136. REAL DEAL: The Ultimate Guide to Buying a Mall

Summary

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Real Estate Investing School Podcast

Episode 136: REAL DEAL – The Ultimate Guide to Buying a Mall

Date: February 29, 2024
Host: Brody Fawcett
Guest: Jay Borgana

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Overview

In this “Real Deal” episode, host Brody Fawcett interviews Jay Borgana about his recent purchase of a Minnesota shopping center (“mall”)—a complex but lucrative investment that illustrates the skills, mindset, and strategies required to acquire large commercial properties. The discussion covers everything from finding the deal and navigating environmental challenges, to negotiating financing, optimizing operations, and the critical role of building relationships with brokers and banks. The episode serves as an in-depth, actionable guide for real estate investors looking to scale into bigger deals.

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Key Discussion Points & Insights

1. Deal Overview & Initial Challenges

(02:22–05:18)

• Jay acquired a shopping center in Minnesota, about two hours from Minneapolis.
• The property had languished on the market for 150+ days, mostly due to environmental clearance issues stemming from an old gas station.

  “The deal became like…too good to be true…But we dug into it and found the biggest issue was environmental clearance.” (02:44–03:07, Jay Borgana)

• Jay hired a consultant, confirmed the clearance was just a paperwork process (~$25K cost; 6-12 months), negotiated with the seller to hold $50K in escrow for this purpose, and secured an $80K seller credit for roof repairs.

2. Deal Metrics and Outcome

(05:18–06:02)

• Purchase Price: $1.65 million
• Down Payment: About 20% (~$323K to $340K, with cash-to-close even lower due to credits)
• Current Value: $3 million post-clearance and stabilization

3. How Jay Found the Deal

(06:04–08:14)

• Found on Crexi (commercial property platform, like Zillow for commercial).
• Deal was listed with a broker—a “young hustler” motivated to close, providing Jay with key insights and help.

  “It wasn’t an experienced broker, it was just a young guy…driving two and a half hours away to get this deal done. He really wanted this to close.” (07:22–07:55, Jay Borgana)

Brody’s Reflection:
Deals can sit for months and still be great opportunities. Not all good deals are snapped up instantly. Build relationships and look beyond “off-market” myths.

“We have this misconception that all of the good deals get snatched up right away…That’s awesome.” (06:29–07:07, Brody Fawcett)

4. Finding and Evaluating Deals: Pattern Recognition

(08:50–10:25)

• Jay’s tip: Set up online searches, reach out to brokers, always ask for info and financials; each rep builds your pattern recognition.

  “I think that’s the biggest thing is developing pattern recognition. So when you see the great deal, you recognize it…those reps over a period of time…give you that ability.” (09:13–10:25, Jay Borgana)

5. Financing: Tactics, Relationships, and Negotiations

(10:59–21:45)

• Financing: Conventional, 20% down, local bank, 25-year amortization, 5-year rate resets.
• Jay’s advantage: Previously worked with the bank’s loan officer, built rapport, which later transferred to working with the bank president.

  “I had history with that person, so it kind of transferred. And number two, I got to spend time with these guys and prove I’m a good operator…so I built a lot of trust, which made it a lot easier transaction.” (13:36–14:03, Jay Borgana)

• Brody’s Insights: Build banker relationships in person, ask lots of questions about their lending policies rather than pitching yourself—a strategy to build trust and control the conversation.

  “Most people think the opposite…‘I need to talk about myself so they realize how qualified I am.’ No, no, no.” (16:08–16:20, Brody Fawcett)

6. Commercial Loan Flexibility and Negotiation

(19:19–21:45)

• Local and portfolio lenders have more flexibility on terms (amortization, rates, LTV) than big national banks.
• Shop widely: “Talk to 5, 10, 15, 20 banks…just keep talking to as many as possible.” (19:19–19:29, Jay Borgana)
• Jay uses competing bank offers as leverage (“Bank A will do X, can you match?”), arming loan officers to advocate for you internally.

7. Reputation and Local Networks Matter

(21:45–22:19)

• Jay and Brody stress: In small communities, a good reputation among lenders and community members paves the way for smoother transactions and approvals.
• “Don’t screw anybody over. It’ll come back to get you.” (22:15–22:19, Brody Fawcett)

8. Prospecting for Banks as Diligently as for Deals

(22:25–25:10)

• Jay treats lender outreach as prospecting. Bank rejections are never final—circumstances and leadership change; keep checking in regularly.

• Find out why a deal was rejected and use that info to refine future pitches or return later.

  “Do not take a no as a permanent no, it’s a temporary no.” (24:03–24:07, Jay Borgana) “You have to prospect lenders just like you prospect deals.” (24:14–24:17, Jay Borgana)

9. How Jay “Forced” the Deal (Value Add Strategies)

(26:20–29:57)

• Environmental Solution: Solved paperwork and compliance issues blocking the deal.
• Lease Restructuring: Standardized and cleaned up a variety of bespoke/legacy lease arrangements, shifting utilities and expenses to tenants, improving operations.

  “He didn’t have a simple structure for his leases…some people were triple net, some were gross…It was a mess. So we had to go through, clean that up, put them all on the same terms…that’s the second thing.” (27:27–28:34, Jay Borgana)

• Operational Improvements: Installed professional property management, focused on expense reduction and clear tenant communication.
• Negotiation: $80,000 seller credit for roof repairs was applied directly to reduce cash needed at closing—a flexibility more common in commercial than residential deals.

10. Takeaway Mindsets and Actionable Lessons

(29:57–31:14)

• Relationships and trust with both brokers and banks are as important as deal analysis.
• Regular outreach and smart questioning with lenders uncover better financing.
• Operational improvements (leases, management, utilities) compound deal value after closing.
• The skills to scale up are fundamentally the same as smaller deals—just with higher stakes and more zeros.

  “We just might put a one or a two more zeros on the end of it…It’s the same type of stuff.” (01:38–01:54, Brody Fawcett)

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Notable Quotes & Memorable Moments

• “I’m retiring from a retirement.” (01:27, Jay Borgana)
• “We just realize it’s the same type of stuff, we just might put a one or a two more zeros on the end of it.” (01:38–01:54, Brody Fawcett)
• “It was too good to be true…but we dug into it and found the biggest issue was environmental clearance.” (02:44–03:07, Jay Borgana)
• “Pattern recognition…when you come across a really good deal, you’ll recognize it. Those reps over a period of time are the ones that give you that ability.” (09:13–10:25, Jay Borgana)
• “Don’t screw anybody over; it’ll come back to get you.” (22:15, Brody Fawcett)
• “Do not take a no as a permanent no—it's a temporary no.” (24:03, Jay Borgana)
• “You have to prospect lenders just like you prospect deals.” (24:14, Jay Borgana)
• “He didn’t have a simple structure for his leases…It was kind of a mess. So we had to go through and clean that up.” (27:27–28:05, Jay Borgana)

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Timestamps for Important Segments

• 02:22 Deal overview and discovery of environmental clearance issues
• 05:18 Purchase price and capital raised
• 06:26 How the deal was found (time on market, broker)
• 09:13 Jay’s approach to pattern recognition in evaluating deals
• 11:12 Financing structure and importance of lender relationships
• 16:08 Building trust with bankers through inquisitive questions
• 19:19 Negotiating commercial loan terms using leverage and information
• 22:25 Prospecting for banks and not accepting “no” as final
• 27:27 Value-add strategies: leases, management, and expense control
• 29:13 Negotiating seller credits to lower cash-to-close
• 30:20 Where to find Jay Borgana online

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Connect with Jay Borgana

• Instagram: @jborgana
• Specialty: Business acquisitions, turnarounds, and investments (returns often higher than traditional real estate)

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This episode is packed with real strategies, mindsets, and tactics for taking down big deals—even if you haven’t done one before. Jay and Brody break down barriers and demystify the process, emphasizing that trusted relationships, continuous learning, and operational diligence are key to success at every scale.

Transcript

[A]

What's up, guys? Welcome back to another Real Deal episode of the Real Estate Investing School podcast. This is your host, at least of these Real Deal episodes, Brody Fawcett, and stoked that you guys are here joining us today. So thanks for tuning in. As you guys know, in these episodes, we keep them short. Sweet. To the point we dive into one deal that an investor has done. It's kind of helped move their portfolio along, giving them more freedom. And the whole entire purpose of us talking about it, diving into it, is so that we can extract some information so that you guys can go and replicate it, learn from it, and go create the same type of freedom in your life, in your portfolio. And so today we have an awesome guest. I love this guy. Him and I, we met a couple months ago and we just, we jam that. It was interesting because he starts asking me all these questions about my business. He gave me all this feedback. I'm like, wait, who are you? Like, this is good stuff. And so we have Jay Borgana. Did I say your last name right?

[B]

Yeah, you got it.

[A]

Right on. So Jay is. You're living on Oahu right now, is that correct?

[B]

Yes, correct.

[A]

Cool. And you're not there for much longer, though. You're getting ready to go buy another business. What you love to do and, and move and find the next adventure.

[B]

Yeah, I'm retiring from a retirement.

[A]

That sounds all too normal for a guy like you. You just can't sit still.

[B]

Yes.

[A]

Cool, man. I'm excited to dive into this deal. This is a more. I don't want to say complex, but we'll just say. We'll just say bigger deal than what most people are probably used to hearing about, learning about, which I think is also exciting because it's unique and it also is fun talking about these deals because a lot of times I think we just get in our mindset of, like, I can't do that big of a deal. Because this, that, that, that, that when reality is, we just realize it's the same type of stuff, we just might put a one or a two more zeros on the end of it. So maybe give us just a 30, 000 foot view. What is this deal? What does it kind of entail? And then we'll. We'll kind of dive into it and I'll grill you on it here in a second.

[B]

Yeah, yeah. So it's a shopping center in Minnesota, a couple hours away from Minneapolis. We. It was sitting on the market for about like 160 days. It fell out of escrow a Couple times, just randomly kind of came across it on crexi, reached out to the broker, spoke to him a couple times and wrote an offer. And they had just changed price where they lowered the price, and the deal became like, you know, it went up from like 6. No, it went up actually from like an 8, 9 cap to like an 11 cap. And it was kind of too good to be true type situation. But we dug into it and we found that the biggest issue that they. The deal had was some environmental clearance issues. And that's very typical with commercial centers. A lot of times they may have been like a gas station. There might be. It may have been a gas station on that shopping center. There may have been some, like, mechanic or some type of, like a business that. That emits gases or oils or chemicals. And the unfortunate thing was the gas station was there a long time ago. So the city didn't have any documents about the whole clearance process. They usually have to take out the tanks, the gas tanks. They have to clean that area. They have to make sure that there are no fuel in the soil. And so part of, you know, that's part of like, what the city requires. So we felt, you know, comfortable. You know, put. Put the. Put the deal on under contract and then go investigate. And which we did. We asked the city. We. We had a consultant. They went and did some sample checks, and then they gave us their advice that it's all pretty much going to be paperwork. It may take some time, but it will cost about $25,000, but it can get done within six to 12 months. And so we agreed with the seller that we're going to hold about $50,000 in escrow to pay for that clearance. We'll close the deal before the end of the year, because the seller wanted to close before the end of the year. And it was moving Belize. And we. We get the deal done and we even got some. Some credit. We got like $80,000 credit for roof repairs and which brought our cash to bring in those lower. It was. It was overall a great deal. You know, we got the clearance 12 months. We got a clearance 12 months later, we got the paperwork. Now we're able. If we decide to sell, we're able to sell that deal at a much higher cap. Maybe six, maybe seven, easily.

[A]

Wow. Okay. I love it. There's so much to unpack there. Give us. What was the. What was the purchase price? How much money did you need to raise or put into this thing? Yeah, it wasn't what's kind of the.

[B]

Outcome yeah, it wasn't large. We just needed. It was one. It was 16517. And. And then we brought our own cash. You know, again, like I said, we had to bring less money, so we had to like 80K. So we had 20%. We had to put in 20% down, which is something around three something. 323, 340. We get the 80K. So we brought in two something less. And. Yeah. And then the building, now it's worth 3 million.

[A]

Awesome. Wow. That's legit.

[B]

Yeah.

[A]

Okay, let's. Let's unpack some of that. Let's unpack some of that. Starting with how you found it, because we talk about how you found it, how you funded it and how you forced it and you touched on all those things. But going back to how you found this, you mentioned that it had been on the market for a while already. 60 or 120 days or something.

[B]

Yeah, 150 days. Yeah.

[A]

Or 50 days. And I, I love this because we have this misconception a lot of times of all of the good deals get snatched up right away and if we're not looking, you know, the moment it comes out and it's, you know, an overbidding and overpaying for it, then we're never going to get these good deals. And so I love that right off the bat. And then you also said, where did you find it?

[B]

Prexi Crxy.

[A]

So tell everybody what Crack Crexy.

[B]

Crexi is a platform where just like a Zillow or, or a Lo Net where you can find multifamily commercial properties.

[A]

Cool. And. And it was, it was listed with a broker, you said, which I also like because. Yeah, that's another misconception. We have to find these off market and they don't exist and they're not out there. So that's. That's awesome.

[B]

And it's very.

[A]

Have a system.

[B]

It's very interesting because the broker was a young hustler. It wasn't like he wasn't like. It's funny. It was actually not an experienced broker and he was just a young guy who just started, I think it was his second deal. He just started in commercial real estate and all he was doing was cold calling for deals. And he found he was able to get the seller to say, yeah, actually I'm thinking about selling. And he was driving two hours away, two and a half hours away from. He lived in Minneapolis, but he was driving to, to this town two and a half hours away to deal with the seller and get this deal done. So he really wanted this to close. So he gave us a lot of insight, give us a lot of information. He was very helpful in us getting, getting a good deal.

[A]

Yeah, that's great. Which is, which is huge in general. I mean, I think that's like a, a pro tip right there as far as just if you can befriend somebody for some reason, sometimes you get these brokers or agents that have this, like, I'm not telling you anything. Oh, I'm not. Just put an offer in and then we'll talk, like, we'll see, you know. But I think if you approach it the right way of like, hey, we're on the same team. We both want this thing to, to close and to go down. And I think if they feel that, especially if it's a property that's been on the market for a little bit, it's like, hey, let's, let's work together to, to figure this thing out, right?

[B]

Yeah, yeah, absolutely.

[A]

So good. Okay, so. So once you found it, which one more question on that. Do you have, like, a system where, you know, every day you're spending this much time kind of looking through these, you know, different online sites where things are for sale or what. What's kind of been your, your biggest tip for everybody in finding good deals?

[B]

Yeah, I would say, I would say it doesn't have to be like too much. You could just have searches set up and just look at those searches and dig into them and then ask information. If you see a deal that looks, I think like over time, as you look at deals over and over and over, like over a period of a year or so, you develop a pattern recognition for things. And then what I always recommend, if you see something interesting, reach out to the broker and get the details, get the financials, get, if you need to sign NDA, it's fine. Get the financials, get the information, call and ask questions. It's only going to be good education. So when you actually come across, when you come across a really good deal, you'll recognize it. I don't think. I don't. It's very hard to recognize. I think that's the biggest thing is developing the pattern recognition. So when you see the great deal, you recognize it because you might come across it and not know. And those reps over a period of time are the ones that actually give you that information, give you that ability to recognize value.

[A]

100%. I love that. Couldn't agree more. And we're going to dive into this more and so how you forced it. But those reps also probably gave you that ability to look at this deal, even though it's been on the market already for a while, and think like, okay, this is actually a really good deal and this is how. Right. You're going to look at it differently because you've put in those reps and you recognize different things that somebody else might not recognize. Let's dive into how you finance this thing. So you said the. The total purchase price was 1.65, I think, is what you said.

[B]

Is that right? Correct.

[A]

And then you mentioned you put 20% down or you raised 20%. What was, what type of financing was this? Was it just a bank that financed the other 80%?

[B]

Okay, yeah, it was conventional. Conventional local bank that. That financed it. Yeah.

[A]

Great. Awesome. And for everybody listening, what. What's a typical term with a commercial property? With the bank, obviously you got it for 20% down. What's kind of like the amortization period? Is it a fixed rate?

[B]

Yeah, so usually. So this one amortized over 25 years. It's a fixed rate. It was in the threes, you know, when the rates were lower. And it renews every five years. And so every five years you have to renew that loan. It was very interesting because this was also an interesting story and which I recommend people to spend a little bit more time talking to lenders. I've had another commercial center in the area, and I've done the deal with another bank, and I called that same loan officer to work with because he was great to work with and it was easy to work with. So I called that same loan officer and I found out that he left the bank and he went to a different bank. So I tracked him down and I found him in the other bank and then I gave him the information of the deal. He remembered me, knows me. So I was like, great, yeah, we'll do the deal. Absolutely. You know, we started the financing process and then I went to see the property. I flew out there to see the property and I told him, hey, I'm going to be in the area. Let's go grab lunch. And he says, well, yeah, why don't you. Let's meet at my branch. I'm going to be at the branch on this, you know, this time. Let's meet there. And then so I went to the branch to meet with him, and then he introduced me to the CEO of the bank. And then so I met the CEO and we talked. We sat in a big, large boardroom and we talked for an hour or so about the economy, about business, about everything in general. And then at the end of that conversation, the loan officer told me, well, actually, I'm actually leaving this bank, I'm going somewhere else. So the president of the bank is going to take over the loan. He's going to take care of you from now on. I'm like, okay, fine. I got along with the guy, so it was great. And I talked to him, I worked with him for a little bit, and the transaction could not be easier. So it was even much better experience than the first time. But I think there was a big plus that, number one, I had history with that person, so it kind of transferred. And number two, I got to spend some time with these guys and then and prove that I'm a good operator, that I'm someone that knows this stuff, that someone has been there, done that. And so I build a lot of trust, which made it a lot easier transaction and never had any issues, like even today, like I get emails and calls from them all the time saying, hey, if you have any other deal, we want to do it, we want to finance it for you. Do you have something? So, so I think spending the time and this is something that I've always done. And whenever I invest in a certain area, I would go and cold call or door knock banks all the time and just set up meetings or just pop by and just say, hey, who's your multifamily commercial loan officer here? And then they'll look at me weird and they'll say, well, wait a minute. And then they go find the branch manager or they found, they find the guy who does commercial stuff and then I'll go to his office and I'll spend an hour, you know, talking to them and building a rapport, which I think is a super valuable thing. Another, another thing to do when you do that is when you first walk into that office and don't talk about yourself, walk into the office with an inquisitive mindset. Meaning if I'm walking to, you know, the head of commercial real estate in Bank A, I mean, I'm thank him for taking the time to meet with me and ask them, you know, tell me a little bit about, you know, how long they've been here, how long he's been working for the bank, what he's done before that, how, you know, how does the evolution of the banking industry is done, how's the evolution of the commercial real estate has been where the. What is the bank, you know, confident and comfortable with financing what kind of assets, what kind of operators, and then what are they not doing? You know, how long does it take for them to finance things? Do they have to go through a committee, like, just to go through. As, you know, the more questions you ask, the more you validate how good you are, what you do, you know, without having said anything about yourself.

[A]

You in control.

[B]

Yes. And you haven't said anything about it.

[A]

Most people think the opposite, right?

[B]

Yeah.

[A]

Talk about myself in order for them to realize how qualified I am. And it's no, no, no, no.

[B]

Correct, Correct. And then you could spend an hour asking questions and then never, never asking you any questions. And then you have. So they think of you as, this is a great guy. He knows so much. He knows more than I do, whatever. And they'll be happy, you know, they want to meet you again and ask you questions now. And they want to, you know, they want to befriend you and they want to work with you. And it's such a much better place to start a relationship than, you know, then just like, just, hey, let me send you this deal. Let me send you my financials. Let me send you a way for you to. It's ping pong of documents and. And wait for you to ask me for a document. And then there's like, there's no trust, there's no this, there's no that. When you do this, when you do, when you spend the time up front, you have so much trust built in. It's a lot easier transaction. You get lot less document requested, you get less friction, you get less everything.

[A]

Yeah, dude, I love that. Yeah, that's so good. So good that I think that applies to just. Not even just talking to banks, but just in general.

[B]

Anything.

[A]

Want to be around people that are acting that way. And it gives you so much more confidence in somebody else's eyes, despite talking about yourself as you think it would.

[B]

Correct. Correct.

[A]

I always remember. I always remember Ed Mylett, he was saying that a lot of times he'll go golf with somebody that doesn't really know who he is. It's maybe a mutual friend, and they'll play an entire round of golf. And he's like, after we get done, you know, I was like, hey, thanks. That was a. That was a blast. And my friend that introduced us or had us go play golf together, he'll be talking to the guy that played with Ed and, and he's like, hey, I really like that Ed guy. Like, what does he do?

[B]

You know?

[A]

And he's like, we play A whole lot of golf because we didn'. Talk about me. I'm not talking about me, I'm asking questions, talking about them. And they remember how they felt, but they had no idea what he did. So I love that dude. As far as once you got it financed and this is so good too because I've been chopping around today just calling a few different banks and on the commercial lending side of things. And so it's like I think exactly what you said, there are different terms with different banks, you know, which it's good to understand and realize and you're making your notes and like you're gathering that information and they can tell you all of that stuff on the phone and you can do your research and that's. I like that you said it's on a 25 year amortization schedule because like that's something I always try and negotiate. A lot of times they'll tell me, hey, it has to be on a 15 year or the max we'll do is a 20 year. Well for me I'm okay paying it even a little bit higher of an interest rate if I can get it on that least 25 year schedule because my payment's going to be so much lower, I'm going to cash flow so much more, right? My numbers are going to, returns are going to be a lot higher. And so, so a lot of times.

[B]

A lot of times banks, especially the banks that will keep the loan, they will portfolio the loan, they won't sell it to someone else. It's not insured by anybody, that loan. They have a lot of flexibility with the terms and all of it. It all depends on the deal. So if it's a, if it's an asset and they like they will, they will work with you. If it's an area, a location they like, they will work with you. If they like you, they will work with you. So it's not necessarily a one size fit all. And a lot of times when you have these conversations, especially when you have conversations, I always Recommend Talk to 5, 10, 15, 20 banks. Doesn't matter, just keep talking to as many as possible. Now when you're talking to a bank and you asking questions and they tell you, oh well, we can do only this. Well that's, I'm curious. That's, that's odd because I just spoke with bank A and they told me they could do blah, blah, blah. I was like, well we can do that too. For the right deal, we can do that too. We just need to see the, you Know the financials. I was like, oh, what do you want to see in the financials? Well, I want to see the dscr, what it's going to be or whatever. Well, I can tell you the DSCR right now. I did it at X rate and it's, you know, one or two, whatever. And I was like, oh, well, if it's at that rate, then we can do. You know what I mean, what the other guy said, you know what I mean?

[A]

Right. So it's all a game.

[B]

Yeah, yeah, but and also, it also, you have to think you're dealing with loan officers that, that want to get paid as well. They make money, they make a bonus or they make or. Or they. It's part of their ranking within their, their bank to. To do loans, to do good loans. So by you giving them tools, giving them more information, me telling them that bank A was supposed to. Was willing to do something, you're giving that loan officer ammunition to go to his underwriter or to go his loan committee or to go to his boss and tell them, listen, we got to do this deal because if we don't do it, bank A is going to take it. And they already know Bank A. They already know they're in competition with those guys, and they already know what those guys do to get their business that differentiate them from them. So you create that sense of like, okay, I'm giving this person more information so they can go advocate for my loan with their team or with their bank.

[A]

Yeah, dude, that's so good. And we had one too, a couple years ago where it was just a community bank, you know, in our town, and it was our first time working with them. But when they took our loan to the committee, they're like, oh, literally the, the broker came back and he was like, there was multiple people on the board that knew you guys in the community and they had great things to say about you. And so, like, we're excited to like, take on this project.

[B]

Yes.

[A]

And so it's like you don't realize how those little things go such a long ways.

[B]

Yes.

[A]

And just how many different things play into it, you know? So, yeah, don't screw anybody over. It'll come back to get you.

[B]

Correct. Yeah. They're human beings. They're human beings and they're dealing with other human beings. And they're only so much they can do to alleviate from the risk of default. That's what banks are trying to do is they're trying to make some money, but they don't want to, you know, A defaulting loan. And so they're making their best judgment based on who you are, based on information that's available to them. So the more information you give them, the better. And I like, I like to go, if I'm in a town, I like to dedicate a day where I go to lunch with a banker every. Every week. Every week or every two weeks I'll go to lunch with one or two. I'll go to an events where there will be bankers there. And I just want to understand one of the things that happens a lot is that you may go to a bank and they'll say no to your deal because of abc. And you always want to know why. You know, just tell me why. You know, they don't like the asset, they don't like the area, they don't like the, they don't like your, your profile, not you personally, but your profile. So what by understanding those. And then you go back, you go back maybe six months later and now it's a different person that runs the loan operation or it's a different director that have come from a different bank and in that other bank he had a lot of success with the exact asset that you're bringing in or the exact location that you're bringing in. So that same bank that said no before will be a hell yes today. So or, or let's say they said no before because they had too much multifamily in their portfolio and they're not taking on any more multi, family or they have their, their, their capacity, their loan capacity has its limit and they don't have any more. So you go back six months later, now they have less multi. Less or less or more capacity to lend. So there are yes. So do not take a no as, as a permanent no as a temporary no. Yeah. And then keep having that conversation with all the lenders. Keep checking in, keep finding out. You're almost like prospecting lenders. The same way I think of it, you have to prospect lenders just like your prospects for deals. And you spend the same amount of time and effort prospecting lenders as you prospect deals. And you just try to understand what kind of structures have they done recently, what kind of creative stuff have they done recently. What kind of like really good deals they've seen recently, what kind of bad deals they've seen recently. And that will inform what they're thinking because that, you know, finding good debt, good terms can make or kill your deal.

[A]

Yeah, dude. And this wasn't direction I was planning on this going at all. But I'm glad it went this way just because that is a lot of times, like how you go create a good deal, you know, for. I know cap rate may be a little bit different, but like cash on cash return, when we're talking, how do you get the highest cash on cash return? Well, like, you put the least amount of money in to get the, the highest return, you know. And so if you can understand what financing, financing options you have out there. Oh, man, like, like I say it all the time now, after investing for so many years, I know I could go crush it as, as an ello or go crush it as, you know, any type of financing world because you have to understand the ins and outs of it in order to maximize the investing side of things. And so, yeah, man, I'm glad we touched on that because that is, that's just such a huge, a huge tool right there.

[B]

Yeah. And the higher, the higher the ltv, the more, more property you can buy. So it just makes you a lot more powerful in terms of, like, what you can offer and how you compete for the deal.

[A]

Yep, yep, 100%. And those are a lot of like, the questions that I'm asking on the phone, you know, like, okay, cool, if I hold onto this for a year, can I. You guys going to take the, the new appraised value of that and am I able to cash out on that, or is that recognized towards the build? Like, all these different things you just kind of want to grill people on. And what does it look like in this scenario, that scenario, this scenario, and you start to lear and understand even, even different price points. Like today, a lot of my conversation was, okay, well, what if the loan amount is above 2 million? Like, does that change how much, how much down you want? They're like, yeah, it goes, anything under 2 million is 70%. Any or 30%. Anything above is going to be 40%, you know, so just different things to be aware of. Jay, with this deal kind of wrapping things up, I think you answered it. But as far as how you forced the deal, meaning how you got creative on it and looked at it differently, you touched on you didn't have the right permitting necessary, and you went through the hoops of like, figuring all that out in order to make the deal work, would you say that was where.

[B]

You really forced it in a way that you did? Yeah. So that was the main one. The second one was we discovered through the due diligence period, we discovered that the landlord had different terms, different lease agreements with each of the tenants and all these are all commercial tenants. These are, you know, a restaurant, massage parlor, an education program, you know, an eye, an ear infection doctor, you know, all kinds of, like, all kinds of tenants. So what we found is that he didn't have like this simple structure for his leases. Literally every lease was different. Some people were, you know, triple net, some people were gross. Some people paid for some utilities, but not others. Some. So it was kind of a mess. So we had to go through, you know, over a period of time and then clean that up and then put them on all the same terms, you know, push some of the utilities, push everything to the tenant, you know, you know, review the cam review, review or review our expenses. So also another thing was like going through the expenses, what we're spending the most on, we're spending, you know, and then we put in a really good property manager in place and we put a lot of focus on reducing expenses and keep in and keeping just clean communication with the tenants. So get paid on time and all that stuff. So I'd say that's the, the second thing. But the biggest one, the biggest one was the environmental clearance, for sure.

[A]

And then too, you did say like you negotiated that, that roof and you got $80,000.

[B]

Correct.

[A]

Which I think correct is another huge way.

[B]

Yeah, correct. And that's, and that's also a lot of those credits that you get from, from landlords. That's part of like when you have trust and a good relationship with the loan officer where the bank is not going to say, oh, well, you still have to bring the full down payment. We're not going to take that, you know, against your down payment. So when you have that relationship, they'll say, okay, no problem. You only have to bring in, especially in.

[A]

Com, especially with the commercial, the residential, it's a lot more difficult.

[B]

Right, Correct.

[A]

You want to hold that in escrow and like see that through. But.

[B]

Right.

[A]

Commercial is nice that way where you can get so much of that just taken right off of your, your down payment.

[B]

Yeah, that's huge. Yeah, exactly. So, so yeah, it's been, it's been fun. Yeah, it's been a good deal, for sure.

[A]

That's awesome. I love it. Well, we, I'm, I mean, we could keep on going on this one. There's probably so much to pull out of it, but for the sake of time. Where can people find out more about you connect with? Yeah, Active Instagrammer.

[B]

Yeah, I'm on everywhere. I'm in Instagram, on Facebook, everywhere. So you can find me if you're interested in business acquisition, that's my thing. I buy businesses and I do, I turn them around or I grow them and then sell within a period of time just like we would do a multi family syndication. So if you're interested in investing alternatives and get a higher return, you know, typical real estate returns are 15 to 16%. Typical typical business acquisition returns are 30 to 35%. So happy to talk to anybody who's interested.

[A]

Where's the where? What's your Instagram handle?

[B]

Jborgana@jborgana. So the letter J and the last name organ. I have a very unique name so you won't miss me. Put it on Google. Everything will show up.

[A]

Right on brother. Well hey, thanks so much man for coming and dropping some bombs. Thank you guys for taking tuning in. Feel free to leave us a review, subscribe and we will catch you next week.