Wonton Wealth: Insights into Commercial Real Estate Investing & Beyond

A percentage lease is a type of lease agreement where the tenant pays a base rent plus a percentage of their sales. This type of lease is commonly used in retail properties. The base rent is usually lower than the market rate to account for the percentage rent. The percentage rent is calculated based on the tenant's gross sales, and the rate can be fixed or on a tier scale. There is also a bre...

Ground leases involve leasing just the land without any structures on it. Tenants can build and use the property while the landowner collects rent. Ground leases are usually long-term, lasting 30 to 99 years. Examples of tenants who use ground leases include McDonald's and cell tower companies. Ground leases can be subordinated or unsubordinated, with different levels of risk and rent. From a...

Mailbox money exists in the form of absolute net leases, where tenants shoulder all expenses, including structural repairs and capital improvements. This type of lease is a set-it-and-forget-it investment, providing a steady income for landlords. However, it requires a prime location and a top-tier tenant. Absolute net leases are considered the pinnacle of hands-off investing and offer full transp...

Net leases shift financial responsibilities to the tenant for property insurance, property taxes, and common area maintenance (CAM). There are three types of net leases: single net, double net, and triple net. In a single net lease, the tenant is responsible for one of the financial obligations. In a double net lease, the tenant is responsible for two of the financial obligations. In a triple net...

In this conversation, Tanh discusses two common lease types in commercial real estate: gross leases and modified gross leases. A gross lease is when the tenant pays a fixed amount of rent every month for a specified time frame, and the landlord is responsible for operating expenses. In a modified gross lease, the tenant pays a base rent and also contributes to a portion of the operating expenses....

Leases can be difficult to read due to the use of legal jargon and legalese. A lease abstract can provide a summary of the lease and highlight important information. Key sections of a commercial lease include the effective date, commencement date, and expiration date. The rent section covers base rents, additional rent, and grace periods. The security deposit section outlines the amount and condit...

The conversation discusses the importance of understanding the difference between the effective date and the commencement date in commercial leases. The effective date is when the lease officially begins, while the commencement date is when the tenant starts paying rent. The commencement date is often later than the effective date because tenants need time to renovate and obtain permits. It is cru...

Breaking a lease in real estate can be complicated and depends on the terms outlined in the lease agreement. A termination clause can provide a way to break the lease, but there may be fees or conditions associated with it. Communication is key to a smooth breakup, and building a good relationship with the tenant can help in resolving any issues. Personal guarantees can provide financial protectio...

Summary In this conversation, Tanh discusses the different types of senior living facilities and the amenities they offer. He explains that in many countries, including Vietnam, children take care of their elderly parents, but in the US, there are communities and facilities to assist with daily activities. Tanh describes four main types of senior living facilities: independent living, assisted liv...

In this episode, we're exploring the unsung heroes of our digital age—cell towers. From the addiction-inducing smartphones in our pockets to the vast internet landscape, cell towers keep us connected 24/7. We delve into the types of cell towers you might encounter, from the towering Macro Cell Towers to the pocket-sized Small Cells and the behind-the-scenes wizards known as Distributed Antenna...

The conversation discusses different types of hotels and their amenities. It starts with a personal anecdote about a budget hotel in Vegas and then explores the big names in the hotel industry like Hyatt, Hilton, and Marriott. These hotels offer a range of amenities and are like mini cities. The conversation also mentions independently owned and managed hotels, which may not have all the bells and...

In this episode, we're digging deep—literally—into the world of land. Land is the OG of real estate, the very foundation upon which we build our homes, businesses, and dreams. We explore the different types of land, from residential and commercial to agricultural, recreational, and conservation. Each type has its own unique role in shaping our environment and economy. While government-protecte...

In this episode, we're diving into the world of self-storage—a knight in shining armor for hoarders, homeowners, and business owners alike. Self-storage has exploded in popularity over the years, becoming one of the hottest assets in the real estate market. While technically classified as industrial, self-storage also has a retail component. Think of it as a mini treasure chest or a mini wareh...

Mixed-use properties combine different commercial asset classes to create a versatile and dynamic environment. They can include a mix of residential, retail, office, industrial, and hospitality spaces. These properties aim for integration and convenience, providing a one-stop shop for tenants and drawing in foot traffic for retail tenants. Mixed-use developments are not limited to cities and can b...

Industrial real estate is a diverse asset class that includes warehouses, distribution centers, data hubs, and manufacturing plants. These buildings are typically larger with minimal amenities, concrete flooring, taller ceilings, and metal walls. There are three subcategories: light manufacturing, medium manufacturing, and heavy manufacturing. Light manufacturing includes versatile spaces for asse...

The conversation discusses the impact of COVID-19 on office spaces and the potential future of suburban offices. It explains what office spaces are and describes different types, including traditional offices, medical offices, and co-working spaces. The conversation also highlights the importance of creating a professional and inviting atmosphere in medical offices and the collaborative environmen...

Retail commercial real estate refers to properties that are utilized by businesses selling goods and services to the general public or end consumers. It can be categorized into single tenant properties and multi-tenant properties. Single tenant properties are occupied by a single business, such as fast food restaurants or drug stores. Multi-tenant properties include strip malls, neighborhood shopp...

Anchor tenants are key tenants in commercial properties that draw in foot traffic and create a bustling atmosphere. They are typically large retailers or department stores that occupy a significant portion of the space. These tenants attract smaller retailers to set up shop nearby and significantly influence consumer shopping habits. They provide stability, credibility, and visibility to the prope...

Did you know that CRE had different classifications? Properties have their own classifications from A to D based on their quality, condition, and maintenance level. Class A properties are luxurious and command higher rents. Class B properties are reliable and more affordable. Class C properties are older and require some maintenance. Class D properties are typically avoided due to their disrepair....

This episode explores the benefits of investing in commercial real estate. The first benefit is the tangibility and control that comes with investing in a physical property. There is also less competition in the commercial real estate space compared to other types of real estate investments. Additionally, there are tax advantages, opportunities for forced appreciation, inflation resistance, long-t...

Commercial real estate has its downsides, and it's important to be aware of them before investing. Some of the common cons include the larger financial commitment required for commercial properties, higher fees and expenses associated with purchasing and maintaining them, and the time-intensive nature of commercial real estate transactions. Vacancies in commercial properties tend to be longer,...

In this conversation, Tanh discusses the different types of commercial real estate properties. He starts by defining commercial real estate as any property used for business purposes, excluding multifamily properties. The main types of commercial real estate discussed are retail, office spaces, industrial properties, and mixed-use properties. Retail properties include storefronts and shopping cent...

Tanh introduces himself as the host of the Wonton Wealth podcast, where he discusses commercial real estate topics. He shares that he is writing a book on commercial real estate and aims to provide valuable content to beginners and advanced learners. Tanh talks about his background growing up in Cincinnati with immigrant parents and the challenges he faced as a non-English speaker. He shares his j...