- Biz Brainstorms by Connor Gross
- Should You Buy A Car Wash? Making Money on Land, Billionaire Real Estate Investor Advice
Should You Buy A Car Wash? Making Money on Land, Billionaire Real Estate Investor Advice
designed to be skimmed
Welcome to Biz Brainstorms –
My name's Connor. I'll send you a weekly email covering ideas to help start or grow your business.
These emails are designed to be skimmed. Enjoy. 🧠 ☕️
Buying a Car Wash
Monetizing Vacant Land
Billionaire Real Estate Investor Principles
How To Start A New Month
Niche sites earning millions
Did someone forward you this email? If so, you can subscribe below:
Sponsor: Understand the stock market, daily, in less than 5 minutes.
For years on the show 'We Study Billionaires,' The Investor's Podcast Network has made a habit of chatting with the world's best investors, like Ray Dalio, Joel Greenblatt, Howard Marks, and many more.
With 100+ million downloads, they make podcasts by investors, for investors.
Now, they're joining the newsletter space. Click here to sign up (for free) today.
🚗 Should You Buy A Car Wash?
I have 3 simple business principles I follow (in order):
Maximize profit: make more $$$ on the bottom line
Decrease tax liability: making $1M is awesome. Keeping 1/2 sucks.
Compound Capital: Low priority, but if my money can make money, that's great.
So reading this tweet had me thinking:
We just did a cost segregated bonus depreciation study on a storage facility in Fort Worth we bought in September.
It allows us take a $149,000 loss on one of our properties.
But we paid $750,000 for the facility, so it's really only 20% of the property value.
This carwash example is 40%.
From a quick google, both gas stations & car washes would fall in this high % of bonus depreciation because of the amount of machinery/equipment in each.
If you have a high level of free cashflow, I'd look into building a small portfolio of these.**
**Note – Growing up my Dad owned a car wash for 2 years. Things break... a lot. So while the returns are nice, this is not a super passive business.
💸 Monetizing Land
This idea went back & forth in my group chat for the last couple of weeks. It's a covered land play disguised as self storage.
Here's the quick summary:
You buy land in tertiary markets outside of major city markets
You'd need to do very minor development (gate, potential grading, etc.)
You advertise pick up & drop off storage via portable units (charge $100 for pickup, $100 for drop off)
You charge nearly Tier 1 city rates to store the containers 45 minutes out of down town on secondary and tertiary market land
Drop the containers off and stack or organize them however makes most sense
I love the model.
We may spin up a competitor to this in a few months or a year. If you're a great operator and love the idea, reach out 👋
What’s your favorite part of the newsletter
📚 Billionaire Real Estate Investor Principles
Last week I read this piece on Sam Zell.
He sold one of his real estate portfolios to Blackstone for... $39 billion. 🤤
Yep, certified legend.
Well, Zell breaks down 3 principles for making money in real estate (I tried to simplify below):
"In an inflationary environment, borrowers with long term fixed rate win."
Long term Real Estate owners win big time during inflation. Since as the value of a dollar drops, your debt remains fixed. Which essentially means you're depreciating the value of the loan while you still have the ability to raise your rental revenue.
Replacement costs are the most reliable indicator of property values
The dumbed down version of this – the cost required to build a competing building will directly influence how much the competitor will need to charge in rent to recoup their investment. So if you buy a building for $500,000 and you know it costs $1,000,000 to rebuild that same exact building, more investors will buy existing assets instead of risking new development. As a result, your competing supply is limited.
“I have always believed that every day you choose to hold an asset, you are also choosing to buy it”
I underlined this one because it's my favorite. I still own a tiny bit of crypto. This is a reminder to myself that I would not be buying at today's price (or better put, I would not be buying at all). Which means sell.
Zell wrote this when he got the $39B offer from Blackstone. His logic was he would not pay that much for his holdings, so it makes sense to sell.
🏡 How To Start A New Month
I liked this post from Taylor Welch
It's a good audit for beginning any new month: what / who / how.
WHAT does my life look like and does it match what I wanted it to be at this point in time
WHO represents / resembles the best version of what I want my life to look & feel like and am I spending time with them (or even have access to them)
HOW asks “am I enjoying the things / activities I’m doing or not” and then asks how to fix them
It's worth spending 15 minutes to audit your own life here during a journaling session.
🤑 Niche Sites Earning Millions
1,000 logos – 1.1 million monthly visitors and 3 million page views (probably makes $500k/yr)
FreeJobAlert.com – 13.3M visitors per month targeting India Jobs. Assuming a $7 RPM = million dollar biz
Wordcounter.net – 7M visitors/month puts it at $500k/yr at a $6 CPM
See you next week ✌️
PS – This email costs $0. But if you enjoyed it could you fwd it to just 1 person? It's more fun to write this as the audience grows
PPS – I respond to all of these emails so if you're new here say what's up