many tenants. So my vision was bigger properties, less hands-on. If there's an issue with a business suite, it's not the end of the world.
There's less urgency that comes along with that. So it was really just being efficient with my time and trying to manage all the different things that come with life and multiple businesses.
Ash Patel:
You were smarter than I was. You actually had some evidence behind your reasoning. My reason for going commercial instead of residential was I just saw that commercial tenants add money to my building. They fix up my properties and I was blown away.
I don't think I was smart enough back then to figure out the time involvement, but you're right. It's just such a hands-off approach relative to residential. Tell me how you got into industrial office and retail.
Mike Holdwick:
My business partner, who was my original broker on a lot of the first commercial properties that I did, focuses on industrial. So he's always been a big advocate of the industrial space. Going back six, seven years even. So he's always looking at industrial deals and we'll bring anything that's value add to my attention. So that was kind of the why behind the industrial, but I also like the idea of having a diverse portfolio of properties. I think if there's one thing that COVID taught us, it's that black swan events can happen and disrupt any given asset type very quickly.
Look at what's happened to big office in downtown city centers like San Francisco. And I think most major metros, you're seeing a big pullback with the work from home movement. So I think that diversity, there's strength in the diversity. So that's why I like having some industrial, some office, some medical, I've got one strip mall that's got some retail slash flex spaces that actually does have an apartment above it too. So that's my one residential unit, if you would. But I more chase the return and chase the deal than I do the asset class. I know other people look at it differently and they're like, no, I'm only multifamily or I'm only whatever it is office. But to me, it's more about the numbers. I guess just being an engineer and a numbers guy, I'm looking for those home run deals like you are the high yield. If I can get 15, 20% on a deal, I like that way better than something in the single digits. You're just not going to scale fast enough if you don't hit a few home runs.
Ash Patel:
Yeah, you're right. We are very similar. Isn't it amazing when you talk to other investors, whether they're real estate or not, and you tell them you're searching for 20% cash on cash, and they're like, I don't believe you. It's too good to be true. Amazing, right?
Mike Holdwick:
It is. I think the part that really speaks to me about real estate is the multiple ways to make money. So I like using the acronym PACT. You get the principle, you get the appreciation, you get the cash flow, and you get the tax advantages. All the properties that I've owned, as far as taxes goes, I've done cost segregation studies, I've accelerated that appreciation. So that essentially wipes out all the taxes that I owe on any of the real estate. So when you're making money tax-free, that's mostly passive. You're getting cashflow every month, they're appreciating in value, and then you've got that hidden benefit, which is...Each of these properties are getting paid down by the tenant, a couple thousand dollars a month. So you look up at the end of the year and if you have a portfolio of five, six, seven properties, you've made 30, 40 grand just in pay down right there. And there's three other ways to make money on top of it. So I just love that multiple streams of income from owning one property.
Ash Patel:
Mike, what's the retail building that you have?
Mike Holdwick:
The retail building that I have, it's a three unit strip mall. It's on a major thoroughfare. It's a five lane highway. 20, 25,000 cars go past it a day. And honestly, the building was a mess. I bought it in the middle of COVID and it was a fire sale. The owner of the building went out of business. He had no tenants left because he was an awful landlord. So it was completely vacant, but it was eight something thousand square feet of decent real estate, not in great condition. It needed some improvements, but I had a plan for that. Like you said, I was gonna partner with my tenants and improve those spaces, but I loved the price. It was 235, 240, something like that. And when I put the pro forma together, even at a conservative cost per square foot per year, you were looking at a building that could easily bring 70, $80,000 in income. And there's almost no maintenance needed. It's all parking lot and building. So there was huge value add potential in that. And over the last three years, I've rent stabilized it. Every single one of those units is full. All the tenants pay on the first of the month through my property management software has direct deposit and it's been a great, great property.
Ash Patel:
How did you get tenants into a vacant building?
Mike Holdwick:
Well, I used a broker through the previous broker relationship that I had, and I offered attractive rates. I brought people in that were looking to establish business. These are small business owners. There's a photography studio. There's a dog groomer. There's a lady who actually repairs horse blankets. So Equestrian is big in this area. So she washes and repairs horse blankets. So you've got tenants that are core businesses in the community. And offered good rates and just was friendly when they called. Make them feel like I'm one of their partners is my approach.
Ash Patel:
What do they pay on average per square foot in rent?
Mike Holdwick:
That building, let me think for a second here, I try to get about $15 to $18 a square foot a year on those properties. So I kind of look at it like a buck and a quarter a month. So if there's 1500 square feet, if you can get close to a couple grand a month, 1800. That's a win for me.
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Ash Patel:
So this is incredible. Let's put this in perspective. You purchased 8,000 square feet for $235,000, essentially $30 per square foot. And then you're getting 15 plus per square foot as rent. So if you bought this for all cash, more or less in two years, your rent will have paid you back fully. That is amazing. And when we look at this relative to other asset classes, multifamily, for example, you could be buying for $150, $200 per square foot, and you might be getting $20 per square foot in rent. I mean, this is unheard of in most other asset classes. So a 50% return almost. Unbelievable. So great work on that. And your tenants, this is what I love about neighborhood retail is your tenants are internet resistant, recession resistant. Everybody needs dog groomers. Those neighborhood strips with the pizza place, the deli, the insurance place, they're not going anywhere. Amazon's not putting them out of business. People still need to get their hair cut, dog groomed during a recession. Good for you. I love the path that you're on.
I want to circle back now to a few things. Your medical building, you purchased it for $440,000. You're getting $6,500 per month in rent. And the tenants are paying taxes and insurance. Do you know what your NOI is? If not, let's do some rough math and figure this out.
Mike Holdwick:
I'm a numbers guy. I do not know all the NOIs. I feel like so. But I appreciate it.
Ash Patel:
Yeah, let's talk about it. You're getting $6,500 per month in rent. And your only expense is maintenance. Is that right?
I'm a numbers guy.
Yeah, that's right.
Ash Patel:
Okay. So would you say you put $10,000 a year in the maintenance?
Mike Holdwick:
Somewhere between five and 10, I would say last year I did some roof patching and once in a while there'll be some repairs on it. An AC unit or a furnace, something like that. I haven't had to replace anything big on that property.
Ash Patel:
So yeah, let's use an average of $8,000 per year in expenses. So 6,500 times 12 is 78,000. Let's take out 8,000 for expenses. So your NOI, essentially your net profit before debt service is $70,000. If we divide that by 0.08, you're at $875,000 in valuation at an eight cap. So when you said your building's worth six something, I thought that was low. You've doubled the value of this building. And that's a pretty conservative eight cap for a medical building. You should be able to get that all day long. So you just made a couple hundred thousand dollars on this podcast.
Mike Holdwick:
Well, I appreciate that. Yeah, we should talk more often. Yeah, I mean, those are typical deals. I just look for the value add and sometimes I can't understand why others aren't seeing it the same way that I do. Maybe I just think with a little different mind when it comes to analyzing the risk versus the reward, but these are the type of deals that I love and it's hard for me to understand why people will salivate over six, seven caps without value ads. Cause I just don't see the same potential that I do. And these deals are out there. I know you know that I've heard you talk about some of your deals. They're one-offs. They're not out there on the commercial brokerage sites. They're listed with, like you said, residential agents. They're maybe listed by owner in some other Craigslist or who knows where. So you got to do a little digging to find them. But some of the numbers you can get on these properties are incredible.
Ash Patel:
Speaking with you is like talking to myself. We're a lot alike. Um, but I want to share my capital raising struggle with you for the better part of 10 years, and you've probably heard this. I was fearful of taking other people's capital. I talked myself out of it because I was just too scared. There's no other way to put it. What if something went wrong? And because of that, I walked away from a lot of great deals. I stayed within a small buy box for longer than I should have. And it was when I saw a lot of my high net worth friends making investments in marijuana companies, crypto companies, bars, restaurants, and they weren't getting a return. I realized I would be doing them a favor by letting them into my deals. And that was the mindset shift where I started taking on investor capital and it changed my life in terms of the success that I've had in real estate. So I need you on board with that. Why have you not raised capital thus far? Is there fear like I had?
Mike Holdwick:
It's actually more time availability, probably. I think I really turned the focus to trying to get more into raising capital and I'd say the last year and a half, two years. But honestly, the deals that I've tried to find over that period of time, just haven't been the same deals that I was finding before. The market shifted a little bit. And I think there was a fear behind that because I'm the type of person where my word is my bond. And if I take somebody else's money, I'm going to treat it like it's my money. And I just never found that deal where I was, yes, I'm a hundred percent confident that I could go to my mom, my dad, grandma, a best friend, somebody in my personal network and say, this is a deal that's really going to turn out well. So that's why I'm so excited to talk to you today, because I think the next step in my journey is turning to raising capital because I've built the property management business behind the 25 tenants that I have. I use virtual assistance for social media now managing the property management business. We just hired a project manager to move some initiatives forward that I just can't find time to do. So I think the foundation is there for it. It's just taken that next step.
Ash Patel:
Allow me to respectfully push back. All I hear is a lot of excuses. Here's one thing you have to get over. I mean, very respectful. I think you've got an amazing track record. Here's what you have to overcome. Mike is that your investors know that there's risk in every deal. As much as we want to guarantee their returns, as much as we want to give them money out of our pocket if something goes wrong, your investors are big boys and girls, and they know for higher than average returns, there is inherent risk in each deal. Your job is to lay out those risks. So when you present a deal along with the positives, or maybe even before the positives you present the risks or the negatives. What can go wrong? Paint some what if scenarios in both directions, if things go well, or if we have more economic headwinds. If we have an economic collapse, what does the deal look like? You will never find the perfect deal. So if you're waiting for that, you'll never end up raising capital. What are you doing to speak with investors, to prime the pump for investors?
My guess is very little because you want that perfect deal first, right?
Mike Holdwick:
Yeah.
Ash Patel:
Listen, this is my exact journey.
Mike Holdwick:
Well, number one, I'm going to take time. I appreciate how frank you are in calling me out. And I think there's a lot of truth in it and I take no offense. I think it is taking that next step. My business partner and I are getting there. We're hosting meetups. We're attending meetups.
I'm getting more active on social media. Like I said, I hired a VA to try to just put ourselves out there. I think that's been a major thing is I've been so focused on family, building my own real estate portfolio, running a business as a day job too, that they're just been living under a rock a little bit as far as being able to just get out and communicate and share some of the story. So I think that's an opportunity for me to continue doing that and just take that next step. I think. That's an important next step and a goal for me in 2024.
Ash Patel:
All right. So I take back some of my criticism. Tell me more about these meetups. That's impressive. So you are taking action.
Mike Holdwick:
Yeah, we're just tapping into our personal network. I wouldn't say it's anything fancy, but we're just getting together with people who are interested in real estate investing. So we're building a CRM with potential investors and then inviting them to meet ups and we'll just have it at the local bar or restaurant, 20 people might show up, something like that. And people are getting interested, but I think we just haven't found that great deal to bring to them yet.
Ash Patel:
Okay. So now I am impressed. That's not easy to do. That's a lot of action that you're taking. So you are on your way for the people that are not local. I would advise sending out a newsletter and send it out to everybody. Anyone who's ever sent you an email gets a newsletter, just like Oprah, right? Everyone gets a car. Everyone gets a newsletter. You sent me an email two years ago. You get a newsletter. Let them unsubscribe if they want to, but start sending newsletters so that you are closer to the forefront of their thoughts when it comes time for them to consider investing in real estate and always lead with value, share your journey.
Look, you are a W-2 full-time employee who's built an incredible portfolio on the side, shares some of these wins and lessons learned with people, share the commercial world to many who have only been exposed to residential or multifamily. So you've got a tremendous education opportunity that you can provide in these newsletters. That primes the pump. So when you do have a deal, you're ready to present it. And you have investors that already know, like, and trust you.
Mike Holdwick:
Yeah, I appreciate that advice. That's what I'm going for. I think the action part of that is next though.
Ash Patel:
Yeah, look, you're on your way. And again, I'm impressed because I thought you were just like me. I get to call you out because I'm the master of excuses. I'm great at diverting attention and blame, and I can make excuses that fly, which is not a good quality. But you're on your way, you're doing it. You're just there, you just have to find the deal. And it's not gonna be the perfect deal. It's going to be a deal that you are comfortable putting your own money into. And therefore, you should be encouraged to get investors in on this deal because you're helping them grow their money. Very few high net worth people know how to consistently grow their own capital. It's amazing how many business owners are masters at their craft, lawyers, doctors, again, just true masters at what they do, have very little financial literacy. They just never took the time to understand it, learn it or level up when it comes to investing their own money. They rely on somebody else. How often I've heard when I ask somebody who invests your money, I got a guy. Who's your guy? I don't know. My dad used the same guy. I use him. How does your guy do? He does good, I think.
Well, how do you do last year or last quarter? I think you did pretty well. You have no idea because you get a quarterly statement and you glance over it. If your balance goes down, you make a phone call and the guy's like, don't worry, the market will recover. People will trust their life savings to somebody who gets paid commission based on how they invest their money. They get kickbacks on what funds their money goes into.
Isn't that amazing? The financial person typically has their own best interest in mind versus the end user. And really, it's just amazing how there's all of this money out there and people aren't taking control of their own capital. So you are really doing them a favor when you find ways to consistently help them grow their capital. So you've got to embrace that mindset in that any investor that comes in on your deal, you are doing them a favor because it is in fact a great deal that you would put your own money into.
Mike Holdwick:
Yeah, I appreciate that. Isn't it amazing how comfortable people get with the idea of owning equities and other assets which value can literally go to zero if the company went bankrupt or had some black swan event. But I feel from people that they perceive real estate investing is risky, but you've got to keep in mind that investment is underwritten by a physical asset that they can't reproduce for anywhere near the cost that you're buying that asset out. I love the fact that construction is getting so expensive because that just means the buildings that I own right now are worth that much more because if somebody wants to move into that property or their other option is building a new property, they're going to look at mine and say, well, that's going to be half the cost, at least for Mike, than it will to build one and finance it ourselves. Why would we do that? So there's great fundamentals with all this inflation that's being created by the government printing money to continue the upward trend of real estate values. So I'm taking a very long-term view of it, but I love where I'm at with my portfolio, neighborhood offices, like you said, flex spaces, industrial, medical building, there's just a lot of strength in that diversity and the asset types that currently own.
Ash Patel:
Mike, I love what you just said, and this needs to go in a newsletter. When you talked about investment that's underwritten by a physical asset, if you look at how a lot of stocks trade, they typically trade for, let's say, 10 times their earnings. So they're banking on the future of the company for less than it takes to recreate that. That's a great analogy. And that needs to go in your newsletter. And then after you start raising capital, come back on the show and I wanna hear about that journey. But for now, are you ready for the best ever lightning round?
Mike Holdwick:
Let's do it, Ash.
Ash Patel:
All right, Mike, what's the best ever book you recently read?
Mike Holdwick:
It's an OG, I'm sure a lot of people say it, but for me, the four hour work week was just a game changer in terms of mindset.
I read it a year or two into my real estate journey and that book really allowed me to value my own time and to save my own time and just think about time differently and how I could find the time to really get ahead in life and then make the investments that I needed to make. Because before that I was like everybody else, I was bogged down by the day to day by kids, by jobs and I needed to find the time through efficiency tools to create the opportunities in real estate that I've done. So that book was a game changer in terms of mindset for me.
Ash Patel:
All right. Four hour work week and you're currently working four days in your W2. So you're 10% of the way there. Yeah, there you go. But once you start raising capital, I want to hear how many hours less that you're working. Mike, what's the best ever way you like to give back?
Mike Holdwick:
I like to get back through education. Um, I've learned so much on this journey through real estate, and I'm really passionate about taking that next step that you've suggested and helping other people achieve what I've achieved through real estate because real estate changed my life. There's no other way to put it. I think about my life differently. I feel different every day when I wake up, and I want other people to achieve that because I see a lot of people around me that are just not happy in their jobs, they're not happy with their day to day. And I've helped find deals that I didn't close on that I lined up for my friends that they've closed on. So I haven't necessarily got investors for those deals, but I've passed them off and they've been winners for them. So going forward, that's really what I want to focus on is helping other people change their life in that way.
Ash Patel:
And Mike, how can the best ever listeners reach out to you?
Mike Holdwick:
The best way to get ahold of us is probably LinkedIn. I'm pretty active on LinkedIn. You can find me at Michael Holdwick. We've also recently got into social media. Instagram is probably where we're most active that handles at Pro Team Commercial. So we're doing a little blog series or vlog series right now on a property that we're flipping on a lake and intend to convert into an Airbnb. So that's been kind of a cool project that myself and my business partner have done, but yeah, I'd say LinkedIn or Mike at ProTeamCommercial.com, all one word for email.
Ash Patel:
Mike, this was a very enjoyable conversation. It's like talking to myself. I love that you are asset agnostic and that you're just chasing high returns and quality assets. So thank you so much for your time today.
Mike Holdwick:
I can't tell you how much I appreciate the opportunity, Ash, and look forward to doing it again in the future. I've got a follow-up, an IOU for you on investing in the future.
Ash Patel:
You absolutely do. And best ever listeners, thank you so much for joining us. If you enjoy this episode, please leave us a five star review, share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a best ever day.
Narrator:
Hi, best ever listeners, Joe Fairless here again. And one last thing before you go, would you like to receive a short weekly email with proven tips from experienced investors, free tools and resources and a roundup of the week's most relevant news and best ever content? Well, if so, join the community of nearly 15,000 commercial real estate passive and active investors who receive the Best Ever newsletter. Just go to bestevercre.com forward slash access and you'll get the very next one. I hope you enjoyed this episode and as always, thank you for listening and have a best ever day.
