Learn The Smart Way To Handle Tenant Move-Outs And Preserve Your ROI

Most investors obsess over cap rates and comps while the real money leaks out during tenant move-outs. We go straight to the hinge moments that protect ROI: how to set a rock-solid move-in baseline, run smart mid-lease checkups, and execute pre- and post-move-out walkthroughs that stand up to scrutiny. You’ll hear exactly how we separate normal wear and tear from nonfunctioning systems, why HVAC preventative maintenance isn’t optional, and how to request the invisible proof that matters—PM contracts, service logs, and life-safety inspections.

We unpack the strategy behind security deposit claims and the timelines that can make or break them, including what to document, how to tie charges to lease language, and when to pursue only the big breaches. Restaurants get a special focus with their unique risks: hood cleaning, fire suppression, grease trap pump-outs, and backflow testing. We also call out common electrical red flags that signal DIY work and code exposure, from residential wire off commercial panels to improvised lighting that invites fire hazards.

Beyond repairs, we talk momentum. Early renewal conversations and pre-walkthroughs give you options: pre-market the suite, plan scope, or relocate tenants within your portfolio. When the right tenant wants “as is” for a sharper rate, restoring baseline condition quickly can shorten downtime. When it’s time to reposition, targeted reinvestment in lighting, common areas, and signage lifts leasing velocity and retention. This is the unsexy work that compounds into safer assets, faster turns, and stronger yields.

If this playbook helps you keep one HVAC from “retiring early” or catch one missed grease trap before it becomes a flood, it has paid for itself. Subscribe for more practical CRE operations, share this with a landlord who needs a tighter turnover plan, and leave a quick review to tell us your toughest move-out challenge.

Learn more about Blue Commercial Properties on our website.

Transcript

Show Intro And Focus

Michael Carro 0:00

Welcome to Blue Dirt, the podcast that digs deep into the foundation of commercial real estate investing. Unlike most real estate shows that focus on deal making and market trends, Blue Dirt gets into the nuts and bolts of what truly builds long-term value, the building itself. We break down how to spot deferred maintenance before it costs you, why a solid preventative maintenance program is a game changer, and how triple net leases can maximize your investment returns. We'll also explore the importance of strong landlord-tenant relationships and how they drive stability and growth in your portfolio. Whether you're a seasoned investor or just getting started, Blue Dirt gives you the practical knowledge to make smarter, more profitable decisions in commercial real estate. It's time to get your hands dirty and build value from the ground up. Let's dig in. Welcome to Blue Dirt, the podcast where even idiots can make a killing in commercial real estate. I'm Michael Kiro and I'm joined with Don Ruddhead with Blue Commercial Properties. And today the top is it the topic's going to be about when tenants vacate a space. So that might be podcast one. And then when tenants have to vacate early and we need to terminate the lease, what landlords can do to help offset or mitigate those losses of an early termination. So I think podcast number one, we're going to talk about when a tenant is vacating the space, what the property management company can do, or you as a landlord, if you don't have a property management company, what you should do to ensure that the space is turned over in proper condition, with, you know, typically with normal wear and tear accepted. And also what you should be looking for in the event you need to charge. When we talk about a return on investment on a property, everything goes into that, including your expenses for rehab, repairs, and maintenance, things that you have from a natural cost standpoint, but not everything that has to be done is your expense. And so we well, that's kind of what we want to talk about today. How do you get the space properly turned back over to the landlord and properly prepared to be ready for a new tenant? So, Don, why don't you kind of kick us off since you're our property manager extraordinaire? What do you look for in preparation of before the tenant vacates? Yep. And then the types of walks through walkthroughs maybe pre while the tenant's in place, post after the tenant vacates, and then what claims against a security deposit you might might you look for? Or in our hope is that we are just able to give all the money back to the tenant.

Move-In Docs And Baselines

Don Redhead 2:46

Right. Uh yeah. The funny thing is, is the best thing you could probably do is actually on the delivery of the space.

Michael Carro 2:57

Okay, so we're gonna go back to before the tenant takes over.

Don Redhead 3:00

Correct. So when you do that uh move in kind of delivery of the space, having good photos, having a good you know, checklist done, documenting everything in the space, and having the tenant when they actually sign the lease, they understand, you know, this is my responsibility, right? This is the landlord responsibility. I'm accepting the space with X, Y, and Z. Having that completed on the front end is always very helpful. And and unfortunately, sometimes that can be years, right? That was five years ago in some places. So it's it's it's always one of those things that we're getting better and better at, but it it's you know, sometimes it takes years to yield fruit. And then there's some that you just take over properties that you weren't there when it first happened. So you you don't have good data to work off, right?

Michael Carro 3:47

Well, and when he says you don't have good data, you don't have that quantifiable data, but typically you would still have a lease. So the lease still is gonna govern that entrance and exit and exit. So so if there's a lot of damage to a space that was not identified pre-lease, it's not uncommon that a tenant says, no, it was there. That was there when I got it.

Wear And Tear Versus Neglect

Don Redhead 4:08

Problem is, is if you accepted it and as it as it as if it were a space in good condition, uh, and if everybody seems to not have a memory, that's the part that if especially, you know, we we stepped in to help uh somebody we were dealing with, um, a large medical group, if you remember this story a few months ago. This group, very large, had none of the same players. They're in there for what, 15 years or something like that.

Michael Carro 4:37

Long time, long time.

Don Redhead 4:39

And there's a tremendous amount of wear and tear in in things that are just dated, but there was a lot of things that we had to go back and argue the fact that they were not kept in good condition during the term of the lease. Right. So so you you may go, well, that's wear and tear, but if the HVAC is turned over not working, it's not in good condition. So you can stick to your guns a little bit.

Michael Carro 5:01

That's one of my favorite examples. So in most leases, the the tenant is supposed to be maintaining the property. And what taking a system like uh an HVAC system, a tenant really should have a preventative maintenance system in place, at least with quarterly maintenance. They come out and change what they change filters, they might clean coils, they'll do all the sorts of things. Yeah, they'll do all sorts of stuff. So at the end of the lease, while there might be normal wear and tear on that system, it's going to be, it still should be in proper working condition. So if for some reason the system is not working, that means during the term of the lease, or at least at the time that they turned the things back over, they failed to make it in proper working condition, which is how it should be turned back over. Because using HVAC in a lot of scenarios, 15 years is the entire life cycle of an HVAC unit. So let's assume, and I'm making up this scenario, if the landlord gave them a new air conditioning system in 1995 and they're moving out in 2010, and that air conditioning is unit and not fixable. Well, they used all the life of that system, and so they should replace it with another new system. Now, if they turned over in 1995 with a new system and they left after five years, and the system for some reason wasn't working, it probably just needs a repair.

Speaker 2 6:35

Yeah.

Preventative Maintenance Expectations

Don Redhead 6:35

Right. And that's that's this situation was that they they just got right to the end of the lease and there was a simple, you know, I would say simple, you know, $1,000 here, $1,000 here that all adds up. Repairs that need to be made. But it's easy to tell that, you know, we step in, and if the AC wasn't working, it's not like they were in there for an extended period of time with no AC, right? We're in Florida. Same thing with some of these faucets, they're leaking. You know, there's things that are clearly broken, not normal wear and tear, where they just elected to not make a repair and keep it in good condition versus that, yeah, that faucet's dated. I don't like it, but it it's working, right? There's a difference, and that's what we had to stick to to our guns and kind of help that landlord uh get over the hump uh and recoup, you know, a fair amount of of money to help offset those.

Michael Carro 7:24

Yeah, you did a great job with that one. Um, you know, and by the way, putting my real estate hat on, a lot of this stuff, when I went in and saw it initially. Now, again, we I wasn't testing out systems, I was just simply providing some guidance. And I was like, the place looked like it was in fine condition. Yes, very tired, but still fine. I didn't get into the granular details like Don would get into, where he's gonna dive into the systems and make sure that everything, all the mechanical, electrical, plumbing, roof, structure, systems, door handles, everything is in proper working condition. And that's that is a difference. Normal wear and tear on a floor or carpet or maybe a little dinginess on the walls is different than systems not functioning properly.

Speaker 2 8:13

Yeah.

Don Redhead 8:13

So that to go back to it's really in the pre. If you don't have a pre-walkthrough, if you don't have a delivery, doing at least kind of uh good due diligence inside the lease and saying, hey, this is in good condition, and just just rolling with that is kind of the best thing that that you can do, or the only thing you can do, right?

Michael Carro 8:33

So um another few things on that same vein during the term of the lease uh when nobody's calling you because there's a maintenance issue, you still go in and do a checkup on the space because you might see things that a tenant in place isn't really focused on that could be problematic. I'm thinking a stain in the ceiling tile or something random like that. That's an indicator of an issue.

Mid-Lease Checkups And Night Walks

Don Redhead 9:00

Yeah, we're we're very fortunate that our maintenance guys are trained to do this, right? So our you may not have a maintenance guy, but with our maintenance guys, they're out there, they're in at the property doing something, whether maybe a tenant that's adjacent allows us to do their maintenance. They'll they're just trained to go in, say hello, and then just do an optical kind of scan of everything that's there. And even today, I went and and did one of these walkthroughs with uh someone in our office to kind of train her so she could start taking some of this over. And you know, while we're there, pop into the space next door. And he goes, Yeah, this other tenant told him of a separate issue, right? Didn't report it to us, something for us to fix, but she never reported it to us. So now we'll we'll jump in. So talking to the other tenants, talking to their popping in, uh, doing those kinds of things is is only going to be to your benefit because for whatever reason, there's there's always that spectrum of the individuals that cry wolf over everything, right? And then there's the other individuals who would rather the place fall apart than see you come in to help them. And there's everyone in between, right? So that's just what you have to deal with as part of it.

Michael Carro 10:10

So, you know, each landlord has an opportunity to go in uh into their tenants' uh spaces with notification, whether it's 24, 48 hours. And you want to do this every so often, number one, to check on the health of the tenant, um, check on the health of the space. Uh, and but but kind of like going into your doctor for a checkup, you just want to see if there's anything wrong. Just because they're not saying anything doesn't mean everything's fine. Don't put your head in the sand. Go in and visually check. Go in at nighttime. You may not go to your properties ever at night, but are they properly illuminated? Are all the lights working? What's going on? Make sure you create safe environments for your tenants. Um, if if they're not creating it for themselves, everything like that really is important for the health of your property.

unknown 11:03

Yeah.

Renewals, Notices, And Pre-Walkthroughs

Don Redhead 11:04

So doing that on the front end, the next thing is just being aware that the lease is coming up, you know, whether it's naturally going to expire or it's up for renewal, starting to communicate that so far in advance. Some of them we do it six months, a year, depending on how complex it is. That is always to your benefit because if you can start talking to these individuals, you know, that much further in advance, it allows you to start preparing the space to market. You know, or they may say, Yeah, I'm I can't stay here. I really need to downsize. Oh, okay. Well, I have another spot, right? So we're we're getting you know best practice there. But as we proceed towards actual lease, you know, ending, say they're gonna move out. Here we go. Then what we begin to do is is schedule that walkthrough. Make sure we have all of our documentation in place, make sure you've you know reviewed the lease to see how they should be delivering it, right? And then actually scheduling it really depends. Each one is so different. The best thing you can do, especially for large tenants, is do a pre-walkthrough. That means you meet them there, they probably have 30 days before the lease actually expires, walk through, point out all the things that you expect to be completed, delivered, and really documenting that and then sending them that in a recap. That's the best case, that's the best way to do it. Um does that ever happen, or you know, does that happen every time? No. There's plenty of times that tenants are like, hey, you know, I'm I'm vacating, my lease ends, I'll be out. And for whatever reason, you know, you you just get there after, right? Um, those ones, as long as you have that security deposit, you really need to get it done quickly. So if they vacate, you know, you need to be there probably within a day or two if you're going to be making that claim, which you have that you know, here is about two weeks. So you need to give them notice within two weeks that you're making a claim against that security deposit.

Speaker 1 13:05

Okay.

Don Redhead 13:06

So uh that part is a little you know different.

Michael Carro 13:11

And what has been your biggest um just for fun, your biggest fight on making a claim? I mean, and and a fight that you thought was just ridiculous. Do you have a scenario that you can think of?

Security Deposit Claims And Timelines

Don Redhead 13:26

Yeah, it was one that we had taken over a property, and it was one so many few years back now. We'd we bought the property, tenant was in place, there was no moving checklist, right? And uh they're getting ready to vacate. They gave us plenty of notice, and they said, Hey, we would they preemptively reach out, they go, Hey, we'd love to do a pre-walkthrough. And we show up there, and it was the owner, the owner's partner, a contractor, the real estate agent that was working with them for the new place, and maybe one other person has like it kind of was like a lot of people. So, and what they were doing was it's kind of you know genius. If you didn't state this exact spot that needed to be fixed, if you're like, hey, this wall just needs to be, you know, there's a lot of holes in it, they just need to be fixed. If they didn't get exactly what you said, it was they stuck to that very well to where you if you missed one thing technically, they they went very technical on it.

Speaker 1 14:30

Gotcha.

Don Redhead 14:30

And they had the whole team there that was able to back it up. So we're like, what whatever. It was space was was destroyed. Um they had done some repairs that probably weren't to standard, right? But they were still done to what you know you'd made the request. So it was kind of one of those just learning moments that you're like, okay, you got me, right? You you you got me. Um, so that one was was a pretty big fight. It was like is this a property we own? Yeah, it was a gym out in uh Pace. Oh, Berry Hill. So that was that was fun. I was like, whatever. At the end of it, I was stuck.

Michael Carro 15:04

Yeah, I didn't I didn't know about that. Yeah, that was but uh enjoyable. But that's talk about that turned out to be a phenomenal asset, though.

Lessons From A Tough Move-Out

Don Redhead 15:11

Yeah, and it was, and where when we got to the end of it was we weren't gonna keep the space like it was, anyways. Right. So you're you're not gonna die on that sword, or you're like, okay, you got me. Technically, you didn't do this one thing or this one thing. So it is what it is. Uh other big fights, there's they're not usually a big fight here or there. The biggest thing that they'll say is that they got it in this condition, right? Is it's kind of the classic. So you can avoid that and document it early on. That that's where you can you can save yourself some heartache.

Michael Carro 15:44

Okay, fantastic. Okay, so now you did the pre-walkthrough, you uh the tenant vacates, you gave him some stuff to do, maybe, maybe you didn't. Maybe you're doing your first walkthrough after they vacated. So you want to make a claim. They left certain things not working. Let's just say a leaky faucet, not a big deal, whatever, whatever you would charge for something like that, 50 bucks. I don't know. They uh have you know five light bulbs burnt out, they have, you know, a burn in the floor, uh uh carpet. I mean, let's just say they have what you would consider to be $500 worth of damage. So walk me through how you document it, how you send the letter, and and do you send the balance of the check or do you wait to get confirmation? How does that work? Typically, what we'll do is is everything, everything's so so unique in its own.

Strategy: Repair Scope And Leasing Goals

Don Redhead 16:42

Because it also has to do with your kind of vision, right? For the long term of the space, the property in general. There's some of these that we get these these existing tenants of the space has just been um you know so worn out that we're gonna we're really gonna dump a bunch of money into it anyways. It's probably better, you know, for our our our bottom line to go after every little thing, right? Technically, we have a suit too, right? But if you know that you're gonna go through and put all new flooring down, you go after the burn, you know, in the carpet. It's kind of up to you. I mean, it's just depends on how much you want to fight. We have a lot of fights, so I don't I don't go around. You don't go picking fights, yeah. Yeah, there's that's all day. All we do is fight. Uh and sometimes I reflect that you probably should do that more, right? Uh for the bottom line, and it's it's technically correct.

Michael Carro 17:35

It it really does. It depends well. But is it for the bottom line, Don? Or I mean, let's look at it a different way. I mean, you're you're you're acting like you're being this nice guy and you're being a practical guy. But let's let me pay it in a different scenario. Let's assume that you it is a tired space. The tenant does owe you $500 for the damage that that that it's caused. Your ideal scenario is to make all these rehab, new lights, new everything. Yeah. But yet you get a tenant that comes in and says, you know, actually, I'll take the space as is. I'm gonna make some improvements, you know, on my own dime. Um, and uh so no need to make all these repairs or just get it back to get it back to even and I'll take it over from there. Because a lot of times when when you're talking about improving a space, the rate that you need to charge is gonna increase, right? So if somebody comes in and says, no, just put the five lights back, fix that hole, you know, and and do this, um, and then I'll take it over as is because I want to pay a lower rate. So just getting it back to even is a benefit because you've got a tenant ready to take it over as is. So you're going as if you're gonna do X, Y, and Z, but but that you're putting yourself in a position that you have to now do X, Y, and Z. So I can see it both ways.

Don Redhead 18:54

Yeah, if you're if you are not already actively planning on doing something, that's the best way to do it. So if you if you're literally waiting to push, uh push, if you're literally waiting for this person to vacate for you to start demo and doing improvements, that's that is the one end of the spectrum. But the other end, what you're articulating is is definitely one that you should be going after. Uh the repairs to the light switch, the repairs to shoddy construction, the repairs to whatever to get.

Michael Carro 19:23

Listen, we have a lot of different properties. I'm gonna tell you, some properties, it could have it could be destroyed, but it's in such an area that's coveted and so hard to gain entry into. You can just say, hey, if you want it, you're taking it as is. And it's up to them. You know what I mean? Um, and then there's others that you can spit China like the Taj Mahal, and nobody wants it. So yeah, it's all part of the formula.

Don Redhead 19:50

It's it's part of the formula. So it's you gotta get, you know, we're I was talking to somebody yesterday. It's like you have so much data there, but at the same time, you have to just lean on a little bit of that experience and you need to know whether, yeah, do I need to even put money into this space? And then yeah, people that come in and go, you know, I rented this space and I put a lot of money into it. Uh, and you know, whatever, X, Y, and Z. But the reality is most of the time they're paying a rate that's reflective of them needing to put a bunch of money into it. Right, right. Um, so yeah, that right way to do it.

Long-Term Ownership And Reinvestment

Michael Carro 20:24

They're paying Don's example, is they're paying a below market rate. So they're getting the juice from the savings every single month. Yes, they might have put a little bit of money into it, but it was because it was below market anyways. So that's the attractiveness of a below market lease, is the tenant then has more money to put into the space uh as they see fit. And that's a lot of properties we buy, we are price per square foot buyers. So if we can be below market three to five dollars a square foot, the tenants want our spaces more. Now, maybe they have to put a dollar or two dollars a square foot into the space, but they're more than happy to do that on a one-time basis as opposed to paying an extra three to five dollars a square foot every year. So there is this, there is a tug of war or a balance, as Don mentioned a couple of times. So, so I think that is worthwhile. I mean, you know, our balance sheet and our our financial statements are keyed in on so much uh balance in our expenses. And if we just go willy-nilly on expenses, and I think we do a better job than most, we are willing to spend a lot more than a lot of our landlord clients because we are long-term holds. We we don't really look to flip our properties. So we're we're willing to spend more as a long-term investor.

Don Redhead 21:45

Yeah, and it's I think because we we've also done a really good job trying to understand the preservation and the maintenance of those those properties. That, you know, the older you get, right, you're you're way, way bigger into maintenance and excited about random things like gutters and and getting new tires on your car and and making sure it has brake pads. So you don't mind spending a little bit of money because you know you're gonna try to take care of it, even if the tenants maybe won't, maybe you'll play a more active role in it to where so many of our spaces now we do the preventative maintenance on the HVAC or in control of the preventative maintenance at those facilities because yeah, they're gonna pay for it anyways, we're gonna get a better deal and we have a vested interest.

The Ultimate Move-Out Checklist

Michael Carro 22:30

Um, well, using that example, you know, we have a uh a 40,000 square foot office building, multi-tenant building. And we've had it now for four years. We sunk all the big money in early on. It's kind of been coasting along. Uh, we've gotten to an occupancy now that is pretty high. We just had two other leases. One of the spaces hadn't been leased in three or four years. And so we're just excited. And now we are it we get this extra life into the property. We're like, okay, let's make sure we do this and this. And so we're going overboard. Yes, we're building out the space for the new tenant, but we're also looking at this as an opportunity. What else can we do to invest in this property to make it even more attractive to other new tenants? Yeah, and especially the existing tenants. So um we actually really get a kick out of improving our properties better and better and better as we the longer we own them. So don't be afraid to reinvest into your asset.

Don Redhead 23:31

Yeah, and and one thing to to to circle back with kind of the walkthrough, you know, as I'm I'm reflecting on some of the things that if you're doing it or if somebody else is doing the move out uh walkthrough with the tenant or or post, what you really need to do is document absolutely everything that is an issue. So having a good checklist, regardless of what, you know, someone walking through the checklist, they'll take all the photos, they'll they'll make all these notes. And then it's really on us to kind of make that determination, that more complex decision of what you know we're gonna go after and fight. But you really should, for just best practice, have a good walkthrough checklist, you know, review everything, if there is issues with the floor, if there is trash left behind, you know, if there's you know stains in the ceiling, if the lights are not working in certain areas, if there's you know damage to the walls, whatever it is, you really should document each and everything. And then once again, case by case basis, how far are you gonna go? If there's a lot of little things, then you know, maybe you have a claim against the whole. Uh, maybe if there's one egregious thing, you know, then it just everything's kind of case by case, but you're never gonna uh have an issue with over-document.

Michael Carro 24:49

Well, the the the uh the checklist, I think, in anything that you do, especially in real estate, is critical. Um if you're going in, as Donnie mentioned, in an optical overview, uh, I would say if you're just visually looking at it, um you're gonna see things. Well, let me put it this way, you may or may not see things because what you're looking for are obvious things, but there are gonna be so many things that are not obvious. So on your checklist, it may, there might be a section on ceiling. Okay. Do you see any ceiling stains? Do you see uh a buildup of of dust on the on the vents that haven't been cleaned or anything like that? Do you see uh any wetness or condensation or or uh whatever on the ceiling? Then you're gonna go to the floors and then you're gonna go to the bathrooms. Are all of the uh toilets flushing properly? Oh, you know, I didn't even think about flushing the toilets. Are they even working? Maybe, maybe some of the water's not even on some of the toilets because they're leaking and they didn't get them fixed. So this checklist is gonna be so granular. And if you know just to go through the checklist, you're gonna be a lot more comprehensive in in every time. Every time.

Don Redhead 26:03

And so they may be there talking, right? You may have somewhat a relationship with them and they're they're talking about maybe your favorite football team or whatever.

Michael Carro 26:11

If you don't have a checklist, purpose to distract you from your role, yeah. Yeah, it's exactly right.

Don Redhead 26:17

Oh, yeah, how's your kids? Oh, they're great. Um, yeah, everything you can do and lean into a checklist, that's just like you said, best practice for so many things in real estate, closing on the property.

Restaurant Walkthrough Complexities

Michael Carro 26:29

Um, do you ask for things like um we mentioned air conditioning a moment ago, but do you ask for a preventative maintenance? Uh yeah.

Don Redhead 26:39

Well as for the contract. The contract and stuff like that.

Michael Carro 26:42

Yeah. So I mean, when was the last time the air conditioning was maintained? When was if it's a restaurant, when was the last time the grease trap was pumped? When was the last time the hood system was cleaned? When was the last time the fire suppression system was charged? When was the last time they did a backflow prevention uh uh inspection? There's all of these things that you can't see that should be done upon exit.

Don Redhead 27:04

Right. That, and you touched on something because you know, where my mind's going right now is this you know, office and retail for whatever reason. But restaurants are the most, I'll say, complex walkthrough because of those things. Like you said, if if there is a restaurant there, you do want to know if there's a manifest for that grease trap because if they are, and most likely they are, there's they're gonna push that last pumping and not do it. And you're gonna be sitting there, depending on how big it is, it could be a thousand, could be you know, two thousand dollars, just to get that grease trap pumped that you're sitting there holding the bag for because you missed that one thing. Right. And you know what? It's not gonna show up until the new tenant moves in and they call and they go, hey, our drains are going really slow. Or there's some other issue like that that they're backing up and and then you're gonna go, oh, it's because the grease trap was never pumped before they moved out. Um, and then you said, like is the hood cleaning, fire suppression. Um, if you get into those kind of complex properties, those ones you have to have the best walkthrough down there.

Electrical Red Flags And Code

Michael Carro 28:09

Period. Absolutely. You should have a good walkthrough plan for all your properties. Um, just some of them are gonna be more complex than others. Don, what do you see from an electrical standpoint? I mean, I uh most properties that we purchase, they don't have a lot of electrical issues, but but what do you see as the most faulty thing?

Don Redhead 28:28

Typically, it's if someone had work done after they took uh over the space, and whether they tried to to do the work themselves or they paid a buddy who knew a little bit about electrical, which by the way, folks, is typically going to be a violation of your lease.

Michael Carro 28:47

Most leases require that all work is done by a licensed and certified contractor. So if they did this stuff, that's that's also a no-no.

unknown 28:56

Yeah.

Fire Safety, Costs, And Closing Notes

Don Redhead 28:57

Yeah, that and a lot of times you can actually, of course, it depends on how it's it's laid out, but many times you can go to an electrical panel and you can actually see uh at the top of it, you know, traditional commercial wiring is what we call MC cable. It looks like a metal kind of aluminum tube that's that's flexible. And you'll see where they come out of the panel with some kind of residential wiring. Typically it's like a yellow or white plastic. Uh, that's kind of a big red flag that somebody's been in there, that somebody's done something a little a little wacky. Um, the other ones is we did a restaurant one day you were talking about. The guy defaulted, so it's we couldn't, we went after his entire security deposit, so there's no more money. But he had went to like a Home Depot and bought a bunch of shop lights and hung them up in the ceiling and basically made a connection, cut the yeah, the the traditional plug off of it, and then wired him himself. So you look up and there's wire nuts and everything's exposed and it's it's not to code and and just a horrible fire hazard. Yes. So and he uh and he had a fire there before okay well there you go and not surprising oh yeah um so yeah and making sure all those inspections are done uh the hood the fire suppression uh fire extinguishers at the end of the day those kinds of things all add up a tremendous amount I mean it it really does it's it's kind of unbelievable how fast you can get to a lot of money when when just all those little things aren't done.

Outro And Listener CTA

Michael Carro 30:33

Yeah well I know today's episode was not a very sexy one for a lot of people but it is one that will drop money to your bottom line if you pay attention. The bottom line may be just cash savings out of your pocket where you had the tenant uh uh do those repairs but don't miss these boring episodes because boring is also where the money lies so that wraps up another episode of our Blue Dirt podcast where even idiots can make a killing in commercial real estate. That's a wrap for this episode of Blue Dirt. We're here to help you build smarter invest wiser and create long-term value in commercial real estate one solid foundation at a time if you found today's insights useful be sure to subscribe so you never miss an episode and if you know somebody who could benefit from these discussions share blue dirt with them. Got questions or topics you'd like us to cover, reach out we'd love to hear from you. Until next time, keep digging deep stay sharp and remember real value is built from the ground up see you on the next episode