Industrial Flex Space Investing With Joseph Sargo
Industrial flex space investing can provide real estate investors with an alternative to traditional multifamily strategies, particularly when smaller businesses need a combination of warehouse, office, and potential retail space. In this episode of Multifamily Rockstars, Joseph Sargo shares how he moved outside his traditional real estate experience to pursue a 20,000-square-foot industrial flex development in Hollister, Missouri, near Branson. The project is designed to contain 10 units with additional leasable loft space, creating flexibility for different types of commercial tenants.
Why Joseph Sargo Entered Industrial Flex Space
Joseph Sargo comes from a business background rather than a traditional real estate development career. He has operated an automobile supply business serving movies and television productions for 25 years, while his interest in real estate developed from observing people around his family build wealth through property. He has been involved in real estate for approximately 20 years, including smaller projects and owning his business warehouse. His experience as a business owner gave him an understanding of commercial property from the perspective of an owner and occupant.
Sargo originally expected to pursue multifamily real estate, but an opportunity introduced through a broker led him toward industrial flex development instead. His connection to the Branson area came partly from spending time in northwest Arkansas and becoming familiar with the region’s growth and development. A broker connected Sargo and his partner with the property opportunity and subsequently helped introduce them to the builder who became an important part of the development team.
Building the Right Team for an Out of State Development
One of the most important lessons from Sargo’s experience is the role of a strong local team when investing outside your home market. Sargo was based in New Jersey while developing the project in Missouri, and he had never previously developed industrial flex space. Rather than attempting to personally handle every aspect of the project, he relied on a broker, builder, and other local professionals who understood the market and helped solve problems throughout the development process.
For investors considering industrial flex space investing in an unfamiliar market, Sargo’s experience highlights several important team-building considerations:
- Find professionals with established local relationships and market knowledge.
- Work with experienced brokers and builders who understand the property’s specific asset class.
- Build a team capable of handling local issues without requiring the investor to manage every detail personally.
- Use local relationships to better understand development opportunities and tenant demand.
Sargo also describes how his existing relationships helped him purchase the warehouse used by his business. After attending a local town meeting, he received information about an upcoming redevelopment opportunity and quickly approached his landlord about purchasing the building. The seller ultimately agreed to hold the mortgage, allowing Sargo to acquire the property through seller financing.
Financing an Industrial Flex Development
Financing was another significant component of the project. Sargo and his partner contributed substantial capital themselves, purchased the land before construction financing, and funded the initial portion of the build. They ultimately worked with a local bank for the construction loan and discussed an interest rate of approximately 6.89% at the time of financing. The project was being financed as a construction loan rather than a fully converted permanent mortgage.
The financing approach demonstrates why investors need to understand the capital requirements of development before committing to a project. Construction financing can involve different structures and requirements than the permanent financing used after stabilization, so investors need to account for equity, construction draws, timing, and the eventual transition into longer-term financing.
Leasing Strategy for Small Businesses
After completing the construction, the next challenge was filling the building with tenants. Sargo and his team focused their marketing efforts on businesses that could benefit from a combination of warehouse and office functionality. The building’s design also allows for flexibility, including the potential to replace bay doors with storefronts when appropriate for a tenant.
This flexibility expands the potential tenant pool beyond businesses that need traditional warehouse space. Sargo describes targeting businesses that may have a retail presence, office needs, storage requirements, or a combination of these uses. At the time of the conversation, the team believed they had three potential leases, including possible manufacturing tenants.
The Potential of Micro Flex Space
Sargo also discusses the growing interest in what is sometimes referred to as micro flex space. These smaller commercial units can serve businesses that do not need a large industrial facility but still require dedicated space for operations, storage, office functions, or customer-facing activity. He describes units ranging from roughly 1,000 to 4,000 square feet as an area of interest in the market.
For investors researching industrial flex space investing, this smaller-unit approach is particularly relevant because it can create multiple potential leasing opportunities within a single development. The strategy discussed in the episode focuses on designing space around the needs of smaller businesses rather than relying exclusively on large industrial tenants.
Lessons for Investors Ready to Take Action
Sargo’s experience also provides a broader lesson about moving from researching real estate to actually pursuing deals. Before joining the Warrior program, he had attempted to analyze a multifamily acquisition on his own. He eventually discovered that there were important aspects of underwriting and financing that he did not fully understand, including how a lender’s classification of a property as being in a rural area could affect financing. That experience led him to recognize the importance of learning the process before committing millions of dollars to an acquisition.
His advice to investors is straightforward: start looking at properties, define the type of deal you want, research opportunities, and contact brokers. Sargo explains that he spent significant amounts of time researching properties and deals online while also leaning on his broker’s experience. His own journey demonstrates that the original plan may change once investors begin taking action and uncovering opportunities they had not initially considered.
What’s Next for Joseph Sargo
Sargo and his partners were already evaluating additional properties for similar projects and considering another development in a different city closer to a larger population center. Their next concept could involve more build-to-suit development, with the intention of selling individual units rather than simply holding and leasing the entire property.
For investors interested in industrial flex space investing, Sargo’s story offers a practical look at how an experienced business owner can leverage relationships, local market knowledge, professional teams, construction financing, and flexible property design to enter a new real estate niche. His experience also reinforces the importance of understanding the numbers, identifying the right professionals, and taking action while remaining open to opportunities outside the original investment plan.
If you want to hear the full conversation and detailed insights from Joseph Sargo, watch the podcast video or read the complete transcript below.
What Is Industrial Flex Space Investing?
Industrial flex space investing involves acquiring, developing, or operating properties that combine warehouse, office, and potentially retail functionality. Joseph Sargo discusses a 20,000 square foot industrial flex development designed with 10 units and additional leasable loft space, providing flexibility for different types of business tenants.
Why Is Industrial Flex Space Attractive to Real Estate Investors?
Industrial flex space can appeal to investors because the properties can serve a variety of small businesses with different space requirements. Sargo’s project is designed to accommodate businesses that may need warehouse space, office space, storage, or a storefront, creating flexibility in how the units can be used.
What Is Micro Flex Space in Commercial Real Estate?
Micro flex space refers to smaller industrial or commercial units designed for businesses that do not need a large warehouse or industrial facility. Sargo discusses units ranging from approximately 1,000 to 4,000 square feet and describes demand for this type of space in the market.
How Do You Find Industrial Flex Space Investment Opportunities?
Finding industrial flex space investment opportunities can involve developing relationships with local commercial real estate brokers and researching properties in markets with business and development activity. Sargo found his Missouri development opportunity through a broker connected to his business partner, demonstrating the value of local relationships when searching for deals.
Can You Invest in Industrial Flex Space Outside Your Local Market?
Yes, investors can pursue industrial flex space opportunities outside their home market, but having an experienced local team can be important. Sargo was based in New Jersey while developing his project in Missouri and relied on a local broker, builder, and other professionals who understood the market and helped manage the development process.
What Team Do You Need for Industrial Flex Space Investing?
An industrial flex space investment may require professionals such as a commercial real estate broker, builder, lender, and other local experts. Sargo emphasized that his confidence in pursuing an unfamiliar development project came from having the right team in place and professionals who could help solve local problems.
How Is Industrial Flex Space Financed?
Industrial flex space development can be financed through construction loans and investor equity. Sargo and his partner contributed capital, purchased the land themselves, funded the initial construction work, and then worked with a local bank on construction financing.
How Do You Lease Industrial Flex Space?
Leasing industrial flex space can involve marketing directly to businesses that need a combination of warehouse, office, storage, or retail functionality. Sargo’s team used Facebook advertising, local relationships, and the visibility of the property’s location to generate tenant interest.
What Types of Businesses Rent Industrial Flex Space?
Industrial flex space can serve businesses that need warehouse and office functionality or a combination of commercial uses. Sargo specifically discusses targeting businesses with retail operations that may also need warehouse space, as well as potential manufacturing tenants.
What Are the Benefits of Flexible Industrial Space Design?
Flexible design can allow an industrial property to serve a broader range of potential tenants. Sargo explains that units in his development can include office and warehouse space, and bay doors can potentially be replaced with storefronts when a tenant’s business model requires it.
What Should Investors Consider Before Developing Industrial Flex Space?
Investors should understand the market, financing, construction process, tenant demand, and local development requirements before committing capital. Sargo’s experience also demonstrates the importance of understanding underwriting and financing before committing to a multimillion dollar real estate project.
What Is the Importance of Local Relationships in Industrial Flex Space Investing?
Local relationships can provide investors with access to market knowledge, deal opportunities, contractors, lenders, and information about local development conditions. Sargo’s project relied heavily on relationships between his partner, broker, builder, and other professionals in the Missouri market.
How Can Real Estate Investors Take Action on Industrial Flex Space Opportunities?
Investors can begin by defining their deal criteria, researching properties, studying potential markets, and contacting brokers. Sargo recommends getting started rather than becoming stuck in analysis, while also emphasizing the value of learning the fundamentals and building relationships with experienced professionals.
00:00:28:24 – 00:00:49:01
Rod Khleif
So welcome back to multifamily Rock star. So as you guys know this is where we do deep dives in our in our guests deals. And we try to give you actionable advice for your first deal. So you actually take action and do something with this stuff. And so so today I’ve got Joseph Sargo on the show and Joe from New York City and, been a Warrior less than a year.
00:00:49:01 – 00:00:53:21
Rod Khleif
And, just excited to get into this deal that he took down. How are you doing, brother? Good man.
00:00:53:21 – 00:00:54:12
Joseph Sargo
How are you?
00:00:54:14 – 00:01:12:24
Rod Khleif
Awesome, awesome. So why don’t you take a minute? I know you don’t come from the real estate business. You actually kind of cool. You come from film or TV? That’s kind of cool. But, talk a little bit about that and your background and why real estate and and all that. And kind of bring us current and in your own words.
00:01:13:01 – 00:01:37:22
Joseph Sargo
Okay. Well, I started, you know, my, my core business is I supply automobiles for movies and TV shows. I’ve been doing that for 25 years. I took it over from my father, the opportunity. And, you know, we’ve grown that over the last 25 years. Real estate for me was something that I saw, in some of these other guys that my father had his friends, and I saw what these guys were doing and how they were building wealth.
00:01:37:22 – 00:01:55:03
Joseph Sargo
And they had other, you know, big projects. So for me, at an early age, I’ve been involved in real estate for quite some time. It always intrigued me, you know? So it kind of felt natural. And I, you know, been doing it for 20 years now.
00:01:55:05 – 00:02:02:13
Rod Khleif
Right? Right. Right now. That picture behind you, is that the first deal we’re going to talk about?
00:02:02:15 – 00:02:07:14
Joseph Sargo
It is it is our it is probably our our biggest deal not to.
00:02:07:16 – 00:02:11:07
Rod Khleif
Tell us what it is. It looks like, industrial flex or something. What is it?
00:02:11:09 – 00:02:35:22
Joseph Sargo
It is, it is a, 20,000 square foot, industrial flex building. It will be ten units that will have 26, 43 square footage, of leasable space because we’ll have weight rated loft space that the tenants can use. And that is located in, a sub city of Branson, Missouri, and Hollister, Missouri.
00:02:35:24 – 00:02:43:21
Rod Khleif
Oh, and by the way, for that not not not in your backyard, in Missouri. Now, Branson, isn’t that isn’t that like an entertainment area?
00:02:43:23 – 00:02:49:19
Joseph Sargo
Branson is like a summer, you know, seasonal place.
00:02:49:19 – 00:02:54:10
Rod Khleif
So don’t they have, like, the, like, the Dolly world? Just, I mean, I’m, I’m thinking of somewhere else. I’m thinking.
00:02:54:10 – 00:02:55:21
Joseph Sargo
No, that’s that’s Tennessee.
00:02:56:00 – 00:03:01:18
Rod Khleif
Tennessee. But Branson is known for something. I know that I’ve heard that name before. What’s it known for?
00:03:01:20 – 00:03:18:12
Joseph Sargo
They have, Branson has, Bass Pro. It’s the the largest bass pro. They have a museum there. And the gentleman that owns Bass Pro is big into, development in that area. And I think they have the number one theme park in the area, which that’s.
00:03:18:12 – 00:03:37:00
Rod Khleif
What that’s what I was thinking. Yeah. I thought that was like a theme park or something there. Yeah. I love I love Bass Pro Shops. I mean, that’s like crack cocaine for me, man. I love going in there. I just love it. But, so, so, so, so talk about this deal. You know, why Branson? Why industrial flex space?
00:03:37:02 – 00:03:42:05
Rod Khleif
You know, how do you find it? Just just talk to us about that deal.
00:03:42:07 – 00:03:59:01
Joseph Sargo
I’m gonna I’m going to give you a little backstory for with it. You know, just that’s how I ended up there, right? So, I’m an avid mountain biker. I travel to the Bentonville. You know, that northwest Arkansas area. I saw the development in the area enough that my wife and I had bought land, you know, to to build a house and move there.
00:03:59:01 – 00:04:19:09
Joseph Sargo
So when I was looking for commercial space, originally, I was looking in that area. Luckily for us, my partner is partner with another gentleman who’s a broker in Branson. So he had been looking for us in that that area and we were like I said, we originally looking for a multifamily and he came to us with this deal.
00:04:19:11 – 00:04:27:22
Joseph Sargo
Had you asked me in January when I joined if I was going to be in development, I would have said, not in a million years. And here we are.
00:04:27:24 – 00:04:31:17
Rod Khleif
Here we are. You want to make God laugh? You tell him your plans, right?
00:04:31:19 – 00:04:32:16
Joseph Sargo
All right.
00:04:32:18 – 00:04:33:10
Rod Khleif
So how did you gain.
00:04:33:10 – 00:04:46:22
Mark Nagy
The confidence to do this? Because I know you’re in New York, and obviously this is in a totally different state and it’s new development. How how did you gain the confidence to not only do a deal out of your state, but also a new development project.
00:04:47:02 – 00:04:54:12
Rod Khleif
As part of that, as part of that question, have you done any industrial flex space before? Either either one or you and your partner?
00:04:54:14 – 00:05:10:15
Joseph Sargo
No. I own my my warehouse where my business is in, and that’s a whole really cool story how I bought that, actually. Okay. But, really, we had the right boot in place, right? So, again, it’s kind of outside of my comfort zone. Everything.
00:05:10:17 – 00:05:19:12
Rod Khleif
That’s a book, right? That’s the clue, not how, not how. Yeah, I love it. Okay. Yeah. Yeah. Okay. So. So who was the who?
00:05:19:14 – 00:05:39:12
Joseph Sargo
It’s the team down there. It’s the military, the broker, the builder. Our builders out of California. Kind of like us, you know, East coast kind of feel. You know, and he, you know, they just made us feel right at home solving the problems without me having to worry about them. Right? Like, I’m usually like, my hands are dirty and everything.
00:05:39:14 – 00:05:49:24
Rod Khleif
So, so, so you you got the comfort in answer in answer to Mark’s question. You got the comfort by by the fact that you had a kick ass team helping you put this thing together. Would that be the right answer?
00:05:50:01 – 00:05:51:20
Joseph Sargo
For sure. For sure. Okay.
00:05:51:22 – 00:06:04:14
Rod Khleif
Okay. So, so, Well, now you now I’m intrigued and I’m intrigued. I hate to shift gears, but I want to shift gears. Tell me about the warehouse you bought. Why is that a cool story? So one is the one. The one? You’re the one. You’re my biggest.
00:06:04:16 – 00:06:19:16
Joseph Sargo
So. So I’m not, you know, like, big on going to all these town meetings and stuff. And my mom, my mom, my wife was like, look, we got to go up to this town meeting. Let’s go up there, okay? Me and my my wife and my father go to the town meeting. My dad knows everybody. Been in the area 50 years, right?
00:06:19:18 – 00:06:21:02
Rod Khleif
Right. One of those guys got it?
00:06:21:02 – 00:06:38:05
Joseph Sargo
Yeah. So after the meeting, the mayor comes up to me and he puts his arm around me and he’s like, listen, kid. He goes, you got to buy your building. I said, okay, this. I said, why, what’s going on? He goes, well, we got to Fedex is coming in. The whole area is under redevelopment. You know, in in a year or so your property be worth double.
00:06:38:07 – 00:07:00:15
Joseph Sargo
I said, okay. The next morning I called my landlord and I said, I want to buy the building. We had about a 15 minute conversation. I’ll shorten it up, but it was pretty much okay. What do you want to pay? I offer, I made him an offer. He countered, I said, okay, I’ll give you your your offer. But you hold the mortgage.
00:07:00:17 – 00:07:24:03
Joseph Sargo
He said, okay, I’ll hold the mortgage. You gave me a number back. You come up with this number, I said, okay, I didn’t have that number. I said, okay, and we bought the building. You know, I’m in that building right now. And had I not bought the building after Covid and all the things that have happened, and the cost of the these buildings around here, I would, I would be out of business essentially.
00:07:24:03 – 00:07:25:07
Joseph Sargo
Yeah. You know.
00:07:25:09 – 00:07:37:18
Rod Khleif
You know, it’s not what you know, it’s who you know. And and that just speaks to the fact that your dad that built those relationships. So the mayor comes up and says, I’m going to help this kid out and tell them what to do because they know what’s going on.
00:07:37:18 – 00:07:38:23
Joseph Sargo
I mean, yeah, 100%.
00:07:38:23 – 00:07:47:00
Rod Khleif
Yeah. Right. I mean, yeah, you know, the look at Pelosi, what did she make 100 grand a year now she’s worth 40 million. 50 million. Whatever it’s is.
00:07:47:01 – 00:07:48:24
Joseph Sargo
I like that I like that multiple.
00:07:49:01 – 00:08:05:19
Rod Khleif
Yeah, yeah. Anyway. Yeah. But but anyway so so back to this, Branson, Missouri thing. Your broker brought you the land. And and how did you connect with the other pieces of this, the other players, this, this team? How did that all come together?
00:08:05:21 – 00:08:07:10
Joseph Sargo
Through the broker? Through the.
00:08:07:10 – 00:08:08:17
Rod Khleif
Broker. He knew him, okay?
00:08:08:18 – 00:08:22:22
Joseph Sargo
The broker knew the builder introduced us to the builder. And honestly, rod, I was out there a couple of weeks ago at the property. And pictures don’t even do it justice for location where it is really nice. It’s up on a hill. It’s on 65. As you come into this.
00:08:22:23 – 00:08:24:13
Rod Khleif
Is it completed now?
00:08:24:15 – 00:08:28:17
Joseph Sargo
It should be completed by the first of the month. Is what I’m being told of December.
00:08:28:19 – 00:08:31:12
Rod Khleif
Okay. Wow. Wow, you’re almost there. It’s coming. Oh, yeah.
00:08:31:14 – 00:08:31:21
Joseph Sargo
Yeah.
00:08:32:01 – 00:08:48:02
Rod Khleif
How are you going to. You know, I mean, let’s drill down on on industrial flex space a little bit. We had someone else on not that long ago. You know, guys, by the way, those of you listening, I mean, the warrior program. Yeah, they own what my warriors own. Probably close to 300,000 units. We we we can’t even keep track anymore.
00:08:48:06 – 00:09:10:18
Rod Khleif
We know it’s over 277,000, but every other asset class is represented. Lots. Lots of industrial flex space, lots of senior housing, lots of self storage, student housing and, you know, hotel conversions, you name it. But anyway, let’s drill down on industrial flex a little bit. So you put it together, you built it. Now you got to lease it.
00:09:10:20 – 00:09:27:00
Rod Khleif
So talk about. Yeah. Are there some market dynamics there that make it exciting number one. And then talk about how you’re going to go about filling it up. What what what are your marketing methodologies and or relationships or whatever that you’re going to utilize?
00:09:27:02 – 00:09:31:08
Joseph Sargo
Okay. So that’s probably the scariest part of the whole thing.
00:09:31:10 – 00:09:32:11
Rod Khleif
Okay.
00:09:32:13 – 00:09:33:12
Joseph Sargo
You know, because.
00:09:33:16 – 00:09:34:17
Rod Khleif
Lisa.
00:09:34:19 – 00:09:52:12
Joseph Sargo
Now I got it. Now, now I got to make it happen. Right? So again, the team down there has done a really good job of with the marketing. We’ve been marketing. We went actually we’ve been going really strong right now, Facebook ads and stuff like that. We have a, my realtor and the builder have, pretty good local, presence.
00:09:52:14 – 00:10:10:21
Joseph Sargo
Also, the location of the building has gotten a lot of eyes on it. So there’s been a lot of interest in that respect. We believe that we, probably have three leases already. And what we’re thankful for is that we believe that at least one, maybe two of them are in manufacturing, which would be a tremendous help.
00:10:10:23 – 00:10:16:02
Joseph Sargo
With the new big, beautiful bill. And it gives us, some tax incentives there for manufacturing.
00:10:16:08 – 00:10:23:20
Rod Khleif
Oh, cool. Oh. Very cool. So. So are you targeting, you’re targeting small businesses? I take it we are.
00:10:24:00 – 00:10:33:03
Joseph Sargo
We’re targeting, you know, businesses that have a, you know, a, retail presence and maybe a small storefront that needs a little bit of warehouse space.
00:10:33:03 – 00:10:37:21
Rod Khleif
Oh, even retail. Oh, not retail. They’re retail somewhere else. And they need storage.
00:10:38:02 – 00:10:45:07
Joseph Sargo
No, you could be retail there. There’s office in there, and you could, you know, just because it has the bay door, you can you can still set up a storefront.
00:10:45:07 – 00:10:45:20
Rod Khleif
Okay.
00:10:45:20 – 00:10:49:07
Joseph Sargo
We can actually replace the bay door with a storefront. If the client at the.
00:10:49:10 – 00:10:53:14
Rod Khleif
Oh that’s cool. It’s got enough visibility for that to be viable.
00:10:53:16 – 00:10:55:03
Joseph Sargo
Oh, yeah. Definitely.
00:10:55:05 – 00:11:08:13
Rod Khleif
Oh, wow. That’s unusual. That’s not true. Yeah. A lot of times you’ll see industrial flex space right off a highway to, you know, you see it off to the side, but, okay. And, and so three out of the ten you think may already be leased.
00:11:08:15 – 00:11:25:02
Joseph Sargo
Yeah. Well, we definitely have one, which is our builder. He’s actually going in there. Yeah. So, it’s been also really good for him as well because of the location and the people seeing it. It’s he’s gotten tremendous amount of additional work.
00:11:25:04 – 00:11:42:12
Mark Nagy
Now, what about the financing on this? Because I’m doing a new construction project myself right now, 14 units. And I know the key to that project was financing. We got interest only for the entire term of the loan, so we don’t have to put a bunch of money down. What about you? Tell us about the financing on this deal, how you secured the financing.
00:11:42:12 – 00:11:46:15
Mark Nagy
If there was funds you had to raise. Give us some details on that.
00:11:46:17 – 00:12:07:14
Joseph Sargo
Okay. So we went into this a little strong. My partner and I, we went. Yeah, we did. Because we didn’t want to have a problem with financing. So, but we did go with a local bank. And what does that mean? We put up a pretty significant amount of money. We purchased a land prior. We did ourselves.
00:12:07:14 – 00:12:07:20
Joseph Sargo
We didn’t.
00:12:07:23 – 00:12:11:18
Rod Khleif
And which which includes which contributes to the equity for sure.
00:12:11:20 – 00:12:34:22
Joseph Sargo
Yeah. And we also, we pretty much did the first, draw for the build. And we again, we went with a local bank. We actually did really well with the local bank. And I think we’re at six, eight, nine interest rate, which was pretty good for March of last year ish or something like that. Yeah.
00:12:34:22 – 00:12:36:04
Joseph Sargo
So it’s, it’s 30, 30.
00:12:36:04 – 00:12:40:22
Rod Khleif
Year, 30 year am, 30 year am, five year balloon. That’s very typical. What you got.
00:12:40:24 – 00:12:46:16
Joseph Sargo
Well, we haven’t secured it into a full mortgage. It’s a construction loan up until. Yeah.
00:12:46:18 – 00:12:55:07
Mark Nagy
So what was the term. And then information on that. Was there any I or was just a regular term?
00:12:55:09 – 00:12:58:17
Joseph Sargo
It was just a as far as I don’t have the term sheet yet. Like it.
00:12:58:18 – 00:13:03:11
Rod Khleif
Yeah. On the construction financing. And you’re not going to typically CIO. Well.
00:13:03:11 – 00:13:12:14
Mark Nagy
That’s right. Yes. Because I have I owe for the entire term on our construction loan on a local bank. That’s the only reason why I asked that question. Yeah. For for two years, for the entire term period.
00:13:12:16 – 00:13:14:10
Rod Khleif
Okay. Okay.
00:13:14:12 – 00:13:15:18
Joseph Sargo
Yeah. No, I don’t understand.
00:13:15:22 – 00:13:17:00
Rod Khleif
I stand corrected.
00:13:17:02 – 00:13:30:10
Mark Nagy
Okay. So you guys are just making regular as you as you pull the draw van, you’re just making the regular payments as you’re doing that. And what’s the timeline on that from when you got that loan to when I mean, December 1st. What what’s the timeline on that entire project?
00:13:30:12 – 00:13:53:16
Joseph Sargo
So the timeline on the entire project was we started our build in roughly, May June, and we funded that part of it, the beginning of it. And we didn’t really go to the bank until about September. That’s the draw. Yeah. It’s very it’s really set ups. I’ll tell you why. It’s very little regulation that went on the town.
00:13:53:18 – 00:14:00:02
Mark Nagy
That’s what I was going to ask you about. How did you get it so quickly without all the red tape of new construction and all that?
00:14:00:04 – 00:14:01:22
Joseph Sargo
Who you know.
00:14:01:24 – 00:14:03:09
Rod Khleif
It’s Branson, Missouri, man.
00:14:03:09 – 00:14:04:00
Joseph Sargo
It’s that simple.
00:14:04:01 – 00:14:04:15
Rod Khleif
It’s really.
00:14:04:15 – 00:14:18:09
Joseph Sargo
It’s it’s it’s my builder and my realtor. I’ve been in the area my my realtor pretty much wrote the book on, single family like Airbnb rentals for that area because nobody was doing it. So these guys.
00:14:18:09 – 00:14:19:24
Rod Khleif
The good old boy network.
00:14:20:01 – 00:14:21:09
Joseph Sargo
Yeah, they’re tired, but.
00:14:21:09 – 00:14:29:05
Mark Nagy
Now I’m getting curious. What was this part of? What made it a good deal? You knew ahead of time that you could just move super quickly, or is that a nice bonus?
00:14:29:07 – 00:14:48:11
Joseph Sargo
It was a nice bonus, but but they had told us prior to and I had I had actually spoken to the city and they were in love with the project. They loved the idea, they loved the where it was going to be location wise. So they were they were all for it. They approved, you know what I was shocked at is, you know, coming from where I’m at, right?
00:14:48:12 – 00:14:55:15
Joseph Sargo
I’m in New Jersey. You can’t even step on a piece of property without like, you know, certainly it’s. Yeah.
00:14:55:17 – 00:15:14:21
Rod Khleif
You know, like that election didn’t go the way, the way we wanted, but that’s another story. But anyway. Yeah. So, so you know I’m looking at I’m looking at the, the framed out building here, behind you. And it’s kind of cool because you can kind of see, you know, you’ve got the plumbing stub outs in the floor where the bathrooms got to be, and then the rest, of course, in the back is going to be all warehouse.
00:15:14:21 – 00:15:28:09
Rod Khleif
So it’s kind of cool to see this stage, you know, and recognize what what what what it means. But but, did the fact the steel construction’s probably a lot faster than people might think as well, right?
00:15:28:11 – 00:15:52:02
Joseph Sargo
For sure. And again, our builder has a relationship with the manufacturer. So, his orders go in pretty quick. And we we had a basic design for this building for a while before we, you know, for a while. So it was. No, it was, it was the steel was on the ground in step number. I think the steel was on the ground mid-September.
00:15:52:04 – 00:15:54:17
Rod Khleif
Well, you know. So what why did you come in and work.
00:15:54:17 – 00:16:08:02
Mark Nagy
With us then? Because you correct me if I’m wrong, but you seem like a ready fire ame type of guy. And the way that you’re doing things and so many people struggle with fear, and that’s like the hardest part. Obviously that’s not you. Why don’t you come and work with us?
00:16:08:04 – 00:16:09:17
Joseph Sargo
Why did I come to work with you guys?
00:16:09:17 – 00:16:11:14
Rod Khleif
Yeah, yeah. Become a warrior. Yeah.
00:16:11:16 – 00:16:29:11
Joseph Sargo
A why did I become a lawyer? Oh, I mean, it was it was easy for me. Like, probably the first thing that it was, was the way that you talked about mindset, you know, your relationship and the way that you worked with Tony Robbins. That, to me, is where people really fall short, and beat themselves up.
00:16:29:11 – 00:16:45:07
Joseph Sargo
And I thought that was that part was fantastic for me. And then it was about being in the room and having access to people that were really doing what I wanted to do, and that was the second biggest reason.
00:16:45:07 – 00:16:51:01
Rod Khleif
So did you join in boot camp or did you did did you just join? I did, you know.
00:16:51:03 – 00:17:05:03
Joseph Sargo
I watched the boot camp. I did go to one of the virtual boot camps. Okay. I think I only got to watch one day because I was on a, mountain biking trip. So I ended up only getting to watch one day. And then I think Mark and I talked on that following Monday, and I think I joined on Tuesday.
00:17:05:04 – 00:17:05:14
Joseph Sargo
That was it.
00:17:05:19 – 00:17:16:06
Rod Khleif
That was it. Okay. Okay. Love it. Yeah. And and, yeah. I assume you didn’t make the Phoenix Warrior event. I don’t think I saw you there.
00:17:16:08 – 00:17:26:16
Joseph Sargo
No, I couldn’t make that event. My niece got married on Sunday. Had that event been on the East Coast, I would have actually been flown out for a day and come back. But it was to fly West.
00:17:26:16 – 00:17:28:22
Rod Khleif
Coast to be in Sarasota. Next one will be in.
00:17:29:02 – 00:17:31:10
Joseph Sargo
Yeah. That’s easy. Yeah, yeah. Well, you.
00:17:31:10 – 00:17:42:14
Mark Nagy
Mentioned Joe beforehand that you had tried to actually do this on your own a little bit to, to give the listeners some, some context to tell that, to tell that story real quick about what kind of motivated you to get some help.
00:17:42:16 – 00:18:02:00
Joseph Sargo
Yeah. So I was, you know, again, my, my experience with single family multifamily, smaller projects and, you know, that kind of stuff. My building and I’ve owned some condos in Florida and that stuff is easy. It was easy. I could do that, you know. No problem. I so I was like, fine, I’ll go and I’ll start looking for, you know, multifamily.
00:18:02:00 – 00:18:21:10
Joseph Sargo
Right. So the first the first building I found I started working on did all the underwriting, which I didn’t. Honestly, I didn’t even know what that meant. For years and years I had been doing it. And I’m like, I don’t even know what it means, you know? So we did. Yeah, right. So I’m I’m doing this on this building and I’m going through it and the building seems like a fantastic deal.
00:18:21:10 – 00:18:41:22
Joseph Sargo
You know, and go to the bank and the bank asks me like and comes back with, like, it’s a rural area and I’m like, I don’t even know what that means. You know, they won’t lend on it. So I had to backtrack a little bit and say, okay, let me let me learn a little bit more, because there there seems to be some things that I don’t know in this process.
00:18:41:24 – 00:18:48:18
Joseph Sargo
And before I go and spend two and a half, $3 million, maybe I should learn something.
00:18:48:20 – 00:19:13:11
Rod Khleif
You know, I can’t tell you how often I have somebody hit me up. And, I mean, it happens probably on at least a monthly, if not on sometimes a weekly basis. Hey, I’ve got this 100 unit deal under contract, you know, can you help me? I’m like, okay, I’m kidding me. You you know, you didn’t want to spend a couple bucks to get some help, and now you’re asking for help after you’ve pulled the trigger.
00:19:13:11 – 00:19:37:07
Rod Khleif
I mean, come on. Yeah, yeah. No, I mean, but, anyway, by the way, guys, if you are have any interest in applying to our warrior coaching program, it’s extraordinary. Text the word crush to 72345. You know, I was just being interviewed on another podcast, and I made this comment. I really believe our results in the warrior program eclipse all the rest of the people combined.
00:19:37:07 – 00:19:51:18
Rod Khleif
And we’re a fraction of the cost. And if you’re interested, text the word crush to 72345. We’d love to help you crush it in this business. So. So what’s next for you, brother? I mean, obviously you got to get this thing filled up. Are you going to do another one? What are you thinking? You know.
00:19:51:18 – 00:20:12:14
Joseph Sargo
We are, when we were down there, two weeks ago in, in, October, we looked at a quite a few other pieces of property to do this. And so we are we’re probably going to move forward with at least one of them. We just would love to get at least, you know, these three tenants in the building and then, you know, move on to the next.
00:20:12:14 – 00:20:25:15
Joseph Sargo
But I think I think for the next project, we’re looking in a little different city somewhere a little closer to one of these bigger subsidies. And we are going to probably do, more of a build to suit and, sell the sell the units.
00:20:25:17 – 00:20:45:08
Rod Khleif
Oh, okay. And that’s, that can be very different creative as well. So you actually, you know, people I will tell you, a lot of small business owners like you want to actually own what they have. And you have you have a small you have a small fee for the taxes and the and the, you know, the, the outside maintenance, things like that.
00:20:45:08 – 00:20:53:05
Rod Khleif
But it’s insignificant and and you own your own. I mean, I, I’ve seen that happen many times. We actually sell them off. That’s a great idea, brother. I love it.
00:20:53:07 – 00:21:11:23
Joseph Sargo
So that area’s popular with that micro, what they call them micro flex. You know, that 1 to 4000 square foot property where, like my market here, where I am down the street from me, they’re building 102 of them, 120,000 square foot buildings. Wow, wow. Two different, you know. So thank you for that. I.
00:21:12:00 – 00:21:19:03
Rod Khleif
Are you thinking about any other asset classes or, you know, focus is power. Value staying focused. What what what are your thoughts on that?
00:21:19:05 – 00:21:37:18
Joseph Sargo
We’re staying focused on the flex space. And if I’m, you know, going to be honest, which I always will be, I’m a little intrigued by where everybody’s going with this senior care. And there’s a huge market for where we’re doing all this flex as well. It’s it’s a shortfall. So.
00:21:37:19 – 00:21:56:04
Rod Khleif
Money buddy, that’s that’s that’s, that’s really big right now. And I’m, I’m, I just we just bought I bought my first living facility, two months ago. Very excited about that. Very excited. And we’ve had, you know, lots of warriors are doing it already. Lots of more to own own facilities. And, you know, and there’s a lot to it.
00:21:56:04 – 00:22:16:20
Rod Khleif
So. Yeah, I encourage you to consider that because, I mean, there’s a huge shortage of housing. I mean, the beds for, for seniors, and and it costs upwards of 250 to 300,000 a bed to build them. And you can, you know, you can still buy them for sub 100 a bed. So, you know, right. There’s an opera, there’s an opportunity.
00:22:16:20 – 00:22:25:13
Rod Khleif
I don’t know how long it’ll last, but Covid destroyed a lot of facilities. So yeah. That’s good. I’m glad you’re considering that. Yeah. So. Yeah. Cool, cool. I was going.
00:22:25:13 – 00:22:32:10
Mark Nagy
To say, with your background in your job, you should consider big syndication. Could go, you know, raise some money from Denzel Washington or something.
00:22:32:12 – 00:22:53:01
Joseph Sargo
You know, so many years, I, I so I’m also a local, local 52 prop. I spent many years on sets with movie stars. Honestly, I just did my job, you know, like, I was never, you know, it’s very it’s. I’ve been around it since I’m a kid. I’ve been sitting on the curb of movies since, you know, not old.
00:22:53:04 – 00:22:53:11
Joseph Sargo
Yeah.
00:22:53:11 – 00:22:56:00
Rod Khleif
So how cool is that? That’s. Yeah. You know, a lot of people.
00:22:56:00 – 00:22:57:09
Joseph Sargo
For me, it’s a job, you know?
00:22:57:09 – 00:23:04:14
Rod Khleif
That’s that. Yeah, I gotcha. Okay. Yeah. Well, I mean, have you ever thought about raising money for deals or you just like doing it yourself?
00:23:04:16 – 00:23:11:22
Joseph Sargo
We have we have talked about raising money for deals. I probably, would probably lean on somebody that’s better at it than me than.
00:23:11:22 – 00:23:14:11
Rod Khleif
Well, I we’ve got, you know, dozens and yeah.
00:23:14:11 – 00:23:15:14
Joseph Sargo
There’s tons of people teams.
00:23:15:15 – 00:23:16:20
Rod Khleif
In the warrior program for that.
00:23:16:22 – 00:23:36:09
Joseph Sargo
There really is I, I, I was amazed at early in my journey how many warriors like quickly were already into deals together, you know, doing stuff and, and big, big things. It was it was pretty impressive the action you know, that that was taken.
00:23:36:11 – 00:23:51:02
Rod Khleif
Yeah. It’s mindset I mean they actually take action because you know because we we spend a lot of time, you know, on what’s most important. And that’s actually doing it instead of, you know, getting caught up in our stories and why we shouldn’t do it, and fears and limiting beliefs and all these things that hold people back.
00:23:51:02 – 00:24:14:08
Joseph Sargo
So well now with all of the resources, right? And all of the things that you can get, you know, analysis paralysis is even greater, right? Because right now you have so much more before, you know, you had to really, really search out some of this data, right? Yeah. And now it’s it’s literally, you know, at a type of a chat bot, right?
00:24:14:10 – 00:24:14:17
Rod Khleif
Yeah.
00:24:14:22 – 00:24:27:07
Joseph Sargo
You can find out pretty much anything and you know, and do it in a fraction of the time. And that becomes overwhelming. And some people can act on it and others, you know, delay.
00:24:27:09 – 00:24:35:08
Rod Khleif
Yeah. No, it’s it is it’s we’re in crazy times right now. Yeah. You know, we’ll get a.
00:24:35:10 – 00:24:55:05
Mark Nagy
Speaking of action, Joe, leave the listeners with one more golden nugget. What are, from your perspective, what are some actionable items, whether they work with us or not, that doesn’t matter. Even if they don’t, what are some actionable items that you kind of do on a weekly, monthly basis that you think listeners can just start doing, whether it’s calling brokers, deal analysis, whatever?
00:24:55:05 – 00:25:01:10
Mark Nagy
What are some of those things that you would recommend they do in terms of taking action?
00:25:01:12 – 00:25:20:07
Joseph Sargo
I mean, just just doing it right. Like just start looking for those properties, right. Find some properties that you like, get your deal box together. You know, what do you want? Right. Sometimes you may go into it thinking you want one thing like me and end up in a journey building something that was totally not on your radar.
00:25:20:13 – 00:25:46:18
Joseph Sargo
So, you know, really just starting, right? Picking up the pen, getting on the computer, you know, start looking for that project and calling those brokers. You know, we were fortunate because we have an awesome broker. So I, I leaned on him and and not that I didn’t necessarily make as many calls, but I spent hours and hours and hours on a computer researching properties and deals and, you know.
00:25:46:20 – 00:25:50:23
Rod Khleif
Nice, nice, great advice. Yeah, I know it is.
00:25:51:00 – 00:26:06:23
Mark Nagy
For people that want to reach you, Joe. Maybe they like your story. They want to get into industrial flex, new construction, maybe people that live in new Jersey, whatever they want to invest out of state, which are people that live in New York with the whole freeze the rent thing. I wouldn’t blame you for wanting to invest out of that state at this point.
00:26:07:00 – 00:26:11:00
Mark Nagy
How can they reach you and where can they reach you?
00:26:11:02 – 00:26:18:15
Joseph Sargo
You can email me at Legacy Partner Holdings at gmail, and that’s probably the easiest way to do it. Yeah.
00:26:18:21 – 00:26:37:20
Rod Khleif
Perfect. Perfect. Well, listen, brother, I appreciate you coming on for a few minutes. It’s great to see you and, I’m sure we’ll see you in Sarasota for the next warrior event. And, Yes, sir, I appreciate you adding some value and, interested to see, you know what? What you’re up to, you know, here in the next year or so, I’m sure it’ll be.
00:26:37:20 – 00:26:39:18
Rod Khleif
It’ll be amazing. So you.
00:26:39:18 – 00:26:55:00
Joseph Sargo
Got it. I appreciate you. I appreciate you for having me here. I’m very thankful for the program. And to the other warriors for being available. You know, at the drop of a hat. I can call some of these guys, and I’ve done the same for others, so it’s. It’s nice. It’s been nice. Thank you.
00:26:55:02 – 00:26:57:03
Rod Khleif
Thanks, brother. See you guys. Thanks.
