Today is August 9th, 2025. I’ve been preparing for the answers for this all morning, woke up very early. I even had a couple of calls with my in-house attorney, disturbing him at home, but he was very generous with his time since it’s always good to have an in-house attorney.

So Ms. Jones, how are you today? I’m doing great. And you, you’re looking good there in Los Angeles. Yes, ma’am.

And I am having my juices, double fisting celery juice and lemon because the glasses seem too small. And this is gonna be a good long call because we’ve had some great questions coming in. I mean, I can’t even believe I had to talk to an attorney.

I had to even talk to my son about some AI stuff. So this is exciting. All right.

Let’s get started. Okay. First question is coming in from Edwin.

He’s in Florida. One of your JV Partners program investors. He said, we are working a property that is owner operated.

They are willing to move out, but only after closing. They claim they need one week, but asking in the contract for 15 days after closing to close down business and remove some equipment. They are willing to pay $3,000 for those 15 days, which is negotiable.

How do we protect ourselves so that they don’t stay longer than required? We were thinking that after 15 days, the daily rate to charge could be 500 and put a max of 10 days as we don’t want them to stay indefinitely. They are just worried that if they don’t, if we don’t close and they have to shut down the business, it will be more costly for them. We are negotiating the contract currently.

Okay. So they are giving you the lease Edwin, but I mean the property under contract, but they wanna stay because they’re afraid to, we don’t close on the deal and then they’re out of business since they’re operating there. Okay.

So we have to protect ourselves here. So they want 15 days after closing. Well, how about this? Let’s do the following.

Number one, I’m gonna give you the bullet points. Define a firm possession date that is the final day they must vacate. So let’s say 15 days after closing.

So we close, so they don’t have to disturb themselves, but when we close, we need X days they leave. That’s number one. Number two, include a daily holdover.

It’s called the holdover. So let’s create a daily holdover fee starting immediately after the 15 day period, such as let’s say 500 a day, as you propose to discourage overstaying. Number three, cap the holdover period to a maximum number of let’s say 10 more days, after which you have the right to take legal action or evict because we’re gonna have damages.

So we’re gonna say we’re gonna have damages because if we sign a letter of intent and we have to deliver the property, we’re gonna need them out because they need to do the new drawings, they need to get permits, the new tenants need to do all this. So number three, cap the holdover period to maximum days. Number four, require a written agreement.

Let’s do an addendum or a short-term lease back agreement. So whether they are staying, it’s based on a lease agreement detailing these terms, including payment obligation and consequences for noncompliance. I mean, when it comes time to closing, let’s say we’re having the 45 days due diligence, 15 days to close.

We can always tell them, here are the bullet points. And when it comes to us on the 44th day, we’re gonna remove the contingencies and go into the 15 days to close. Then we’re gonna give them after the closing 15 days.

I can send them, I can work with you on sending them a written agreement, doing the bullet points of the firm possession date, daily holdover, cap on the holdover days, extra. And my suggestion is I would put in that agreement that when we close, we’re gonna have to hold money in escrow. It will be, let’s call the escrow holdback to cover potential damages or unpaid holdover fees.

So I’m not gonna chase them for money when we close. We’re not gonna go chase them. There’ll be money in escrow.

Hey, they haven’t left. Or they’re staying, they stay 20 days. So it’s so many days that we allowed.

Then there is five days at $500, there’s 2,500 that we’re gonna get from escrow. And then we’re gonna have to include a clause that actually requires the seller, since they’re operating in the property, maintain the property and the utilities and everything stay connected during that period of time when they hand it over to us. A lot easier to transfer over utilities.

And then we’re gonna have a clear language that time is of the essence. I remember one contract, they didn’t have time is of the essence. And it went to arbitration.

They said, well, time doesn’t seem to be of the essence. I’m like, are you kidding me? Well, so we’re gonna have to say in the contract, time is of the essence to emphasize that we need them to stick with the timeframe. And then of course, if we’re gonna write that, we’re gonna want a personal guarantee from the seller that they’re gonna abide by this.

I’ve had, by the way, cases where it was a mechanic shop or oil place where they had the lifter and stuff. So we put the deal on their contract. We had another tenant lined up.

And then the guy, the owner said, I can’t leave. It was in Florida. I can’t leave.

I don’t know what to do. My son now wants to take over the business. It’s come to the reality.

And we wasted our time. We didn’t wanna go into a lawsuit. We didn’t wanna fight.

The guy would just pull down. So what I’m telling you is from experience. This balances their needs and our needs with the daily penalty.

People don’t have problem committing to a daily penalty or some downside to them if they know they’re gonna work things out. So that’s how we do it. Hopefully that helps you.

Very good. And ironically, I just saw Edwin jump on. So he’s here to hear the very last sentence and he’ll have to catch it on the replay.

Okay, okay, sorry. I just started. Is that right? Okay, next we have Marcus.

He’s in Ohio, just to let you know. He is a brand new JV, very exciting. So he is currently going through the training but he did make time to send in two questions that are on his mind.

First, he said, can I lock up a 20 year lease with a tenant? What are the biggest selling points for a tenant to go long term? Oh, I’m gonna give you the bullet points. The biggest selling points for long-term lease to commercial single tenants especially include the following. Number one, they want predictability of rent increases.

Okay, so if we’re gonna put 3% per year or an increase of 10% every five years or something, that gives them peace of mind. They know what they’re gonna pay for 20 years. From our standpoint as landlords, owners, we love the predictability of the income.

We love to present that to the bank. So it’s a win, win, win. The tenant wins because they don’t have to worry too much about inflation or the rent’s gonna go because I guarantee you the tenant’s gonna go up, okay? The rent’s gonna go up.

The bank loves it because if there is a corporate guarantee like we get, a long-term lease commitment, that’s awesome. We love it because the predictability of the income and that’s retirement for you. You can pass on that building to your kids if you wanna flip it, if you wanna sell it, et cetera.

It’s just easier to sell when it’s long-term leases. And you know, when the tenant has predictability of long-term lease in a location, it avoids frequent relocations for them. It saves them a lot of money.

The other thing, because once they put tenant improvement from their pocket and they hire staff and they work with a certain community, they don’t wanna leave. They will only leave if they’re not doing well. And that’s why I want the corporate guarantee.

So if they don’t do well and they wanna leave, they have to buy the lease back. So they’re gonna negotiate a large sum of money. Let’s say after four years, they wanna leave.

We’re not gonna charge them the 16-year rent. We have the right for that, but realistically, we’re gonna do a discount. Let’s say the 16-year rent is 1.6 million because 100,000 a year with escalations would be 1.8 or something.

We’re gonna say, listen, give me 800,000 and leave right now. So it’s a win-win even if they leave when we have the corporate guarantee. But really, it minimizes our expenses for the long-term.

It keeps them in the location, gives them stability. Large credit tenants that have the corporate guarantees love to secure these long-term leases, especially after the big inflation we’ve had in 2022, 2023. And I’m sure they’re gonna actually want options to renew after that if they’re committing to the space.

Very good. All right, his next question is, I see an auction sale on LoopNet in my hometown. Are these types of properties pursuable? How can I do these deals with you or as a JV on my own? Okay, so joint venture partners can get the property under contract, can send it to me, send me the price and the triple net prices and all the checklists that we follow.

But you don’t have to assign the properties to me. You can assign them to somebody else. As you know, I have no legal obligation to enforce that.

I’m happy for your success. And many people actually were working on a deal right now where it’s a Del Taco and the joint venture partner is gonna buy the building. The numbers make sense.

The seller is gonna carry 80%. He’s gonna just put 20% down. The deal has a minimum of a quarter of a million to 350,000 equity.

And it’s gonna give him 10 to 12% cash on cash. It’s just unbelievable deal. So to your point, if you’re gonna go get an auction, the auction is an all cash purchase.

We like to put the property under contract, wait 45 days for due diligence and 15 days to close. Those 45 days we line up a national tenant. So if you’re gonna go buy cash, you wanna assign it to me, you better be ready to hold on to the property because I don’t want any property that does not have a national tenant lined up for it.

Why? Because I minimize my risk. I don’t want risk actually. So you should assess for the auction.

If you pay cash, is it such a good deal that it’s a no brainer because the rental income you’re gonna get from the area there is gonna be working well, whether it’s a national tenant or a franchisee because you can buy and put franchisees could be very profitable for you. I don’t like just franchisees because I need the corporate guarantee because I flip them right away. And when you flip right away, you have to deal with ordinary gain because it was a flip.

But I have a structure in Puerto Rico where I reduce my taxes on ordinary gain. So I have many advantages the way I’ve structured my life and my business. So you should assess the following.

If you’re gonna buy a property at the auction, if it’s occupied, which I’ve seen properties that are occupied that get auctioned, get the property numbers, the financials. The auction people will load it up somewhere and they will sell you that. Look at the tenant quality.

Is this a good tenant? Is it a franchisee? Is it a mom and pop? Is it a national tenant that’s in there? But the owner is defaulting for whatever other maybe they’re over leveraged in some other deals. The lease terms, how much is left on the lease? Is that why they’re selling it? Is the lease not good? Is it expiring? The physical condition of the property because maybe the tenant is leaving. Are you gonna be stuck with a property you need to do a lot of rehab? So that’s number four.

Number five, verify auction terms and possible competing bids that are gonna be on LoopNet. Okay, so ask what are the rules. And single tenant lease properties with credit tenants long-term leases are very attractive.

So they may get overbid. So be very careful of that. So let’s talk about steps for due diligence.

I wanna dig a little deeper because auctions are very important. So identify the tenant. Find out who occupies the place, what credit they have, and how many years are left on their lease.

Have they been paying on time? Okay, the lease structure. Is it triple net? Is it gross? Is it modified gross? What is it? All right? And I can help you with that. Well, if you’re gonna actually get the property, you wanna analyze some things, you’re a JV partner, I’ll dig deeper with you.

Just send me the info. I like to look at rental rates and escalations. So we can assess the current trend versus the market trend.

Maybe they have such a low rent because they’ve been for so long and they still have so long and the guy is over leveraged. I’ve had deals like this where the owner of a stable building triple net is a developer and he over leveraged himself in some other deals. So he’s selling the good properties because he needs to pay and continue the other ones.

People get into bad situations. They say the two problems you could have is liquor and leverage. Maybe the seller has issues, right? Over leveraged himself.

So property and the tenant, number one, that’s a package deal. Number two, look at the auction specific factors. Any auction have a reserve price.

So find out what the minimum bid is. I’ve seen auctions and I looked at the minimum bids. That doesn’t make any sense.

I’m not gonna even go waste my time. Number two, on the auction terms, what is the premium? Typical options have a five to 10% on top of the winning bid for the buyer. So you’re the buyer.

They make it so enticing for the seller to put their property with the auction house that us as buyers, when we come in, we may bid on the property to buy it for half a million, but there is a 10% premium on top of the winning bid. Find that out because another 50K to 100K based on the property. Number three, not only the reserve price, not only the buyer’s premium, the proof of funds deposit.

Do they want you to put a non-refundable deposit immediately after the auction? Do they want some money pledged before the auction? Do they want just proof of funds and they will give you a number to bid or an obligation to do this, that? Number four, do you have an inspection window? I mean, there is a limited time for property walkthrough. Sometimes you can go and look at the property. So auction specific factors are reserve price, buyer’s premium, proof of funds or deposit, and any inspection window that you need to follow.

Number three, for auctions, understand the market. If you’re sitting in Toledo, Ohio, and you’re gonna check on a property in Toledo, Ohio, it’s completely different than if you have to go look at something in Cleveland or in Dayton. So find out the market consideration.

What are the local comps? What are the cap rates in that area? What’s the traffic count? You can get that from the Department of Transportation or you can call a broker or see something else listed nearby. And then you will figure out the traffic counts, the visibility, the local comps. And I would go to a point now where I check the zoning and redevelopment potential because there are a lot of big companies who will come in and say, I’ll lease it for 15 years from you.

It’s a single tenant. They don’t care how much you paid. They wanna come in and operate.

So they want you to actually demolish the building. So find out zoning and redevelopment potential if that tenant leaves or if it’s a vacant building and you wanna do something with it. And then I also get curious if it’s a big outfit like a REIT.

A REIT is Real Estate Investment Trust. These entities are usually publicly traded. They have portfolios.

And when they sell something on the auction, they wanna get out fast. They’re reshuffling. They’re not necessarily bad assets, but it could also signal that there is a short-term lease remaining and there is some tenant risk because there are no dummies there.

These are credit committees and they actually look for the lowest possible risk. They don’t pay much REITs, pay investors 4% to 5%, 6%. If they pay, they drop the price of their shares on the publicly traded market.

But they sometimes get rid of good assets because they don’t wanna deal with something or they wanna go and leverage in some other areas. Heck, some of them may be just liquidating to expand on some rehab in other buildings. So try to estimate the fair cap market value, how much it’s gonna cost to buy it, what’s gonna cost you to take it to the next level to do something with it.

It’s not an asset that you can assign to me in a joint venture because you can only assign when you have a tenant lined up. However, as an individual investing and get a good property at a good price, hey, you can even take your time, work with brokers, work with the system I gave you to align up a national tenant and you can have a home run deal that you could keep, refinance, cash out, and you have infinite rates of return. Good luck.

Keep us posted. Very good. Sharif, I wanted to just catch up on the side chat here.

Dwayne from California sent in a message. He said that you and he had a call on Thursday with a broker from a large national tenant. Yes.

Yes. That’s what we’re talking about. I didn’t know you were- I wanted to get this in there real quick.

So he said that they would be speaking with the franchisee and then sending a letter of intent, but he still has not heard from them. He said, I did leave a voicemail on Friday afternoon and that was not returned. During our Zoom call, the broker inquired if we also had a vacant property directly next door under contract.

I said that, no, I don’t have it under contract and believe that this is still available. After we concluded our Zoom call, Sharif said that the broker is going to call the neighboring owner and try to get the property under contract. I guess Dwayne just wanted to update everybody on what was going on.

So I don’t know if you just want to have a quick, we’re tight on time here, but if you want to have a quick talk, Dwayne. Dwayne, unmute yourself. Okay.

So tell them about the call we did with Del Taco. It’s brokers, that’s very interesting. Just do a summary of maybe three minutes or something.

I have a property under contract in Sacramento, California. It’s just under 800,000 total. Del Taco uses a broker.

This particular franchisee has 20 Del Tacos in the Northern California, San Francisco, Sacramento area. And the idea, what I learned on the call is that there’s a corporate guarantee. Then there’s a franchisee corporate guarantee that’s one tier down.

The lesson I learned too, is that you don’t talk about a neighboring property because they’re going to, oh, we’re going to Zoom in on that one. Maybe we can get it under contract and buy it because they wanted to initially buy the property instead of leasing it. That’s what they first inquired about with me.

And I said, no, it’s just for lease. But it was a great back and forth. We got some numbers dialed in.

Sharif is just figuring all the numbers out, just kind of blew on my mind. But we originally proposed 7,500, but then they wanted tenant improvements, a couple hundred thousand. So we’re kind of settled at 9,500.

And I’m expecting the LOI still, I’m hopeful. And I think that it’s a great deal for everyone involved. And yeah, I was really excited.

I’m still pursuing other national tenants because I don’t want to just put everything right here in this one because it still may fall through. So I’m going to continue to do the backup, smiling and dialing. That’s an awesome recap, Dwayne.

And you did great on the call. It just, and you gave me the time to negotiate with them and everything. It’s just that the last question they threw in, how about the right, the property next door? Do you have it under contract? And then he answered so quickly, I didn’t have time to like, oh! And he said, no, I don’t have it under contract.

But we have a huge advantage, like you said, we have the drive through with that property. And Dwayne may just get it for himself, which is very exciting for me. When you have a property like this, it truly, your cash on cash will be 12 to 15% once we lock in that deal with them.

And you have the money to give them the TI’s and all this. And if you change your mind, you want to assign it to me, we can still look into it because that franchisee, like Dwayne said, has 20 other units that are family, they’re successful at Del Taco. I mean, after that, I went and I had a taco and a burrito, you know, it was exciting.

I had a taco the other day too, Del Taco. Okay, very good, thank you. And let’s keep everybody posted.

All right, thank you, sir. All right, very good. Okay, moving on to Edgar.

Just so the group knows, Edgar is a real estate fund manager and has two real estate funds, a Reg D506B and a Reg D506C. So I’m going to review some of the notes that he sent in to Sharif. He said, quick update, the global tenant I mentioned before on our calls needed a ready to occupy facility and went to a nearby airport as there’s no availability at the main airport.

We are now working with a group- Oh, one second. The deal, Edgar, correct me if I’m wrong with anything. Edgar has a deal that is phenomenal.

It’s a huge land, it’s service for airport and airport facilities and all what big planes and big companies need for importing and exporting equipment with airplanes, et cetera. So it’s in Panama. So the deal is next level.

I mean, this is amazing. Okay, continue. All right, he said, we’re now working with a group who has service cargo contracts with Amazon, Timu and other major air cargo companies.

I was asked to present with my team. Oops, one second, letting people in here. I was asked to present with my team a proposal to the group interested in funding the acquisition of the properties, funding the development and becoming tenants as well in the airport.

Within the group, there is a bank, two logistics companies, ground service company, bulk petroleum, free trade zone owner and operator and the aircraft company, various group. Maintaining the land lease and build to suit tenant build out model. With your experience, please review the following proposal on how to incorporate the group into the project and please advise Sharif if it is appealing for all.

Edgar then lists out his proposal, which was a land lease, developer build to suit or tenant build out. He goes into detail on the entity and the development and his main question for you, Sharif, because you’ve reviewed all those details is, if the company going into the land lease with FireFund has a 30-year contract to handle Amazon’s cargo, knowing that the company or the tenant has to build a facility to accommodate Amazon, could the company and FireFund obtain a corporate guarantee from Amazon to secure the land lease and develop with the tenant who is providing cargo services to Amazon? Okay, great question. You’re on the right track with this one.

As a general concept in business, I wanna share a few things because this is big, big deal. I mean, you can make one signature, one move here, there could make millions in difference over the 30-year transaction. The key thing, in my opinion, after I’ve done deals for over 40 years of my life and I’ve worked for a billionaire and I’ve had students for 25 years, I’ve seen so much every week of my life, I’ve seen so much.

Just this last week, what I’ve seen has been phenomenal, okay, what we’re dealing with. I am a proponent of the evolution of somebody in the business of investing. In the beginning, a person wants to be involved in every little piece.

So let’s say you’re gonna develop a land, you wanna know how the architect works, you wanna know how the civil engineer works, you wanna know how to go to the city and stand in line and get this, and you wanna get the project manager and you wanna actually work with the project manager and you wanna be involved in every detail and it’s so stressful. Then you come home, you can talk to your wife or husband and kids and every noise bothers you and you can’t sleep enough and it’s just like stress, I’m gonna make the world out. You can go and cry by yourself in the corner, feel alone and feel the world is against you.

And then one day you say, wait a minute, maybe I can start delegating things and creating incentives for others and maybe get a little piece of the pie. I think it was Andrew Carnegie who said, I prefer to have 1% of 100 men than 100% of men. And he said men because at that time men were working and women were raising kids and taking care of home.

Let’s make America great again. No, I’m just kidding. Okay, I’m just giving you an example of how it used to be and that’s why I talked about men.

So my work has evolved into I just do what I like and I have a great team and I work with the team and I keep adding team members, changing team members, bringing the experts and giving them this and that. So when you are at this level, Edgar, that you’re controlling the land and you’re dealing with these big companies, try to have the least amount of work and obligation and effort on your side and shift the risk to them. So for example, they say to you or to us, because you can always assign to me or them, but this is so big you can do it by yourself because of the way it can be structured.

Try to say to them, it is the land you build. Oh, you want business? You go ahead and do it. Oh, you want me to kick in tenant improvement? No, I’ll give you a year free this and that.

So let them do the work because the work specifically for these cargo and these capital groups and the logistics behind all this is so complicated that we need them to deal with their expert at their timeframe with their expenses. That’s the general idea, number one. Number two, to answer your question regarding, because they’re gonna be dealing with Amazon for 30 years, will they be able to, you think, get a corporate guarantee from Amazon? Let me explain to you in general that the larger a company is, the more difficult it is to deal with them.

Why? Because they have a team of attorneys that do nothing but handle lawsuits. Like Elon Musk just the other day said, well, the minute a company goes public, they have to deal with so many lawsuits. It’s overwhelming if somebody cares that much about the lawsuits and the hassles.

So I have to have a team of attorneys just handling the lawsuits. I mean, Walmart, I think they have, I don’t know how many lawsuits per day. They calculate it per hour now.

Somebody slipped and fell. Somebody took a product that backfired on their, whatever, et cetera, et cetera. So Amazon in particular, run by Jeff Bezos, Jeff walks around and smiles and all happiness, but the guy every day from 30 years ago works daily on improving the delivery, the products, the systems, the machinery, et cetera, et cetera, et cetera.

So they’re not gonna give corporate guarantees. Try to do that from Google. They don’t give corporate.

They would only give a corporate guarantee if they’re gonna lease a data center, lease a place that they cannot buy, but they want that location, et cetera. So let’s be realistic. If you’re dealing with the company, this company, I suggest let them do the development, let them set it up for them.

And the more they, here’s the good part. The more they invest, the more they cannot leave. The more they spend the time analyzing something and do all the logistics, the more you got them by the throat.

And since they took, there’s another competitive land that it seems like they made a deal with somebody else. You’re now getting in a better position all the time. So make it easier for them to come in, make it easier for yourself to deal with them, shift the risk to them and let them continue.

If they can get a corporate guarantee from Amazon is great, but just let them come in unless I’m misunderstanding something. Any comments, Edgar? Sharif, may I, when you get a chance? Yes, sir. Okay, Edgar, step in for a second just so we can hear his side first, Todd, if you don’t mind.

I’m just, I wanna add a bit of terminology on what you’re saying. You wanna pass the heavy lifting onto the others, but you wanna make sure you have oversight. So put yourself at the higher position, always hold yourself higher, but pass off the heavy lifting and keep the oversight.

And if you have to hire somebody for the oversight, go find somebody. You don’t tell them, just go get them and tell them I have somebody when you get somebody. Cause you have to know your boundaries, right, Sharif? You have to know where your expertise stops.