Good Investment Decisions + Good Financial Freedom

John Harcar (00:01.139)
Hey guys, welcome back to the show. I’m your host here, John Harcar. And I’m here today with Irwin Boris. And what we’re going to talk about is making good sound investment decisions for a good financial future. know, remember guys, at Investor Fuel, we help real estate investors, service providers, and really all real estate entrepreneurs, 2 to 5X your business. And we do that by providing tools and resources to build the business you want to build and live the life that you want to live. Irwin, welcome to our show.

Irwin Boris (00:30.542)
Thank you so much for having me today. Thank you.

John Harcar (00:32.177)
Yeah, appreciate you spending some time. I know we talked a little bit about, you know, before about, you know, your process and how you help people make those good financial decisions. Before we kind of get into all that and get into the weeds about, you know, some of those things we talked about, tell our folks in our audience about you, you know, how you got into real estate, you know, where, know, what you’re doing now, basically how you got here.

Irwin Boris (00:54.04)
Sure. I have a background in accounting. It’s my undergraduate degree. I’ve taken the CPA exam. I’ve worked in public accounting. And from the very beginning, a lot of my client assignments were real estate based. So I got to see a lot of numbers. back then, they’re just numbers. And when I decided that it was kind of boring, four and a half years into that, I went to work for a very large

John Harcar (01:13.486)
No.

Yeah.

Irwin Boris (01:23.79)
owner, operator, who’s on the Forbes list. And they taught me the management side, the day-to-day property management side of the multifamily world, where I had to do everything from make sure that the repairs were done when the tenants put the tickets in, to manage the crew and ordering the right supplies, to actually going to landlord-tenant court and seeing the games some tenants played when you tried to collect rent and all the stories. Yeah, the crash course.

John Harcar (01:28.531)
Hmm.

John Harcar (01:43.356)
Okay.

John Harcar (01:50.067)
So you got the crash course. Nice.

Irwin Boris (01:52.783)
And so you actually got an appreciation for what some of those numbers meant on financial statements and how hard it was to actually, whether it was raising income, why sometimes the trends were up and down with repairs and things like that. And throughout my career, I’ve either worked for owner operators, either started as asset as a controller to an asset manager.

John Harcar (02:07.975)
right?

Irwin Boris (02:19.054)
to helping do acquisitions and capitalizations. And then I’ve spent on and off in between those positions as a banker, working for a savings bank, doing portfolio loans to working for GMAC commercial mortgage, which is now known as Brickadia through the evolution as a mortgage banker, raising debt and equity and originating loans for CMBS as well as life insurance companies. To where I am today, where I’ve been in all the food groups and as…

John Harcar (02:31.965)
Hmm. Yep.

Irwin Boris (02:49.28)
the interest rates started to move and the pricing got crazy on apartments where you could not get positive leveraged. We focused more on property types where we could get the positive leverage, namely multi-tenant industrial and shallow bay flex, where we’ve always had an interest in, we’ve always owned those assets. And we just, you know, we shaped our portfolio knowing that we could always get positive leverage and we could always generate cashflow.

John Harcar (03:07.453)
Mm-hmm.

John Harcar (03:16.339)
Got it. Why commercial? Like why back in the day? Why? And, you know, I know that you weren’t, you wouldn’t work for somebody, but why commercial and not residential or anything like that?

Irwin Boris (03:27.192)
Well, it’s sort of why we’re in industrial flex now, because if you are, you know, in residential, yeah, I have a broker’s license. I haven’t done many transactions as a broker, but when people are working as a broker in residential, they’re more or less selling homes or else they’re buying homes to flip them. And that’s ordinary income. It’s not capital gains. So it’s taxed very differently. Also, if you were buying homes and trying to rent out single family homes, you as the

John Harcar (03:44.871)
No.

John Harcar (03:51.601)
Right.

Irwin Boris (03:56.751)
property owner were exposed to a lot of expenses. Taxes go up, the tenants might pay the utilities and the water, but you never know the insurance cost is gonna be, what kind of damage is gonna be when they move out, whether you have a security deposit or not, if they’re gonna set the place on fire, even accidentally. And even as we transitioned from multifamily fully into industrial and shallow bay flex,

John Harcar (04:09.735)
Yeah.

Irwin Boris (04:22.318)
We really enjoyed it because I had no exposure to fluctuations in operating expenses. Most of those leases, if not all of them, were either modified gross where the tenants pay 100 % of the pro rata increase or triple net where they just pay 100 % pro rata of the operating costs of the property. And the last few years, I guess the last four years or so while apartment owners were taking it on the chin while insurance costs sometimes tripled or quadrupled,

John Harcar (04:27.827)
Mm-hmm.

John Harcar (04:35.155)
What’s your planet?

Irwin Boris (04:51.662)
In addition to the payroll costs and coming out of COVID, every municipality wanted to raise taxes to get some of their money back. You know, we were sort of nice and boring. We didn’t worry about it. you know, insurance went up on our properties, but not as much percentage wise as they did on multifamily because you figure if you have, you know, 200,000 feet and you have eight tenants, you got eight toilets, you don’t have 85 toilets and showers and things that cause leaks.

John Harcar (05:17.981)
True, that’s very true. Yeah.

Irwin Boris (05:21.55)
And the reason we like this, shallow bay flex is even better is because typically like the deal we’re working on now is I have 12 buildings, it’s 275,000 feet. So if I have to replace a roof, it’s a small roof. It’s not a roof that covers a 400,000 square foot building, which is going to set you back. So it’s way to control your expenses and your capital and things like that.

John Harcar (05:34.163)
Mm-hmm.

Yeah, right, right. So it just seems…

John Harcar (05:46.481)
Yeah, it seems like it’s something I’ve heard, like I mentioned before, last couple days I’ve talked to a couple of gentlemen in the flex space, less maintenance, less than what maybe residential is.

Irwin Boris (05:58.947)
No, it’s definitely a lot less maintenance. It’s a boring investment. They stay full, everybody paid during COVID. And they’re in everybody’s neighborhood. There could be anything from a body shop to the plumber has a small space, the electrician, the sheetrock guy, a carpenter. They all need these five to 10,000 square foot spaces in the small bay. And the large buildings, we have everything from

John Harcar (06:15.965)
Mm-hmm.

Irwin Boris (06:26.798)
assembly to manufacturing to distribute it you know distributors of all sorts of equipment.

John Harcar (06:29.606)
Okay.

John Harcar (06:35.737)
Now what are some of the challenges of this type of investing versus traditional residential or multifamily?

Irwin Boris (06:44.342)
I think part of the challenge is finding the right building in the right location where it’s in residential or multifamily, you’re always looking at comparables. What are rent comparables? What are sales comparables? And we buy these buildings in a lot of secondary locations on purpose because there’s always tenants that need to be there.

John Harcar (06:57.587)
Mm-hmm.

Irwin Boris (07:08.174)
So it’s determining why is the tenant there? Are they tied to the labor force? Are they tied to the suppliers? Are they tied to the customers? Or is it a combination of there? Sometimes they’re taught, go ahead.

John Harcar (07:16.551)
Now what do you mean by secondary locations? I apologize for interrupting, but what do you mean by secondary locations? Okay. Okay.

Irwin Boris (07:21.078)
Like I’m not buying downtown Atlanta or downtown Miami. I might be in a secondary location in Georgia that might be 20 miles outside the perimeter loop of Atlanta. No, no, tertiary is like the sticks, but a secondary market, could be, yeah, out of banks of major cities, as we call them secondary markets that are still along major thoroughfares.

John Harcar (07:35.303)
So tertiary markets.

John Harcar (07:40.352)
yeah, okay. You’re just talking about the outer banks of the main market. Okay. Got it.

Irwin Boris (07:50.637)
know, highways, rail, access to airports and things like that. Because typically those buildings cost less. You can buy them at a discount to replacement cost and you can keep them full. And the tenants are to be there aren’t tenants that want to pay the prime rents anyway. They just want a place they could install their equipment, have their people come to work and make money.

John Harcar (07:51.985)
Right, got it.

John Harcar (08:14.001)
Yeah. You mentioned finding the right building or finding the right location. mean, how do you find your buildings? mean, how do you specifically go out there and find your deals?

Irwin Boris (08:25.56)
Some come through brokers. have a call, you know, they know who we are. They know what I like to buy. They know I’m not interested in the full marketing process. We even go through several rounds of offers. It’s like, call me when it doesn’t close. Call me, it’s like, you know, call me after the hail storm when the car dealer wants to get rid of the cars at a discount type of thing. Yeah, so, you know, I’m not always the high bidder, but I’m the guy that’s going to close.

John Harcar (08:45.305)
Yeah, right. Get get it rid of for cheap. Yeah, right.

Irwin Boris (08:52.718)
So, you some come through people we’ve already transacted with. Sometimes, you know, we track deals that we like in some of these locations and the one I’m working on now, we made an offer on two years ago, the seller wasn’t ready to meet the market. So it came back to us before it went out to the rest of the world. What do want to do? I, you know, we agreed on a number. He’s retiring. And so we’ll hopefully get that closed in the next 60 days.

John Harcar (09:05.458)
Hmm.

John Harcar (09:21.745)
awesome.

Irwin Boris (09:22.606)
Yeah, sometimes you drive by a building, you show this is an interesting location. Let’s see who owns it. So we do a lot of research. read a lot of industry publications on what’s happening in certain markets, where job growth is. You could also pull out an infrastructure map of the United States and see where the big infrastructure money is going. And those are typically spaces where you’re to see a nice pop in your rents and your demand.

John Harcar (09:35.965)
Mm-hmm.

John Harcar (09:51.1)
Right.

Irwin Boris (09:51.299)
Because especially if you’re buying it at $70 a foot and it costs $200 a square foot to build, you know you’re to be full and you’re going be able to move the rest.

John Harcar (09:59.165)
Yeah, got it. What other challenges are there in this industry or this part of the industry?

Irwin Boris (10:04.398)
Well, I guess to find a building of a certain size, like I’m not buying a 5,000 square foot building. I’m looking for a larger asset with multiple tenants. We’ve done very few single tenants because if that tenant gives you notice, they’re moving out. All of a sudden you got 250 or 500,000 square foot and you got a scramble. What do you do with it? You won’t have any income coming in for a while. Where I like the shallow bay flex where, as I said, the one I’m working on, I have 275,000 feet.

John Harcar (10:24.947)
I

Irwin Boris (10:33.774)
12 buildings with 40 tenants. And that is what we call the multifamily of the industrial world. know, one guy moves in, one guy moves out. You always have to pay the mortgage. Nobody loses sleep.

John Harcar (10:47.324)
Right.

What are some mistakes you see people doing when they’re getting into this?

Irwin Boris (10:56.686)
Well, I see mistakes in commercial real estate investing in general by people that invest, especially people that aren’t active, people looking for passive income, your limited partners or your accredited investors. Some of them chase projected pro forma returns. And sometimes it happens, most of the time it doesn’t. I only remember one deal in my entire life that actually hit the number on the pro forma.

John Harcar (11:15.283)
Hmm.

Irwin Boris (11:26.006)
Most of them are a little short. Sometimes they’re a little bit over. if, know, because there’s so many variables over a three or five or seven year period and you really can’t foresee more than two years out if that much. And there’s just so many variables. Like now, if you’re in a value add multifamily project and with tariffs coming in and you need steel or lumber to do renovations and all of a sudden that

John Harcar (11:26.916)
huh.

John Harcar (11:37.107)
the eye.

John Harcar (11:42.727)
Mm-hmm.

John Harcar (11:50.098)
Yeah.

Irwin Boris (11:53.679)
appliances which are made overseas have 25 % tariffs. can’t get stoves or dishwashers or refrigerators. You’re screwed. You know, can have delays and increase in project costs and it’s a problem. And I find that the renovations that we need for a commercial tenant coming in, it’s a lot less than it costs to renovate an apartment, you know, to make it a class A.

John Harcar (12:01.341)
Yeah. Yep.

John Harcar (12:20.101)
yeah, yeah, yeah, for sure.

Irwin Boris (12:20.814)
Where those are probably 25 or 30,000 for a one bedroom apartment now, but at the you get done with the floor and the granite and everything else. And I might spend, yeah, yeah. And I might spend 25 or $30,000 on a 3000 square foot, you know, for carpet and some window treatments and, you know, a new bathroom and, you know, things like that. So I think I’d get a better return on my investment that way.

John Harcar (12:27.419)
new appliances and all that, yeah.

John Harcar (12:42.717)
I’m sure 100%. What advice would you give to someone trying to get into this or what resources do you think are the best way to kind of find out, how do I start doing this?

Irwin Boris (12:53.23)
I think that if you, unless you’re prepared to really like roll the dice yourself and try to do it, I would say find someone that has been doing it and invest with them and learn and watch and take notes. Because it’s one thing to buy a small building in your neighborhood that might run you 500 or $800,000 and have three tenants in it.

And then you, but then still that you got all the headaches, you got to make sure the leasing is done. You got to make sure the bills get paid. You got to make sure they pay you. whereas if you’re investing with somebody else who’s got a larger operations and the entire office staff out of that’s done for you. so, you know, that’s how I got into this business by investing with others, until I found someplace where I can invest with my partners as a principal.

John Harcar (13:20.624)
Mm-hmm.

John Harcar (13:32.401)
Great.

John Harcar (13:37.907)
Okay.

Irwin Boris (13:45.063)
And you know, the way we look at it is our investors are our family. We see a lot of them socially. We were available for calls on nights and weekends. I have a lot of investors, some of them that are doctors or dentists, and I know they call me after office hours, so it’s on a weekend or it’s eight o’clock at night. And we think of it as building a business together. All our interests are aligned and…

John Harcar (13:59.44)
I know.

John Harcar (14:07.547)
Sure.

Irwin Boris (14:11.522)
The only ever comment I get is why does take the accountant so long to generate a K1? That’s the only thing I hear at the end of the year.

John Harcar (14:16.563)
How do people find those mentors or where’s the best place to go find someone that could guide them?

Irwin Boris (14:22.894)
Well, guess you could look on social media has got a lot of stuff on there. Sometimes it could be a little deceiving, but I would say if you went to LinkedIn and see what’s there and look what people talk about, you’ll be able to tell who knows what they’re talking about by reading what they post and maybe what they comment on other people’s posts. You know, and based on that, you could probably eventually go to a website and see what’s there, see what kind of educational materials there.

John Harcar (14:40.851)
Hmm.

John Harcar (14:52.755)
Yep.

Irwin Boris (14:52.846)
And like in my bio, I have a calendar link. You want to have a conversation and just talk? I’m happy to talk to you. At this point in my life, it’s all about giving back, whether it’s people who want to invest in commercial real estate or even, you know, on the high school level, I’m licensed as a teacher. I teach financial literacy to high schoolers because I don’t think it started. No, they, well, unfortunately by high school, it’s too late. If you think of the ultra, ultra wealthy people.

John Harcar (14:59.101)
Cool.

John Harcar (15:11.405)
Mmm. God bless you, they need it. That’s true.

Irwin Boris (15:20.748)
those kids start learning about money in elementary school from the time they’re born. And that’s why they have good business heads in them and they can make decisions. And they’ll probably out negotiate you for your baseball cards on the school line. where I…

John Harcar (15:26.087)
Mm-hmm. Yep.

John Harcar (15:35.367)
Yeah. Or my daughter will out negotiate me for the chicken nuggets.

Irwin Boris (15:40.749)
Yeah. So I think financial literacy, you know, is people learn about it too late and it’s all about having enough money to be comfortable. And I think you really got to start young. Not to say it’s never too late to start, but you have to admit that there’s a problem and you want to find help and find someone that’s going to help you.

John Harcar (16:00.037)
Yeah. Yeah, I think it was what my father told me back in the day. Like, 10 bucks away a month for like 20 years and you have a million bucks. I don’t know, something like… And I’m like, eh, get out here.

Irwin Boris (16:10.146)
Yeah, yeah, he probably talked to you about the rule of 72 where money, you take the interest rate and divide it by the number of years, tells you how long it takes money to double.

John Harcar (16:19.277)
Yeah, something. And I’m like, you’re crazy. I wish I would have done that. It would have been so simple. It is.

Irwin Boris (16:24.748)
Yeah, it’s the power of compounding. And that’s how we look at an investment. The real way to explain how I like to invest is if I said to you, your body weight, compound at 3 % a year for the next seven or 10 years, you’d say to me, I don’t want to do that. So if I’m paying you 8 % a year, because the rents are generating eight or nine current, then we distribute that. And the rents are growing at 3 % a year, so it’s compounding.

John Harcar (16:37.299)
Bye.

John Harcar (16:40.797)
Mm-hmm.

Irwin Boris (16:53.356)
and the property is appreciating at four or 5 % of the year. Next thing you know, in 10 years, you’ve doubled your money, plus you’ve gotten half of it back in cash flow all along. So it’s not a difficult formula to follow. You just have to open your eyes and say, you know what? I understand it. It’s slow. It’s boring. There’s no way to get wealthy quick. But over time, I’m going to create a lot of wealth.

John Harcar (16:57.029)
All right.

John Harcar (17:18.429)
Well, and that takes us to our topic, right? Let’s talk about making good decisions for a good financial future. I mean, you and I talked about, before about our alternative vehicles like real estate or, you know, and getting to that financial freedom. So tell me, tell us how you like to help folks do that or what suggestions or things you can, you can kind of convey to us.

Irwin Boris (17:40.366)
Sure. I spend a lot of time talking to investors who some of which have a problem, whether it’s a deal going sideways that they’re already in. Do you throw good money after bad? Do you answer the capital call? Will I ever get my money out? I like to try to identify what their problem is and see who the villain is and try to figure out if there’s a way to overcome that.

John Harcar (18:03.315)
Mm-hmm.

Irwin Boris (18:06.786)
You know, and if it’s something that maybe they don’t have a lot of problems or they don’t have any legacy issues, but they’re trying to figure out how do I save for retirement or for my future? How do I build a cashflow stream? I’m going to try to explain to them the way I do it for myself and guide them through how I’ve done it for myself and try to help put together a clear, actionable plan, sort of a step-by-step guide.

John Harcar (18:27.24)
Right.

John Harcar (18:35.763)
Mm.

Irwin Boris (18:36.526)
You know, and that’s why for me and my partners now, my investors, it’s all about the cash flow, because when you close on the investment, that’s really the only thing that’s predictable is what is your cash on cash return from day one. And if you have leases that increase three or 4 % the year, you know, over time, you’re going to get more money and you’re going to create more value. So it’s about, you know, trying to explain this to them.

John Harcar (18:51.475)
Right.

John Harcar (19:00.403)
Mm-hmm.

Irwin Boris (19:05.548)
And they could do this within a retirement account. Like I’m tired of opening up those IRA or 401k statements, especially with the stock market the last two weeks. I’m watching it go like this. So I know it’s been a lot of disheartening for people who thought at the end of last year and earlier this year, look at the balances. Look at the balances. Yeah, but look at the math. We’ve gone backwards a year already. Where in a retirement account, if you’re investing in commercial real estate, you’re getting the cashflow, you’re getting the appreciation.

John Harcar (19:15.045)
Yeah, exactly.

John Harcar (19:25.651)
Mm-hmm. Mm-hmm.

Irwin Boris (19:34.959)
You’re not seeing that rollercoaster ride. And that’s not good for your heart, especially if you’re an older person. So, you know, I try to help them, you know, encourage them to take the necessary steps to, you know, secure their financial future. They don’t, you know, it doesn’t have to be with me. It could be somebody else they want to do it with. If they like industrial, we’re more happy to talk to them. But just explaining to them how I look at investing.

John Harcar (19:41.54)
Yeah.

Irwin Boris (20:02.202)
and to see if there’s an alignment of interest. I personally invest in it for the cash flow. Of course, I know over time, the more deals I invest in, the more monthly or quarterly income I have coming in, the more value I’m creating, and for the long term, the more wealth I’ll have. So it’s not get rich quick. The old adage, the tortoise beats the hare. What’s better, the rabbit or the turtle? I think being the turtle, slow and steady.

John Harcar (20:05.659)
No.

Yep.

John Harcar (20:20.327)
Tomorrow, yeah, exactly.

Irwin Boris (20:32.411)
It helps you sleep at night.

John Harcar (20:34.131)
It helps you win the race, so they say. What trends are you seeing? Are you seeing any specific trends in the commercial space, like a growth in one area versus another? Just any overall trends you see in the business.

Irwin Boris (20:48.654)
I’m seeing, know, multifamily rents did pick up. saw that one of the news articles last month. But I also noticed that retail in some locations is coming back. Lenders are now lending on office space again, because there’s all this big back to the office movement. yeah, but but office still worries me because in order to keep your key employees, you’re sort of hybrid. It’s two, it’s three days a week in the office. So when those leases renew, do they take less space? So

John Harcar (20:53.202)
Yeah.

John Harcar (21:04.541)
It used to be a dirty word, office.

John Harcar (21:17.351)
Yeah.

Irwin Boris (21:18.196)
I don’t know if I want to go into office at maybe medical office buildings that are next to a hospital campus I would do, but not traditional office office. Multifamily, when you think about going in, capitalization rates and interest rates are about the same, so I don’t think you can get positive leverage. It also depends on your investment horizon. I think there’s a lot of opportunities in small industrial deals, and if you want to put a whole bunch together in your backyard.

John Harcar (21:24.977)
Yeah.

Irwin Boris (21:47.865)
these small flex deals, could probably do it and run them yourself over time. But it’s also about diversity. We see a lot of opportunity in the Midwest. We look at the infrastructure overlay on where the infrastructure projects are, where we see corporate growth, like under the CHIPS Act, if it doesn’t get repealed, we know the big chip factory going in, Syracuse, New York market. So we have some property up there that we’re trying to get rezoned and build on.

John Harcar (21:48.108)
huh.

John Harcar (22:08.307)
huh.

Irwin Boris (22:15.34)
You’re also going to track job growth and this is stuff you can read about. Where is the population moving to? That’s going to tell you where there’s probably more of a demand for apartments. There might be more of a demand for shallow bay flex, for vendors that need to service the homeowners or the apartment tenants. You know, there’s always something to find to make money. know, I know people have made a lot of money with these Airbnb’s, know, but I keep reading the nightmare stories that you can’t get people out sometimes.

John Harcar (22:40.717)
Yeah, Airbnb does take a specific person. Well, Irwin, I appreciate you joining us today and sharing all that information. And if folks want to get a hold of you, maybe they have interest in industrial space or maybe they have any commercial questions they want to ask, what is the best way for people to get in touch?

Irwin Boris (22:45.282)
Yeah, does.

Irwin Boris (23:00.942)
You put my name into the search bar, Google, you’ll find one of several ways to get hold of me, whether it’s LinkedIn, Facebook, Instagram, one of the companies that I’m affiliated with, your corporate website. On LinkedIn, you’ll find my email address and a cell phone number, or you can contact me there. I make it really easy, and sometimes I get people called out of the blue, and I’m thinking, where’d they get my number from? And they’re like, oh yeah, it’s out there.

John Harcar (23:20.307)
Awesome.

John Harcar (23:28.147)
Ha ha ha ha ha

Irwin Boris (23:29.292)
You’d be surprised if you put your own name into the search bar at what might come up on you.

John Harcar (23:34.343)
Yeah, I’ve done that. But once again, I appreciate you guys. Definitely reach out. We’ll put all the information, contact information we have in the show notes. So if anybody wants to click on the links or whatever, they’ll be able to get in touch with you.

Irwin Boris (23:49.922)
No, I appreciate that. I’m glad to help anybody who’s interested.

John Harcar (23:52.891)
Yeah, and I thank you again for being on this podcast. Guys, I hope you enjoyed it as much as I did, and we’ll look forward to seeing you on the next one. Cheers.

Irwin Boris (24:00.579)
Thank you.