The right way to buy a storefront, according to Ryan Serhant

00:00 Speaker A

So, Ryan, for our small business owners who are deciding whether to purchase or continue to rent their space on Main Street. What is your advice?

00:06 Ryan

My first piece of advice is to first make sure you’ve squeezed every last drop of lemon out of your digital storefront.

00:15 Ryan

It’s really important. You’re not doing these at the same time, right? First of all, you have a digital storefront because you can reach more customers even on the high street

00:23 Ryan

in their hands before they reach them before they pass.

00:26 Ryan

Ok my love? Then you need to think about marketing awareness because if you want a storefront to maintain inventory, you don’t need to do it at retail price. If you want a storefront to meet customers, you don’t need to do this at the retail price.

00:36 Ryan

If you want a storefront for branding and advertising, you may want to do this at the retail level. Um, but you’re also looking at your costs in terms of volumetric square footage in terms of how much space do I need in a building, a department store or a ground floor store or a second floor store, you’re also looking at it in terms of advertising costs and how much money you’re actually going to save because you have banner space.

00:56 Ryan

Right? This way. Um and then it’s a math talk. What is your payback period in the field? What is your path to profitability in this field and be sure, especially if this is your first time doing this. I’ve been there before.

01:09 Ryan

You don’t accept anything long term

01:12 Ryan

In a way that would completely ruin your life.

01:17 Ryan

Right? So, you know, like where I rented the first building I bought, I took a 10-year option because if everything goes well, I don’t want to get fired.

01:24 Speaker A

Right.

01:25 Ryan

But those were three years that I paid a little more for. That’s why my climbing in the first three years was heavy. But they depreciated over seven,

01:35 Ryan

Ok? So the hosts could get what they needed and they felt good because they thought they were taking advantage of me in the first three, but actually I was taking advantage of them in the back seven.

01:41 Ryan

And most landlords want to be able to cover their bills to begin with and be able to say they have a high net lease, right? So they can get out that way. You generally have no personal guarantees, and if something bad happens, you don’t have the ability to sublease, and you have to bring in someone to split the space, divide the space, use the space, whatever way you can survive.

01:58 Ryan

And if you do all of that and all of those boxes are completely ticked and you still want to do it, then go for it. Life is short, an asteroid may hit tomorrow and all the dinosaurs and we will die. So what are we talking about?