Phuc Phan - INEX Properties Internship
Phuc Phan - Senior Project Blog Post
5/8/2023 - Day 1
Work time: 8:30-12:15, 1:15- 5:30, 9:00-9:30 reading (8.5 hrs)
Total: 8.5 hours
My Notes on the CCIM Course
At 7:55AM on a beautiful morning with temperatures hovering around the 70s, Mr. Milnes and I left the house to work. We went to the closest Dunkin nearby for breakfast and arrived at the office at 8:25. I was given a tour of the office and I was shocked by the "maze" in the office. There were numerous floors and rooms; my favorite part was the glass bridge connecting two sides of the building. I was introduced by Mr. Milnes to the whole company and they were very welcome. Being in the American workforce was a fascinating experience on the first day. I can notice an individual's workload being heavier compared to the workload I've experienced in Vietnam as a part-time employee. Firstly, at 9am sharp, I joined Mr. Milnes in a company Zoom meeting, the meeting is dedicated to recapping the previous week and checking up on each client for the payments. Next, there was another meeting with individual employees and a client. Both meetings lasted a total of 2 hours. It was a Monday morning and the meetings weren't right for me. I needed to do something more realistic in terms of work. However, after that, Mr. Milnes took Brad and me to tour his real estate properties. Now we're talking, this is the topic that I'm intrigued about. I never realized that Mr. Milnes had many properties with numerous tenants (including USPS - their biggest tenant). He also explained what the owner of the properties should be responsible for and because of that Mr. Milnes and his team always has to check up on properties once in a while. I learned real estate vocabulary such as lease, restore purchase, and Common Area Maintenance. I found these words beneficial because these are the terminologies I have to use in my daily life to describe real estate, not just long explanations. After touring 3 properties, Mark, the vice president of INEX Properties gave me an outline of my 2.5-week internship plan and also gave me an introductory of real estate. I was given a formula sheet, which depicts formulas that are specific to real estate. Also, I was assigned a course by CCIM to learn more. Overall, the first day of work was enjoyable and I loved it so much. My homework for the night, given by Mr. Milnes is to read the first chapter of the book named The Real Estate Game written by William L. Cruikshank & William J. Poorvu. I would like to be more knowledgeable in real estate. I am excited about this opportunity as I found the new industry I am working in is kind of challenging. I have never experienced it in the real estate industry since I knew only about export and import in agriculture back in Vietnam. Therefore, I am looking forward to the next 2 weeks at INEX Capitals.
The office I am working at!
5/9/2023 - Day 2
Work time 8:45-12:45, 1:30-5:30 (8 hours)
Total: 16.5 hours
On the second day, I was excited to start the day with more knowledge of Real Estate. I arrived at the office around 8:35 am and started working at 8:45 am. The first thing I did in the day was check my mail for INEX. I was surprised that I had something in my inbox, it wasn’t clients as I expected. However, it was a property brochure from Mark, the vice president of INEX properties. As I opened it, the document contained an introduction to real estate and the properties listed inside the documents. It was a long scroll and at 9 am, I was invited to the conference room to be introduced to real estate. Mark gave me the list of properties INEX is currently handling and gave a short lesson about how property prices work. The reason why property prices fluctuate is because of the cap rate. The lower the cap rates are, the more value the building brings. So, how are cap rates determined I asked Mark. His response was that it is determined by how modern and new it is. Take, for example, I bought a torn building for a cheap price. Now, I renovated and painted everything, and I made the property look new. Therefore, the cap rate would increase because I added extra value to the property. As a result, there are always costs that would lead to long-term investment, making my return on investment (ROI) high. After the meeting, we would hit the road to tour some properties. This time, there are vacant properties and I observed the damages that need to be fixed in order to provide services for future tenants. During the property tours, I learned about devaluing a property. This is due to factors such as noise above the building (which is an example today). Therefore, renting the property was 30% cheaper than usual. I never thought a factor such as the sound above would modify a price of a property. After touring a couple more properties and observing more, I noticed that the landlord needs lots of maintenance to provide for future tenants. Now, I understood how hard real estate is, it is a game that individuals need to be strategic. In the afternoon, I started on the CCIM course when Mr. Milnes wasn’t present in the office, I finished halfway. The course taught me finance formulas such as Gross Income Multipler, Cap Rate, and Default Ratio. As this was the introductory session, there was lots of information lectured. I kept pausing and rewinding back through the videos to take more notes. I also did extra research on info that I didn’t understand. Overall, Tuesday was very productive. I enjoyed it so much more in real estate and I find it so fascinating (I talked with Andrew today when we talked at dinner!). My goal for tomorrow or the next day is to finish the first video of the CCIM course. It was cold today, brrrr…Let’s get some better weather tomorrow!
5/10/2023 - Day 3
Work Time 9:00-12:00, 1:00-5:30 (7.5 hours)
Total: 24 hours
What a beautiful day it is for day 3 of work, also a late start than usual. I had some yogurt and a Dunkin iced matcha latte for breakfast to start the day. Today for day 3 will be a little different compared to other days. This will be my day to finish the CCIM course which will last for 2 hours. The instructor for the course told me that the 6 x 2-hour course is a semester's worth of graduate studies. Therefore, the pace will be faster than usual. Fortunately, I had the recordings so I could watch at my own pace. The day went by fairly quickly and surprisingly I spent just the whole day working on the course. The reason why the course takes a long time is because there are countless Finance terms that I couldn’t understand. Also, there are numerous formulas that can’t click straight through my head right away due to their complexity. However, I managed to get through the whole Excel file the course has assigned and I have taken lots of notes. It was a quiet day for me but my brain has taken in lots of financial terms. At the end of the day, I checked up with my mentor, Mr. Milnes and he congratulated me on completing the CCIM course (just the first lesson!). I explained my struggles for the course and he could understand why, the Real Estate industry is still new to me and I would need time to adapt to the language. Overall, it was great, Mr. Milnes said tomorrow will be an independent reading on the book The Real Estate Game by William L. Cruikshank & William J. Poorvu; he gave me and my continuation on the CCIM course (for lesson 2!). On Friday, Mr. Milnes will not be busy and will teach me about Real Estate appraisal. I’m so excited to learn more, I can’t wait to close my week about something fun this Friday!
https://drive.google.com/file/d/1t4XgJyLuXP0QZdoO_Jju00OjEM1fsR-N/view?usp=sharing
https://drive.google.com/file/d/17clR0EWOa8U32EIoMs-ygty1moV72Z6I/view?usp=sharing
-> Notes from CCIM (featured)
5/11/2023 - Day 4
Work time: 8:00-12:00, 1:00-5:00 (8 hours)
Total 32 hours
Thursday, almost Friday!!! Today was a less intense day compared to Wednesday. As today was an independent day Mr. Milnes gave me. This day is meant to do my reading on The Real Estate Game by William L. Cruikshank & William J. Poorvu and also look back on the CCIM course I’ve taken. Firstly, the book was confusing but as I continue to read, I understood more about what the author was trying to convey; he tries to explain the useful uses of the Back of the Envelope (BOE). The author listed examples of how BOE is taken advantage of, BOE means that an individual provides a rough estimate of the cost of a real estate property. One example I liked was that the buyer liked the price the dealer gave as it was low. However, the buyer was attracted by the projected increase in rentals. As a result, “rentals were below market, it made perfect sense to base a sale price in part on a projected increase in rentals” (Poorvu, Cruikshank 30). In this case, it was a win-win situation for both parties and the lesson here was bringing both sides together to close the deal. But, as you look further into the deal, the buyer received a better deal as he paid a lower market price. Psychology played a factor but having the mindset of BOE significantly increased his success rate. Next, I looked over the CCIM notes I have taken and I was surprised at how much information was conveyed in the lecture. I had to “review” the content that I’ve studied and make it applicable to my future. Tomorrow will be a lesson about Real Estate appraisal, lectured by Mr. Milnes. I’m eager to know the content because Andrew told me that was his favorite thing to learn about Real Estate. I hope CCIM and The Real Estate Game book could aid me in my understanding.
5/12/2023 - Day 5
Work time: 8:00-12:00, 1:00-5:00 (8 hours)
Total 40 hours
And it’s Friday! Finally, the day that everyone is excited about because the weekend is coming up. Today was a big day for me because all the knowledge I’ve learned this week needs to be applied to a real-life situation. Mr. Milnes told me on Wednesday that a Real Estate appraisal will be on Friday. Therefore, for the past week of work, I’ve been acquiring new knowledge and finally, it is time to put it to the test! Just 8:30 am sharp, I was invited to Mr. Milnes’ office and now everything starts. At first, we talked about the “cap rate,” which is the capitalization rate. He explained how it works and connected it to a savings account. I had no problem understanding because Mark has given me an introductory course on it and I’ve done it on CCIM. Next, the real deal is up and he has shown me the structure of an appraisal. An appraisal is used to obtain a bank loan, and the third party usually does an appraisal. The 70-page pdf is an expert in real estate valuing a property with calculations, research (surveys from PWC, valuation of surrounding properties,..), and valuation approaches (cost approach, sales comparison approach, and Income approach). When Mr. Milnes was explaining the financial terms, I could mostly understand all because he was going at a slow pace and it was easy to understand. The financial terms include Potential Gross Income (PGI), Net Operating Income (NOI), and many more. A property's PGI is a property with no vacancy and occupied by tenants. Also, the NOI, is the profit after expenses are cut. With these specific terminologies, I can “sound” more professional in Finance, which has improved my financial analysis skills via Excel. I could read it without searching the terms online every time. Also, to close the meeting, he gave an example connected to the book The Real Estate Game. He utilized the Back Of the Envelope (BOE) strategy to evaluate his property in Londonderry. He does not use the academic way that CCIM does; instead, he calculates everything from profit to expenses. For example, the cap rate is calculated by NOI/Purchase price. It does not have to be a complex formula compared to CCIM or the Real Estate Appraisal. All of today is to be spent analyzing the documents by reading closely and getting a better grasp. Overall it was great and I loved it. This is probably one of my favorite days of work so far, I’ve learned so much and I’m glad I have this opportunity to do so. Happy Weekend!
5/14/2023 - Reflection Week 1
Week 1 Total: 40 hours
Throughout the first week of my senior project working at INEX Capitals, I am satisfied with the content I’ve covered with Mr. Milnes and Mark. Additionally, I’ve utilized the time I wasn’t covering content to do my personal research on the content that I’ve studied, learn the CCIM course, and read the book The Real Estate Game by William L. Cruikshank & William J. Poorvu.
As it was my first time arriving at INEX, I felt shocked because how the whole office seemed like a maze for me. This week has been an intense week for me to learn new content. For the past week, I attended a Zoom meeting with Mr. Milnes, the meeting covered the overview of the previous week and a recap of sales and operations. Next, I also toured properties to try to understand the responsibilities of a property/land owner. It is not just about collecting rent, but, it is also about managing the property to make it look appealing for future/current tenants. This includes doing maintenance such as cutting grass, repairing a roof, or even repainting property. These are operating expenses that include being a tenant of the property. I also learned about obtaining a property valuation, which is a cap rate. For homework and office work, I dedicated my time to reading The Real Estate Game which educates me about how real estate works, the factors that consider a property a “real estate,” and most importantly learning how to invest in real estate. One of my favorite things to learn at the company was doing the CCIM course and analyzing the real estate appraisal & its process. Working during the first week benefited me as I improved my analytical and spreadsheet skills. Not only do those skills I benefited from but I am also familiarized with how real estate works! In order to benefit from the work I’ve done, I have to look over my notes, and also be more exposed to documents such as appraisals.
I enjoyed what I was doing because I loved to intern at different places. I could feel a little bit of workload as I was given few tasks but long ones. For the past couple of years, I have interned in Vietnam, Spain, and now in the US! Doing my third internship helped me compare the work environment and the workload. As I was only exposed to the coffee and pepper industry, the real estate industry was an eye-opening experience for me. I have never been engaged with it before and learning it in the US during my senior project was a successful goal for me.
Overall, everything occurred fairly decent. An obstacle that I have faced during my internship at INEX properties is the financial terminologies. I have to google it, do research, and make my own definition to be able to understand. In order to achieve my goal of being a competent real estate guy, I have to continue to be exposed to documents, ask questions, and continue to be eager to learn more. So far so good! With over 1 week remaining of my senior project left, I am excited to learn more, let’s go!!!
5/15/2023 - Day 6
Work time: 8:45-12:00, 12:45-6:15 (8.75 hours)
Total 48.75 hours
Monday morning, what a nice day it is with temperatures hovering around 60-70 degrees Fahrenheit. First thing in the morning I was given an introduction to why rent increases over time. This change is because of the Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics. For example, a one-year range data, when you divide a yearly amount in 2023 and 2022, which is 324,000 and 304,000. The result will be 4.69% and in words, this is demonstrated as the increase in “everything” in the US (A 4.69% increase compared to the previous year). This is an indicator of inflation as costs will rise 4.69% compared to the previous month of the year. The reason why the data is important is that the landowners could utilize these statistics to increase their rent. As costs increase by 4.69%, a 4.69% increase in rent needs to be applied to adapt to the economic change in the US. Next, I analyzed the Real Estate Appraisal that I was given on Friday. The reason why I decided to do this is that on Friday, Mr. Milnes covered the essential parts of the appraisals in a timely manner. Therefore, I wanted to dive deeper into the analysis and the process of an appraisal. Today, I understood closely what a lessor (an owner of a property/land) and lessee (the tenant) is. To put this into perspective, the owner is the city of Manchester NH and the lessee is the person renting from the City government, which is Mr. Milnes’ company. I was confused about these terms and I had to talk with Mark to help me cover the terms. I also learned what a lease fee (the person owning the building but the city government controls the land) and a fee simple (the full bundle of rights of an individual/business) was. I am starting to learn more day by day about how in-depth real estate is. I’m glad I chose to dive deeper because I could’ve missed out on details I couldn’t understand. I learned more about the format of an appraisal such as tips to conduct a successful appraisal, sources of data, income & expense analysis, and the “academic” way of calculating capitalization rate. The document was long and it took lots of concentration and analytical skills to decipher the document. I also had a meeting with Mark and Brad to cover the content we are covering for tomorrow. We received a head start on understanding the financial sum, accounts receivable, and tenant risks. These are just the few topics we got a headstart as the meeting almost lasted for 2 hours. Therefore, I hope today’s meeting could be beneficial for tomorrow’s main monthly recap meeting. We will be covering more topics and I’m excited to be an attendee of the big monthly meeting.
5/16/2023 - Day 7
Work time: 9:15-5:30 (8.25 hours - no lunch)
Total: 57 hours
Today was a later start compared to yesterday because I had more flexibility in work! Mr. Milnes assigned chapter 3 for me to read and it was a longer chapter than usual. Not going to lie, chapter 3 was one of the most fascinating chapters I’ve read yet in the book. Chapter 3 talked about tips on owning and selling real estate such as having patience and “doing homework,” which means doing your own research about the property. As a result, the buyer won’t encounter any surprises as they’ve done adequate research about the property. I also have done my own research in the morning about the terms in the book. I realized that the language was a little bit hard to understand as the book was meant to be for native English speakers. There was slang that are confusing and I’d never heard before, luckily, Mark was there to help and there were long durations I was in his office room of him to explain something to me. Today, I also talked to Mark about the US tax system and how it applies to an individual and also about real estate. Around noon, I attended the monthly company meeting to recap financials and the future. The meeting talked about financial sums, tenant risks, and accounts receivable. The meeting took a long time because every tenant that needs their lease renewed was given notice by Mark so everyone can take action on renewing their leases. Next, tenant risks include tenants being able to sufficiently pay rent which almost every tenant does. However, there are some tenants does late payments which makes INEX worry about chasing tenants down on payments. Overall, in the afternoon, I did extra reading and had some compelling questions for Mark. I didn’t understand most of the examples the book gave and had to ask Mark. He laughed and told me that the examples were complicated. One example was just about the name “Allison” as the daughter name of the buyer but it was mistaken as the huge corporation. As a result, other competitive bidders didn’t want to mess with it. I didn’t know how Allison. Overall, I enjoyed Tuesday so much, I told Mr. Milnes that I would do a presentation at the office to do a recap of the senior project as this would test what I’ve learned.
5/17/2023 - Day 8
Work time: 9:15-12:25, 1:05-5:25 (7.5 hours)
Total: 64.5 hours
Burrr, what a cold day it was, temperatures hovered around 40-50 degrees Fahrenheit. As I came to the office and opened my window, a breeze of wind came in and I shivered. “Ok, I’m closing that, that ain’t happening” - I said. Right after that, I went to Mr. Milnes’ office to summarize my progress and what I’d done this week with Mark. Also, Mark was present at the meeting at his office. Still, the funniest thing to talk about was the phrase “pass muster” and Mark referred to it as a condiment when I was talking to him. Then, everyone laughed and we continued to talk about tasks for my last couple of days at INEX. Next, Mr. Milnes thought that I could study loan amortization and the course was at Khan Academy. The Khan lesson introduces mortgage loans and how principles and interest work. As I finish the course 1.5 hours later, I went to Mark’s room and reviewed what I’d learned. After that, he showed me real-life examples of INEX’s financials. That was the real deal because those were the official monthly and yearly financials of INEX. It was a little bit confusing but as Mark explained more, I got the gist of the information. I was also educated on the Loan to Value (LTV) of the properties of INEX. At this stage, INEX is doing a great job because they have almost paid off their loans to the bank, having an LTV of 17% and equity of 83%. After that, we covered net leases and the types such as Gross Lease, Modified Gross Lease, and Triple Net (NNN). Finally, we closed with discounted cash flow analysis to calculate the future value of the property at today’s rate. For example, interest rates of loan payments are at 10%, therefore, INEX will need to pay off the loan and their Net Operating Income (NOI) will reduce. It was a long day in Mark’s room to cover the content but I enjoyed it a lot. Discounted Cash Flow (DCF) is a little challenging in a real-life financial spreadsheet but I’m slowly getting it.
5/18/2023 - Day 9
Work time: 9:15-12:15, 1-3:30, 9:00 pm-11:00 pm - working on presentation (7.5 hours)
Total: 72 hours
Day 9 was a relaxing start in the morning with CCIM Lesson 2. Although I didn’t get far in module 2 of the course, I was given a lesson about capital accumulation using future value. Also, I learned about the Modified Internal Rate of Return (MIRR) and Capital Accumulation in spreadsheeting. The difference between MIRR and IRR is just MIRR is the future value through investments. Around 1:00, Mark gave me paperwork about an official Letter Of Intent (LOI) in real estate and a lease document. We spent over 2 hours on the documents and looked over the terms and conditions of a legal document. There are numerous terms such as alterations, estoppel, and severability. I was given an example that I came up with myself to complete a valid Letter Of Intent. The lease document was around 35 pages so I went through all the terms of the contracts with Mark to understand what everything meant. Overall, I felt really happy that I am able to cover additional documents before my last day tomorrow. I chose to do a presentation to evaluate myself and it is kind of nerve-wracking for tomorrow. Anyways, I will do my presentation later at night and I hope the presentation goes smoothly on Friday!
5/19/2023 - Day 10
Work time: 9:00-12:15, 1-3 (5.25 hours)
Total: 77.25 hours
And…It is FRIDAYY! It is the last day to accumulate enough hours for my senior project. To begin the day, I had a presentation on my agenda. I felt very nerve-wracking because I haven’t done a presentation in a while. And…yes, I chose to do an optional presentation. I set up my presentation and also made some small edits to make the presentation more appealing and pleasing. Fortunately, I have done some rehearsing already so it should go smoothly as planned. It was around 9:20 and we ran into technology issues, the projector wasn’t working properly. Therefore, I headed to Mr. Milnes’ room to try on airplay. It also didn’t work so we had a third backup plan to go to the large meeting room and finally, it worked! I didn’t want to disturb the attendees. The presentation started and my voice went smoothly, no errors yet. Then, after the table of contents slides, my “Expertise in Real Estate” slide was missing. I was so confused and had to obtain the missing slide from a backup saved one. Phew…that was a close one, but everyone saw that. I don’t know how but a slide was missing, maybe I accidentally pressed delete without notice. But, anyways, the rest went smoothly with my strengths, weaknesses, work environment & benefits, and my future goals. Mr. Milnes and Mark gave me positive feedback about my 2-week internship at the end of the slides. Also, there were compelling questions such as “Would you invest in Real Estate would your own Money?” - Mr. Milnes asked. I responded, yes, it is such a profitable industry and if you’re smart about your money, you could definitely make high margins (like what INEX Properties does!). He responded it was a good response and commented that I am eager to learn. However, one criticism he gave me was taking notes on my phone. Back in Vietnam, at the office, taking notes on my phone is the most convenient for me as I could type quickly. But, in the US, taking notes on your phone means you are currently texting and not paying attention to the speaker. Mr. Milnes said it is a cultural difference so I should make notice of the audience and speaker before doing that note-taking method. I am glad I chose to do a presentation because I am confident to summarize what I’ve learned at INEX. I made lots of references to the documents that Mark or Mr. Milnes has given me. Later in the day, I looked back at the documents that I received within 2 weeks. I was astonished by the confidentiality of the documents. As a new intern, I looked at the financials of the company which are confidential. Therefore, I felt grateful that INEX has trusted me as an intern to provide sufficient documents which aid my understanding. Last blog! Thank you so much for the opportunity Mr. Milnes, It was a pleasure working at your company and it has educated me a lot in Real Estate. Again, I am glad I could utilize my time in my senior project, as a high school student, to intern at an American company. This is a rare opportunity to have and thank you for the time for the past 2 weeks! Also, thanks Mark Lacombe, I took a lot of your time to cover materials in Real Estate and you were my secondary mentor. I wish both of you the best!
SUNDAY 5/21 - Reflection WEEK 2
Total: 77.25 hours
Throughout my second week of INEX Properties, I found the content more fascinating as I was given so much information on real-life documents in Real Estate that I could connect to. I found the information given was more practical and the knowledge that I’ve accumulated in the first week has been beneficial for the second week of work.
Right off the bat, Monday morning, I was given an introduction to the Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics. The statistics reflect the increase in rent as the costs of the whole country increase, which is inflation. So no wonder why rent increases, is because of the CPI from the U.S. Bureau. Next, I dove deeper into Real Estate Appraisal and learned so many other factors such as the specific roles of the lessor and lessee. Also, knowing the specific terms such as fee simple and lease fee. Tuesday, we covered one of the most important meetings in the company, it reoccurs monthly and it is the recap meeting of everything: financial sum, accounts receivable, and tenant risks. The majority of the content is concise and revenue and expenses are looked at closely to compare for different months. Also, the language that American employees communicate is very efficient, I see Mark going through tenants and giving feedback so Mr. Milnes would have an idea to see what’s up with the tenants (if they are paying on time!). I have also done additional readings that are really applicable to the content such as strategies to start investing in Real Estate. Also, I have learned how luck plays a big factor in investing in Real Estate such as the example of Allison being a large automobile company. But, it was a small company named after the CEO’s first daughter. Wednesday, I did the Khan Academy course and did an extra reading. I had lots of compelling questions to ask Mark and he showed me mortgage documents and an Excel sheet depicting that. Therefore, a Loan To Value (LTV) would be beneficial to convey the information on how much loan to equity you have. A lower percentage of LTV would mean you pay less loan than your equity. In this case, you’re paying less interest compared to your principal. Thursday, all about Modified Internal Rate of Return (MIRR) and Capital Accumulation in spreadsheeting. Also, I had saw a Letter of Intent (LOI) form. Friday, was my presentation and my recap on everything. It was amazing for this week wow! Lots of practical stuff that I have learned.
Overall, I think it was an amazing week. Compared to week 1, week 2 was more smooth and I’m glad that INEX shared confidential information for me to study about Real Estate and how it works. Lots of academic work but it really paid of in using that to apply to real-life documents.
5/22/2023 - Day 11
Work time: 12-1 (1 Hour)
Total: 78.25 hours
What a beautiful Monday with a relaxing day. As I finished Friday's work, it was my last day so I got excused for the remainder of the project. Therefore, I decided to continue reading The Real Estate Game written by William L. Cruikshank & William J. Poorvu. The chapter from Concept to Commitment was really funny with one example. There were two companies: buyer - JBG, and seller - Equitable. There was a stingy person that doesn't want to reduce his property, clearly, the buyer knew the price wasn't worth it at $40 million, it was actually worth only $30 million. The seller isn't going to reduce the price of the property, even though a little bit is not okay. However, the buyer is interested as the property could make lots of money for his business. The offer on the table was $40 million at a mortgage rate of 9%. Therefore, the buyer proposed a solution that he is going to still pay the $40 million but it was a conditional offer, he is going to pay 6.5% for the first 5 years, and the remainder would be 9% also the accrued value in order to pay the full $40 million. The landlord, Equitable, agreed. The reason behind this smart offer is because the first 5 years, JBG could struggle to make money to pay off the mortgage, but the interest was 6.5%, which is better than 9% initially for 5 years. Therefore, JBG could pay off their bills as it is the future value could be decreased over time. Over time, due to inflation and many other factors that cause expenses to rise, money won't be as value over time. The lesson here is when they are struggling to pay off their mortgage, they are getting a lower-than-market rate for it. The first couple years in a new location would have struggles and they would need a couple of years to be very successful. After 5 years have gone by, JBG has made even more profits and has been a bigger corporation, therefore paying off their bills are way much easier than back then. Even though interest rates are at 9% and have also been accrued, JBG doesn't have to worry as they are more successful than before, and paying off rates 5 years later isn't a big problem as the initial rate when they are struggling. After this valuable lesson in life, I talked with Mr. Milnes about it and he told me the same situation occurred in his real life. There was a landlord (actually down the street), who didn't want to sell Mr. Milnes his current house land, the landlord offered for him $150,000 but Mr. Milnes didn't think it was worth back in the day. Therefore, Mr. Milnes agreed on a $50,000 down payment and $100,000 in 2 years with small interest. Little did the landlord know, Mr. Milnes has become more successful in his business and that $100,000 was so much easier to pay later as Mr. Milnes achieved good profits in his Business. This is a life lesson that I've never thought about in my life. As I do the CCIM course and consult with Mr. Milnes about tips for Real Estate, I think this tip is one of the best tips in Real Estate. The money sounds very fascinating to the landlord, but buyers could negotiate the terms to benefit themselves more.
5/23/2023 - Day 12 - Final Day!
Work time: 12-1 (1 Hour)
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