377. I'm Building 43,000 SF of Flex Space at 1/3rd of The Cost - Office Hours

Core ConceptInstead of buying land + building ground‑up flex, Tyler uses a master lease on an existing 43K SF building.Traditional build: $6–8M ($150/SF).His deal: $2.5M all‑in ($39/SF hard costs) by leasing + converting, not buying.What a Master Lease IsYou lease the whole property from the owner and sublease to tenants.Your profit = rent spread (sublease income – master lease payment).You control the income and operations without owning the dirt.Works across flex/industrial, retail, office, mixed‑use, even hotels.When It Makes SenseOwner won’t sell at your price but needs income.Building needs capex the owner won’t/can’t fund (vacant or tired asset).You want to control more SF with less upfront equity (no big 20–30% down payment).Peerless Mill Example43,350 SF warehouse → ~24 flex units.Master lease: $0 base rent + 10% of revenue to owner.Capex: ~$2.5M total vs. $6–8M if built new.Hold: 20 years, targeted:~13% LP IRR~4x equity multiple~19% annual cash‑on‑cashTax & Risk HighlightsTreated as an operating business, with large bonus depreciation potential (deal‑ and CPA‑dependent).Key risks:You carry operating + lease‑up risk.You don’t own the real estate—exit is business/lease focused.Long‑term commitment, so structure terms (rent, maintenance, termination) carefully.