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Nick Huber

21 Jan, 10 tweets, 2 min read

The hardest thing about entrepreneurship, real estate, or anything else worth doing:

You have to be able to look at incomplete information...

Or a complicated problem without a clear-cut solution...

And make a good decision on which way to proceed.

A thread 👇👇👇

There is nobody who can take you by the hand and lead you through a step by step guide to win.

Everybody's journey is different.

The 1,000 important decisions I made to win will look nothing like yours.

This is why success is so hard to teach..

Because there is one skill you need to have to win:

Resourcefulness.

The ability to find what you need and figure out solutions to problems that there are no correct answers to.

Life isn't a textbook.

You can't turn three pages back and look up the answer. You can't ask a teacher.

When you are an entrepreneur there is nobody out there who can help you answer problems except YOU.

And this is the opposite of what most people are used to doing.

High school and college teach you to comply and look up the answer and memorize. Google gives us answers to any question we have at our finger tips.

Except what to do when a problem in your business arises.

Or what to do when you get asked a hard question that you don't know the answer to on a conference call with a customer, partner or investor.

So how do you become resourceful?

You practice it. You explore and get out of your comfort zone as often as possible.

You challenge yourself.

You read books not to read them but to try to apply the frameworks to how you make decisions based on what you know to be true.

You mess up a lot. But if you use your head you can keep from sinking the ship. And live through them to fight another day.

And you can get better. And adjust. And have an open mind. And learn.

And you develop an intuition.

A sixth sense.

And you can make quick decisions with confidence.

And you win.

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Nick Huber

@sweatystartup

23 Jan

A hill I'll die on:

95% of entrepreneurs should forget about technology (a few big fish and a lot of sophisticated fishermen) and focus on small business (small fish everywhere and really crappy fishermen).

A THREAD:

Be like water.

Take the path of least resistance.

The goal of every entrepreneur should be:

#1. Gain financial freedom

and

#2. Maximize probability of achieving #1

Because when you have financial freedom your world opens up.

You can start doing what makes you happy.

And you can positively impact a lot more people with project #2, 3, 4 etc. You're in a position to try to change the world if you have financial freedom.

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Nick Huber

@sweatystartup

23 Jan

A THREAD on how most real estate folks structure deals with outside investors.

Most people utilize the "preferred equity" structure when they raise money from outside investors. They "syndicate" deals.

Here's the basics:

The person (or team of people) putting the deal together is the "sponsor". Also called general parter. Referred to on twitter as the GP.

They find the property, do all the work, hire the management company and take fees. They often co-sign debt and always secure the financing.

The investor is generally passive, doing no work and putting in cash. This is the "limited partner". Referred to on twitter as the LP.

They don't co-sign debt. They simply read reports and ask the sponsors questions and cash checks every month (if the deal is going well).

Read 31 tweets

Nick Huber

@sweatystartup

22 Jan

A THREAD that will allow you to fit right in around real estate Twitter.

With terms, definitions and the basics of the lingo you need to know:

NOI = net operating income

This is the profit a real estate asset makes BEFORE you consider the debt service payments.

We use this term as the ALMIGHTY measure because each investor may get different debt terms and thus debt payments.

Cap rate = NOI / Value

Divide the net operating income by the value of an asset (or what somebody paid for it) and you get a %.

That % is a cap rate. 7 cap means 7%.

If you pay $1MM for an asset at a 7 cap that asset generates 70k of NOI

Read 20 tweets

Nick Huber

@sweatystartup

22 Jan

On Sep 3rd 2020 we closed on a 120k sf glove factory built in 1890 in a small NY town.

Has 45k sf of self storage inside and had $14k a month of net operating income at closing.

Let's breakdown this deal.

A THREAD on creating $2 million out of thin air in 18 months...

👇👇

First saw the property on Loopnet in mid 2018. I ignored it. Who wants to try to operate a business in an old factory in a dying NY town.

A few months later I reached out. Broker sent me financials. They were good. $24k a month in revenue and $10k in expenses.

So I visited the property. It was old. Needed a new roof. Full time manager. Only accessible to customers 9am-5pm M-S. No autopay. A lot of folks paying 1/2 market rent.

I loved everything about it.

Read 18 tweets

Nick Huber

@sweatystartup

21 Jan

We've used "seller financing" on two self storage deals in the past year.

And it raised our cash on cash return by 20%+.

And lowered the amount of capital we needed by $500k.

Here's a THREAD about a deal of mine and how this magical debt structure can work.

👇👇

My method is simple. In the late stages of negotiation I submit two offers:

One at a lower price.

And one at the exact price the seller wants but with him holding back 10-20% of the purchase price in the form of a 2nd mortgage (with a second position to your bank loan).

Contrary to popular belief seller financing rarely includes the seller holding back 70-80% and acting as your bank.

Two reasons:

#1 most have some debt on the property.

#2 most want most of their money now.

Read 13 tweets

Nick Huber

@sweatystartup

21 Jan

50% of successful company builders hire people with experience. The other 50% hire friends and family and college buddies and people from twitter.

For the record I'm camp #2.

And they almost never come crawling to me asking for a job.

They almost always do something in real life to give me a look into how they think. And then I pounce!

Read 5 tweets

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