Episode
371. Underwriting an Auto Garage Conversion | Office Hours
- Published
- Apr 9, 2026
- Duration seconds
- 1617
- Processing state
not_requested- Canonical source
- https://www.tylercauble.com/podcast/episode371
Actions
POST https://stenobird.com/v1/public/podcasts/the-commercial-real-estate-investor-podcast-1247143/episodes/371-underwriting-an-auto-garage-conversion-office-hours/transcription-requests
Idempotently request low-priority transcript generation for this episode.GET https://stenobird.com/podcast/the-commercial-real-estate-investor-podcast-1247143/371-underwriting-an-auto-garage-conversion-office-hours.md
Read the agent-friendly Markdown representation of this episode resource.
Summary
Key Takeaways: Main Deal Conclusion The auto garage near downtown Nashville is overpriced at $2.6M (~$480/sf) . Even after lowering price and rehab assumptions, the numbers don’t work at realistic market rents . Tyler’s verdict: pass on the deal unless the price comes way down or there’s major zoning upside. Why the Numbers Fail Concept: convert 6 bays (~900 sf each) into micro retail . Realistic rent assumption: ~$30/sf NNN . At those rents, NOI is far below debt service , creating large negative cash flow and DSCR below lender minimums . Only at extremely high, unrealistic rents ($50–$80/sf NNN) does it begin to pencil, which the market likely won’t support. Value & Pricing Insight For this kind of building and location, Tyler thinks $200–$250/sf (~ $1.0–1.35M ) is more reasonable than $480/sf. LP/GP Structure Tips Charge reasonable fees (e.g., 1% acquisition , ~2% asset management ) to cover costs. Simple structure he likes: 7–8% preferred return to LPs Then a 70/30 or 80/20 LP/GP split , no complex waterfalls. Salt Ranch Hotel Update Tyler’s Salt Ranch Hotel in Nashville has soft-opened (April 1) . They’re adding a limited swim-club membership as an unmodeled but attractive new revenue stream. Liquor license process was slow; they opened with beer first, full liquor coming online now.