Latest / Financial Survival Network / Federal Property Sales = Big Opportunity - Dave Cordea #6265

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Federal Property Sales = Big Opportunity - Dave Cordea #6265 · Financial Survival Network

• 0:00
  Speaker 1: Those pretty you know, they put out a list of
• 0:01
  Speaker 1: a bunch of the federal assets they were going to
• 0:03
  Speaker 1: sell off, maybe all three weeks ago they put that
• 0:05
  Speaker 1: out and then the kind of that website went down
• 0:07
  Speaker 1: and there were four hundred some properties on it. Now
• 0:09
  Speaker 1: there's talk maybe there's eight hundred that they're gonna, you know,
• 0:12
  Speaker 1: bail out of. But uh, I think it's a good thing.
• 0:15
  Speaker 1: It takes underused public property, puts it into the private
• 0:19
  Speaker 1: sector and figure out, you know, what can you do
• 0:20
  Speaker 1: with this.
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  Speaker 2: Then you were listening to Carrie Lutz's Financial Survival Network,
• 0:24
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• 0:28
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• 0:31
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• 0:40
  Speaker 2: Financial Survival Network now more than ever.
• 0:48
  Speaker 3: And welcome you are listening to and watching the Financial
• 0:51
  Speaker 3: Survival Network. I'm your host, Carrie Lutz. Well, you've probably
• 0:56
  Speaker 3: been hearing about Doge. You've been hearing about the government
• 0:59
  Speaker 3: on loading all of these unneeded, unused properties. Even with
• 1:06
  Speaker 3: the government workers going back to the office being forced
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  Speaker 3: back there, there's still tens of millions of square feet
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  Speaker 3: of office space that the government is disposing of or
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  Speaker 3: that it's leasing and that the owners will be disposing
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  Speaker 3: of it. And person you're about to hear from David Cordrey. David,
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  Speaker 3: you specialize in buying properties with problems. Is this the
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  Speaker 3: kind of problem you're looking for? So that's exactly what
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  Speaker 3: we're looking for. Thanks for having me today.
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  Speaker 1: It's a it's going to be an exciting time when
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  Speaker 1: they when they kind of make all these cuts and
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  Speaker 1: reposition a bunch of assets.
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  Speaker 4: Yeah.
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  Speaker 3: So all right, So how do you identify ones that
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  Speaker 3: are good as opposed to others that should just be leveled?
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  Speaker 1: Well, the you know, the really really big assets are
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  Speaker 1: true because if you've got hundreds of thousands of square
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  Speaker 1: feet in a tower or a huge complex, that's that's
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  Speaker 1: hard to find an immediate use for. The biggest risk
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  Speaker 1: on any investment is time. So I'm looking for more
• 2:12
  Speaker 1: of the smaller assets. If it's under one hundred thousand
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  Speaker 1: square feet and it's something that has decent bones to
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  Speaker 1: start with, that's a piece of property that you can
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  Speaker 1: you can probably convert it to something relatively quickly in
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  Speaker 1: the grand schemity without doing a big redevelopment where you
• 2:28
  Speaker 1: got to go, you know, build hotels or create a
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  Speaker 1: downtown center or any of that kind of stuff that's find.
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  Speaker 3: A huge purpose. How do you figure out how to
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  Speaker 3: repurpose them?
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  Speaker 1: Most of our strategy is how do we get it
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  Speaker 1: to a usable sized footprint that any kind of local
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  Speaker 1: business would want to use. If you look at some
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  Speaker 1: of these, especially on the government side, we've done a
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  Speaker 1: lot of this on office where you see old call
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  Speaker 1: centers that are called fifty to one hundred thousand square
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  Speaker 1: feet and that those things are gone, it's been replaced
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  Speaker 1: by AI or it's all overseas. So those footprints, we
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  Speaker 1: can pretty easily carve those up into five thousand, fifteen
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  Speaker 1: thousand square foot suites. And then we're we're focused on
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  Speaker 1: just local businesses. Everywhere you go, there's a local business
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  Speaker 1: that's doing you know, they're the ones that are doing
• 3:16
  Speaker 1: your electrical work, they're doing your plumbing work, hvac like
• 3:21
  Speaker 1: that stuff's hard to replace.
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  Speaker 4: It's hard to.
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  Speaker 1: Get talent that can do it, but they all need
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  Speaker 1: the spot that they got to operate out of.
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  Speaker 4: Yeah.
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  Speaker 3: Yeah, so I guess with the danger comes opportunity.
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  Speaker 4: As the Chinese like to say, right exactly, Yeah.
• 3:36
  Speaker 1: Those putting you know, they put out a list of
• 3:37
  Speaker 1: a bunch of the federal assets they were going to
• 3:39
  Speaker 1: sell off, maybe all three weeks ago they put that
• 3:41
  Speaker 1: out and then the kind of that website went down
• 3:43
  Speaker 1: and there were four hundred some properties on it. Now
• 3:46
  Speaker 1: there's talk maybe there's eight hundred that they're going to
• 3:49
  Speaker 1: you know, bail out of. But I think it's a
• 3:51
  Speaker 1: good thing. It takes underused public property, puts it into
• 3:55
  Speaker 1: the private sector and figure out, you know, what can
• 3:56
  Speaker 1: you do with this then?
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  Speaker 3: So one man's garbage is another man's goal.
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  Speaker 4: Is that it? Yeah?
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  Speaker 1: Right, necessarily that's been the business strategy for the past
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  Speaker 1: fifteen years on stuff I've been working on.
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  Speaker 3: You know, this could be like the best thing that
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  Speaker 3: happened since the RTC and they sold off all those
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  Speaker 3: properties for a song and wound up being hugely profitable.
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  Speaker 4: Yeah.
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  Speaker 3: So yeah, you know, going on, when you're looking at
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  Speaker 3: what properties are you looking at that you want to
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  Speaker 3: you know, what's your ideal situation that you're looking at here?
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  Speaker 4: Yeah?
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  Speaker 1: I mean for me, I focus on the southeast, so
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  Speaker 1: I don't travel too far from home. I live in
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  Speaker 1: Atlanta and you know, between Atlanta and Charlotte, there's plenty
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  Speaker 1: of opportunity. So I'm looking for one assets that are
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  Speaker 1: in that Southeast quarter that those would be great. And
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  Speaker 1: then I like seeing stuff that has flexible zoning and
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  Speaker 1: a lot of parking. So if you get real tight
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  Speaker 1: in a city center and you've got a big vertical building,
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  Speaker 1: that's you know, you've got a lot of other stakeholders
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  Speaker 1: in there process that you're going to have to work through,
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  Speaker 1: and me, that's going to take time and that's probably
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  Speaker 1: the right deal for some people, just not for me.
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  Speaker 4: I'm looking for.
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  Speaker 1: More, fewer like institutional stateholders on it around my asset,
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  Speaker 1: and something I can move on pretty quickly. So it's
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  Speaker 1: typically a lower rise building. It's typically a little more suburban,
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  Speaker 1: more industrial type feel. That kind of stuff that I
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  Speaker 1: can find find different users for relatively quickly.
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  Speaker 3: Gotcha, So what's your time frame for taking these buildings
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  Speaker 3: and making them profitable or selling them?
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  Speaker 1: If for most of it takes about eighteen months, that's
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  Speaker 1: our kind of our our go in and work with
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  Speaker 1: the municipality and say, hey, we've got one hundred thousand
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  Speaker 1: square feet of vacant space, and I think we can
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  Speaker 1: we can divide this building up and then least it.
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  Speaker 1: It takes us takes us a couple of months just
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  Speaker 1: to get through permitting and say, hey, what are we
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  Speaker 1: going to do with this thing? And sometimes the cities,
• 5:57
  Speaker 1: the municipalities are like what do we what we trying
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  Speaker 1: to do here? You know, it's a little intriguing on
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  Speaker 1: their end, but ultimately like if the zone in alignes
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  Speaker 1: and it can be done, we can. We can do
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  Speaker 1: the work pretty quickly and then and then find uh,
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  Speaker 1: find new tenants and local businesses that want to use
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  Speaker 1: a space.
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  Speaker 3: So you're looking at office buildings here, what other is
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  Speaker 3: there flex space or their warehouses that you can con work.
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  Speaker 1: Kind of the the more like known terms of that stuff.
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  Speaker 1: You're thinking about warehouse and you've got thirty foot clear
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  Speaker 1: heights and that kind of stuff that's not you know,
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  Speaker 1: that's that's like its own actual dedicated asset class. We're
• 6:35
  Speaker 1: looking for all this stuff that's gray area and in between.
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  Speaker 1: It's like is it office, is it flex? Is it warehouse?
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  Speaker 1: It's like, well, depending on what you need, that's what
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  Speaker 1: we can turn it into whatever you want it to be.
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  Speaker 1: That's kind of our pitch when we're going to work
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  Speaker 1: with different tenants that want to occupy the space, but
• 6:49
  Speaker 1: we can only come into a cheaper basis because when
• 6:52
  Speaker 1: you're buying a disquasi distressed or opportunistic deal to start with,
• 6:57
  Speaker 1: and then uh yeah, and then really customizing it to
• 6:59
  Speaker 1: what they need, whether there's some office, some warehouse, some
• 7:03
  Speaker 1: loading docks, it's really a mix of all that stuff
• 7:05
  Speaker 1: that we can put in.
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  Speaker 4: Got it.
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  Speaker 3: Hey, So what about the concept of the data centers
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  Speaker 3: and that kind of thing. Is that something you know,
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  Speaker 3: the AI centers you're looking.
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  Speaker 1: At, Yeah, I mean, that's that's there, And there's definitely
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  Speaker 1: a lot of interest in the in the world for
• 7:21
  Speaker 1: that kind of stuff, but the price point is super
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  Speaker 1: high and time to do it is long, and everyone's
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  Speaker 1: battling over where they're going to get power supply, and
• 7:30
  Speaker 1: and there's so much interest that that kind of shy
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  Speaker 1: away from that stuff, like I want to go where
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  Speaker 1: it's not interesting for right now.
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  Speaker 3: So that's just the trend, the flavor of the day,
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  Speaker 3: like Baskin Robbins right exactly.
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  Speaker 1: And they're and I mean we need them. Some big,
• 7:46
  Speaker 1: big groups are doing some huge data centers and they'll
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  Speaker 1: probably do phenomenally. Well, but yeah, doesn't that size is
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  Speaker 1: that it is kind of not on my radar.
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  Speaker 3: You got energy constraints there too. Of course you odabat's converting.
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  Speaker 3: What about converting it to housing?
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  Speaker 1: It takes too long, too much, too much zoning and
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  Speaker 1: permitting approvals to move things. You know, we've done stuff
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  Speaker 1: in different cities where they're not necessarily interesting, converting all
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  Speaker 1: of their commercial in office zoning areas and being like, hey,
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  Speaker 1: we'll just flip this on its head our twenty year
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  Speaker 1: city planning we did and say, now this is all residential.
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  Speaker 1: Like they don't they don't necessarily want to do that.
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  Speaker 1: So it's in some in some cases it can work,
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  Speaker 1: like in downtown Atlanta, it's like it doesn't really matter
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  Speaker 1: if one office building is now residential, in the building
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  Speaker 1: next to it, his officer residential.
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  Speaker 4: It's probably okay. But most most you know, most.
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  Speaker 1: Cities aren't going to want to just completely flip their
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  Speaker 1: city planning on its head.
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  Speaker 3: Yeah, well then again if it's an empty building. But
• 8:47
  Speaker 3: you know, cities make mistakes all the time about their future,
• 8:50
  Speaker 3: about redevelopment. Just tell us your past. When you say
• 8:54
  Speaker 3: you find properties with problems, tell us the property you
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  Speaker 3: found that had the biggest problem, and I assume the
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  Speaker 3: biggest upside reward biggest problem.
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  Speaker 1: Uh we I purchased a mobile home park maybe twelve years.
• 9:10
  Speaker 4: Ago or whatever.
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  Speaker 1: But it basically wasn't even connected to any kind of
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  Speaker 1: None of the septic tanks worked, it wasn't connected to
• 9:17
  Speaker 1: city sewer. It had a septic pond, which you can
• 9:20
  Speaker 1: imagine what that that thing actually is. So it was like, Okay,
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  Speaker 1: we got buy this thing and really I mean bringing
• 9:26
  Speaker 1: a ton of new homes and turn around everything that
• 9:29
  Speaker 1: was there, build out the infrast like the actual physical infrastructure,
• 9:33
  Speaker 1: even use the space I mean that that was it
• 9:37
  Speaker 1: had a pump station to like get sew or higher.
• 9:40
  Speaker 1: It was like, oh my gosh, that was a handful.
• 9:43
  Speaker 4: But it was good.
• 9:44
  Speaker 1: I mean, it was a It ended up being a
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  Speaker 1: great project. It was a giant a giant pain is like,
• 9:49
  Speaker 1: who wants to actually buy this thing? So we're trying,
• 9:52
  Speaker 1: we're trying to make sure that they don't get that bad.
• 9:54
  Speaker 1: We were buying them because those are those some definitely
• 9:57
  Speaker 1: heavy lifts that's got to be done there, but lot
• 10:00
  Speaker 1: lots of you know, I started out in apartments too,
• 10:02
  Speaker 1: there's lots of apartments that were completely bombed out that
• 10:05
  Speaker 1: you're like, what.
• 10:07
  Speaker 4: Are we going to do here? Yeah? No, those are
• 10:09
  Speaker 4: always fun, fun projects. All right. Well, hey, appreciate you
• 10:13
  Speaker 4: coming on.
• 10:14
  Speaker 3: Tell us how we connect with you, how we find
• 10:16
  Speaker 3: you on the web.
• 10:17
  Speaker 4: Yeah, I'm on LinkedIn.
• 10:18
  Speaker 1: That's kind. I've got all my information up there. My
• 10:20
  Speaker 1: company website is there too, and my phone email.
• 10:23
  Speaker 4: All right up there. Great. Hey, well I've got a
• 10:26
  Speaker 4: question for Dave myself.
• 10:28
  Speaker 3: Email kl at Carrie lets dot com and you'll find
• 10:31
  Speaker 3: a link to David's leaked in on art site. Financial
• 10:36
  Speaker 3: Survival Network dot com. Oh we ask when you go
• 10:39
  Speaker 3: there is sign up for our free newsletter, like most
• 10:42
  Speaker 3: of seventy five thousand of you FSN people have done already. Dave,
• 10:47
  Speaker 3: thanks for coming by. We'll talk to you so.
• 10:48
  Speaker 4: Yeah, I appreciate it. Carry it's fun.
• 10:50
  Speaker 2: Thanks for listening to Carrie Let's's Financial Survival Network your
• 10:54
  Speaker 2: solution to today's trying times. For the latest, go to
• 10:58
  Speaker 2: Financial Survival Network dot com. Financial Survival Network now more
• 11:04
  Speaker 2: than ever