How to Negotiate Leases & Buy Real Estate at 70% Off

Gregory P Schenk (00:00)

Last year I had my biggest assignment ever and we were this close to finishing and they dealt with the Department of Defense, with the federal government and everything got put on hold and it killed the deal and it would have been over a $30 million deal making me hundreds of thousands of dollars. So extremely frustrating, totally out of my control, nothing I could have done to change it. But that unfortunately is the nature of the beast of our business. It’s high risk, it’s high reward. Now, if most of your listeners are investors,

They probably don’t give a shit about that. What they care about is what are the opportunities out there now and what are the risks that are out there now? Well, because the vacancies are so high in the office market, those with deep pockets and a high risk tolerance can steal buildings in many downtown markets at 30 and 40 cents on the dollar.

So I don’t know how many of your people are into that niche and that sector. There’s a lot of different niches. There’s a lot of different sectors and every market is different. But if you said, where’s one opportunity, that’s it.

Quentin (02:30)

everyone. Welcome to the Investor Fuel Podcast. I am your host Q Edmonds. And today I am joined by a gentleman who’s man, he’s done a lot. He has done a lot. We talk about somebody has 39 years experience ⁓ exclusively as a tenant rep. We’re talking about 30 years of speaking and teaching and training and mentoring and coaching. And we all talk about 30 years of investing. So listen, this is the one you need to key in in.

You know, we sit on the edge of your seat because I know this man is going to give us a wealth of knowledge. And so I am so excited to be joined today by Mr. Greg Schenk. How you doing today,

Gregory P Schenk (03:09)

doing awesome. Thank you for having me.

Quentin (03:11)

Absolutely. How was the intro? I didn’t misrepresent you, right? Everything I said is spot on, right? Absolutely, man. Absolutely. Listen, I know our listeners are really going to get a lot from what you have to say. And so I’m just ready to dive in so we can get to know about you. And so, you know, of course, people that getting to be familiar with you for the first time, I want you to take them into your world. Let them know what your main focus are these days.

And if you don’t mind, tell them what markets you’re operating in, Mr. Gray.

Gregory P Schenk (03:39)

Sure. So my name is Greg Schenk with the Schenk Company in Columbus, Ohio. I’ve lived here most of my adult life. I was fortunate to get a scholarship to The Ohio State University. When I got out of school, I didn’t have a clue what I wanted to do with my life. I just knew I didn’t want to be poor anymore. Five years later, I matriculated into the commercial real estate business with the largest company in the world. I knew no one. I didn’t own a suit. I didn’t own a car. I didn’t have a nice pair of shoes, but I had a work ethic and a strong will.

and desire to be the best I could be. I shook about 5,000 hands the first two years. This is before the internet, before cell phones, and I made a lot of contacts. And I teach and I live a relationship approach to business. And I made a lot of wonderful contacts. My main business is representing tenants, buyers, and investors, mainly office tenants that are leasing office space, renewing that, or sometimes buying.

as well as helping wealthy investors purchasing investment property. We have experts, other tenant rep experts in a hundred cities around the world. So even though the majority of my businesses in Columbus and central Ohio, which is the second fastest growing city in the country, we do have people all over and I’ve done assignments in probably 20 some states. I’ve spoken 23 states. I’ve spoke for about every type of conference and organization that you can imagine. I’ve written a book.

⁓ I bought property, I think I own 15 states now, mainly value add apartments, I own a strip center. I just invested in a mobile home park in South Dakota last year. So I have a variety of things. I’ve owned my own office building. I’ve owned a multi-tenant office building. I’ve owned raw ground. I’ve owned model homes. And I built buildings for clients, office buildings, daycares, multi-use buildings, flex space, as we call it, office warehouse.

There’s not too many niches that I don’t have an expertise in, but my main one is the office space for my clients and probably value-add apartments for my personal investing in the clients that I’m helping to invest.

Quentin (06:27)

Mr. Schenk you sound like you’ve been a busy man, You sound like you’ve been…

man, and what caught my attention, you told, I believe you said this and I was taking down notes because man, you was giving me a wealth of different things. But when that tenant rep, when you talked about that, you said you’re the only one that can do what you do in Ohio. Is that correct?

Gregory P Schenk (06:45)

I’m the exclusive one in Columbus and I banded together with other ones around the world. So the difference is a listing agent represents the seller or their landlord. They put a sign out and they wait for somebody to call. I never liked selling anything to anyone. I wanted to help companies get what they want. So I don’t sell anything. I help companies acquire property whether it’s

Quentin (06:47)

Columbus, okay.

Gregory P Schenk (07:08)

Renewing a lease at better terms and condition, which about 80 % of companies do. Restructuring an existing lease. Again, a lot of people working from home, they’re downsizing, right sizing to a space that’s better for them in this new world culture that we’ve gone through. Or relocate to a new site in the same city or opening up in a different market. And then I’m helping wealthy investors.

Most brokers, 99%, are listing agents representing the seller or the landlord. In 1989, a law came out called the agency disclosure law, and almost every state adopted it within a few years. So every time you do an assignment, you sign a form saying, who do you represent, the tenant or the landlord, and we always represent the tenant.

So that lets each party know who represents who. Before that, it was let the buyer beware. And a lot of people were getting scammed. A lot of times, the listing agent will try to what we call double dip, represent both the seller and the buyer, or the landlord and the tenant. And you cannot serve two masters. So that’s why our niche of the business grew. You may have heard of a fee-only financial planner that only represents you. It’s the same.

Quentin (08:12)

Hmm.

Gregory P Schenk (08:20)

type of logic in that. So our business has grown dramatically because a lot of people were getting screwed over. And on the commercial side, you may only be renewing your lease every five or 10 years. You don’t know what the market’s changed. You don’t know what the build-out cost is. You don’t know what any incentives are. So you’re going blind most of the time. And we tell people, doing this on your own is like going to court without an attorney. You could do it, but it really wouldn’t be a good decision to do it.

Quentin (08:47)

Yeah, No, Mr. Greg, I hear you, man. It sounds like to me, you have a pretty smooth running operation. What’s the key to keeping that machine running smoothly?

Gregory P Schenk (08:58)

Relationships, it’s a people business. They have to trust you, like you, and know that you know what you’re talking about. So I study the market every day, two or three hours. I call it keeping my finger on the pulse of what’s happening in each market. And because I speak and teach around the country, I have these conference calls with the other brokers, and I get insight on what’s happening at their markets. So today I had a conference call for a project I’m working in outside of Milwaukee.

And I talked to a local broker there that gave me the insight to help my clients make some critical decisions in that market. So today with computers, with software, with AI, there’s still a lot of things that are very helpful, but you don’t know is this landlord a good landlord? Does he have money to do the build out? Is he a long-term holder of this project or is he looking to flip it? Is he going to lose it to the bank? Because there’s a lot of areas where, especially in downtowns around the country,

market is so bad that buildings are selling for 30 cents on the dollar. So that market knowledge will make or break company if they get in the wrong situation.

Quentin (10:37)

I love it. I love it. ⁓ Thank you for sharing this, Mr. Greg. Now, every operator I know, right, they have a moment when things get real. Maybe a deal goes sideways or a time they had to pivot fast. You mind sharing one of those moments with us, Mr. Greg?

Gregory P Schenk (10:51)

Well, I had a full head of hair when I got in this business, so I’ve had a few other mugs.

Quentin (10:56)

Yeah, yeah.

Gregory P Schenk (10:57)

But

Last year I had my biggest assignment ever and we were this close to finishing and they dealt with the Department of Defense, with the federal government and everything got put on hold and it killed the deal and it would have been over a $30 million deal making me hundreds of thousands of dollars. So extremely frustrating, totally out of my control, nothing I could have done to change it. But that unfortunately is the nature of the beast of our business. It’s high risk, it’s high reward. Now, if most of your listeners are investors,

They probably don’t give a shit about that. What they care about is what are the opportunities out there now and what are the risks that are out there now? Well, because the vacancies are so high in the office market, those with deep pockets and a high risk tolerance can steal buildings in many downtown markets at 30 and 40 cents on the dollar.

So I don’t know how many of your people are into that niche and that sector. There’s a lot of different niches. There’s a lot of different sectors and every market is different. But if you said, where’s one opportunity, that’s it.

Some of these are in what’s called opportunity zones that are very good tax incentives wise. And I’m not a tax person. I’m not giving ever tax advice. But there’s opportunities in every niche, in every segment, in every market.

It’s harder to find it than it used to be because there’s so many more people now looking to get into the investment sphere. So that’s why someone like me that knows the market that can help them go from a shotgun to a rifle and get them exactly what they want, not selling them something, but getting them the right kind of property for their risk tolerance, for their hold period with an exit strategy in place with the right experts surrounded to get the kind of expected returns that they want.

And again, everybody’s different. You may want a 3 % return. Your wife may want a 7 % return. You may be in with a group of people that want to hold it for 10 years and you only want to hold it for two years. there’s everybody different. So we have a form on our website, one for tenants and one for investors that kind of goes through a questionnaire, the who, what, why, when, and why. So how much do you have to invest? How much are you comfortable investing? How much can you borrow? How much are you comfortable borrowing?

What kind of property do you want? Do you even care? Is it just the return? Does it have to be in your backyard? It can be all over the country. So we’re going to ask every question that’s important to them. And again, there’s no right or wrong answer here. It’s what you’re going to be comfortable with for investing, no different than investing in a stock or a mutual fund. So when we’re helping somebody buy a property, we’re going through that. And some people will just say, get me a 7 % return with a long-term lease in place.

Other people say, no, I got to have it in Columbus, Ohio, around the corner so I can show my golf buddies that I’m the big dude. So everybody’s different when it comes to that. So I own property I’ve never physically seen. When I started, that wasn’t the case. Everything was in my backyard. So the more experience you get, maybe you’ll take a little bit more risk. The higher your net worth gets, maybe you’ll take a little bit more risk. But.

If you’re married and you’ve got five kids and three are in college, it might be different than if you’re single and don’t have any of that. So I try to find the risk tolerance. What’s going to let them sleep at night? What’s going to keep them up at night is usually the biggest question.

Quentin (14:48)

Yeah, man, I can definitely hear your 30 years of experience, 30 plus years of experience that comes shining through, man. And I think that’s a testament to why you have lasted so long and probably will continue to last as long as you want doing whatever you want to do, Mr. Craig. And so I can just hear that experience shining through, man. So thank you so much. Let me ask you this. What are you most focused on solving or scaling next? What’s the next real goal for you?

Gregory P Schenk (15:13)

Well, my goal is to help everyone get a foundation for lifelong success. They said the average person in America doesn’t have $500 for an emergency, which is really sad. I bought a car the day I turned 16 from being a golf caddy, and I grew up with nothing, very little. Again, at 21, nothing. So I think if people learn financial literacy, personal financial responsibility, and a work ethic at a young age,

There are opportunities in life for just endless. Almost every one of my friends is self-made millionaires. Hard work, hard work, hard work, not being afraid to fail, sometimes moving out of town when you didn’t want to, taking a job in a different city, different market, and understanding risk and the level. And probably the biggest thing that most people don’t do is pay yourself first every time you get a paycheck. $10, $10,000, $100,000.

If you took a minimum of 10%, I try to do 20 to 50%, but if you took a minimum of 10 % of every paycheck and invested it, whether it’s an index fund, a stock, a mutual fund, or in real estate partnerships like I do, you’re going to have a good chance to have financial security at a much younger age. So that’s my real pet peeve, my goal in life until the day I die is to educate every person in that. And the more people I can do from

every kind of background. There’s people that have a lot of money that aren’t necessarily smart financially. The Vanderbilts is a perfect story that were billionaires back in the day and within three generations they had blown it all because they didn’t have financial literacy education. They bought material things, not income producing assets. So it’s buying income producing assets, not fancy watches and fancy cars and more houses that are just costing you the upkeep.

So teaching people that is my goal. And then I just did a podcast series this summer. We just did the seventh one on different niches within real estate to educate people. So this week we did one on apartment investing. We did one on a warehouse investing. We did one on residential real estate. We did one on a commercial market overview from every product type. So my goal is to educate people in these areas to help them understand the risk, the rewards, the time it takes.

Most of these take a lot longer. It’s not like buying a stock and 20 minutes later your trade is confirmed. It’s a lot different.

Quentin (17:29)

and I really appreciate this experience that you’re giving. I love the fact that you want to educate the next generation on financial literacy. I love everything about your perspective and the way your lens how you see things. And so I want to access because I really believe it will benefit people hearing this. They’re on different parts of their journey. They’re looking to level up. They’re making moves, but

I want to hear from you when it comes to building relationships and growing your network, what’s made the biggest difference for you?

Gregory P Schenk (18:02)

Getting first. All right. So many people got their hand out and want to be a taker. So when I moved here to town, I had no money, but I had time. So I volunteered at a lot of charities. And you’ve heard that you’ve heard the word probably you’re going to turn around. You’re going to turn out like the five people you hang around most. If you hang around good, uplifting, mentally stimulating, outgoing people, there’s a good chance you’re going to turn out like that. If you go to the bar every night.

you’re probably going to turn out like that. So I didn’t know anybody. I got involved with these charities and started volunteering and giving them my time before I had any money and made some great contacts. One of the best books I ever read, Stephen Covey, Seven Habits of Highly Effective People. He says, Seek first to understand, then be understood and listen without the intent to reply.

which I believe is the hardest skill there is in life, especially for an impatient guy like me. So if you can do that, you’re going to go places in life. You’re going to surround yourself with the right people because they know you’re there for the right cause.

Quentin (19:03)

Absolutely love that. Yeah, you can’t fake relationships. You can’t fake your intent. And that book, that book is amazing, man. And so thank you for dropping that quote, because that book is absolutely amazing, man. And so I thank you again, Mr. Greg. Listen, before we wrap, if someone wanted to reach out to you, connect with you, maybe collaborate or learn about more of what you’re doing, what’s the best way for them to reach out to you,

Gregory P Schenk (19:26)

Well, my website is schenkcompany.com, S-C-H-E-N-K, company spelled out dot com. My YouTube channel is just my name, Greg Schenk. We’ve got the last seven episodes of this podcast series. I also have a separate website for my training, schenktraining.com. So I’m pretty easy. They can Google me in two seconds. They’ll find me. There’s not too many guys with a big bald head that are sitting there on the camera. But I’m here to help everyone.

Small companies, big companies, investors, nonprofit groups. I mean, we’ve literally helped about everyone. And again, I have people in almost every market. I’ve done deals in 10-buck-2 small markets as well as mega markets. And if I don’t have the person, I’ll get you the person. And our two forums really help out for a lot of food for thought, kind of where you’ve been, where you are now, and where you want to go, or the investor questionnaire.

really have give you some food for thought. Then the other thing we really do is we’ll connect them with the right contacts, what I call trusted advisors they may not have. A real estate attorney, not a general attorney. A commercial banker, not a residential banker. An accountant that understands real estate. A financial advisor that only looks out for your interest. People like contractors, property managers, phones, furniture, wiring, cabling, anything they would need for a user or for an investor.

Quentin (20:46)

I it, but there he is everyone. Mr. Greg Schenk, listen, sir, I thank you for your time. I thank you for your story. I thank you for your perspective. We definitely need more people like you in this space that’s thrown it the right way. So, sir, thank you so much for being here today. I appreciate you, man.

Gregory P Schenk (21:02)

Well, thank you for having me. I’m happy to come back anytime and talk about a different topic.

Quentin (21:06)

I love it, man. Thank you so much. Listen, for those who’s tuning in, if you have found value in this conversation, please make sure you are subscribed. You do not want to miss out on these conversations. so Mr. Greg, thank you again and everyone. Thank you for tuning in.

Gregory P Schenk (21:23)

Thank you, everyone.