Carlos Rovira
Carlos Rovira has been a guest on Collecting Keys, the real estate investing podcast hosted by Mike DeHaan, Dan Austin and Dylan Koch.
Buying Commercial Offices (During Covid) for Huge Returns with Carlos Rovira
Carlos Rovira explains how he went from house-hacking a Miami duplex while working as an engineer to owning single-family rentals in Kansas City, and then buying distressed office buildings during COVID when nobody else wanted them. He walks through the thesis behind chopping large office suites into sub-1,000 square foot spaces for small business owners, the numbers on a 24,000 square foot building he bought for $350,000, and what it takes to self-manage a portfolio from 1,500+ miles away.
Key takeaways
- Carlos's office thesis: companies would return to work but want less space, so he bought buildings with small suites and cut large 4,500 sq ft spaces into 500 sq ft offices rented at roughly $500/month (~$12/sq ft), a segment few landlords serve.
- On the Chrysler Building in Kansas City he paid $350,000 for 24,000 sq ft (about $12/ft), put in another $350,000, and at roughly $275,000 revenue against $130,000 of full-service expenses is targeting around a 16% cap — but bank seasoning requirements mean he can't refinance until occupancy has held for six to twelve months.
- Small tenants create built-in diversification: many 500 sq ft users are easier to lease (often within a month) and less risky than one large tenant who can leave a huge vacancy behind.
- Miami became hard to cash flow in because foreign capital fleeing unstable economies, visa investment programs, and relocating New Yorkers buy for wealth preservation, not returns — which is why Carlos went virtual in Kansas City in 2016.