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Outrunning Failures
Outrunning Failures: Your guide through the highs and lows of commercial real estate investing.
Join us as we delve into real stories of setbacks turned stepping stones, sharing invaluable lessons and strategies to navigate the market's unpredictability and turn failures into the foundation of your success.
Outrunning Failures
Lessons from Flipping to Investing with Dan Lewkowicz
Today’s guest is Dan Lewkowicz.
Dan is a seasoned real estate veteran with over 15 years of experience, starting his career with "house hacking" and flipping houses in metro Detroit before founding Renaissance Real Estate Ventures, which specializes in residential property acquisition and renovation in Detroit.
He previously served as a Senior Advisor at Fortis Net Lease and a business development executive for Amazon in Detroit. Currently, as Senior Director of The Lewkowicz Group of Encore Real Estate Investment Services, Dan specializes in various commercial real estate sectors, including shopping centers, medical office buildings, industrial fulfillment centers, quick service restaurants, and automotive repair and parts stores.
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Creator/Main Host: Vish Muni
Show Advisor/Editing: DBT Marketing
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Welcome to another episode of Outrunning Failures. today we have a special guest, Dan. I met Dan a few years back on one of the Zoom calls where I used to attend to, network and learn from each other. And that was another a great podcaster and investor, George Roberts. So with that, Dan started in real estate and he was working on single family homes. He escalated into commercial and also he was working with Amazon for a while. And now Dan is heavily into commercial and he's doing a lot more. And with that, allow me to welcome Dan. Dan, could you please tell the audience a little more about your background and what got you into real estate and what are you doing now?
>> Dan Lewkowicz:Yeah, absolutely. Thank you so much for having me. My name is Dan Lewkowicz I am senior director here at Encore Real Estate Investment Services. I've been in and around real estate for a long time, since 2005. and you know, right now I focus primarily on brokering, net lease investment deals. So I, advise clients, buyers and sellers in the purchase and sale of net lease properties nationwide. what got me into real estate? I mean there's a lot of variety of factors, you know, different individuals in my family, you know, a long time ago had been involved in real estate and it was always something that was interesting to me. But back in 2005 I had helped start a company with some friends called Disability Made Easy. It's a barrier free home modification company still in existence today. My good friends still run it and essentially we modified homes to make them handicap accessible. I was involved in all the sales and marketing. But when I first started, I got a chance to spend some time with our project manager. And I remember, I'll never forget this, this was like my aha, ah moment. I was driving with him quite a ways away to look at a property. We got there, there was an individual who had been in a car accident about 20 years prior. And we walked in the property and looked around a little bit, walked out and I asked him if he wanted me to go pull the van around so we could get out of here. He's kind of looked at me sideways and I said to him, like, what are we going to do? There's nothing that can be done here. There's nothing that you can do to make this property fitting for its occupant. He didn't say a word. He took out a piece of graph paper and a pencil. And in about 90 seconds he sketched a Brand new front elevation and a new layout to the property. And it was just mind blowing to me that you know, some changes like that could make the property work for the current situation of its owner. So I kind of put that memory in the back of my head. and as it became time for me to buy my first home, so in the middle of the, you know, great financial crisis, so the prices are kind of, kind of crazy to reminisce on. But I found a property, went under contract for my family, a nice starter home,$175,000. and I started thinking I'd heard that there were some bank owned properties one block over. So I'd call the lenders and there was a property that was almost exactly the same, a little bit bigger, but almost exactly the same as the other one that I was under contract on. so I ended up buying that property for $81,000 and it needed a lot of work, put about 60 grand into it. But I did not use a general contractor. I hired out every single one of the trades individually and I told the, the tradesman I said I'm going to pay you a little bit extra, I'm going to be annoying, I'm going to be hanging out here asking you questions because my goal was to learn everything about how house flipping worked. So I bought this house and by the time I was done renovating it, my friends were joking with me, asking me what I was going to do next. So I went and bought another one, another one, another one, another one and eventually I flipped over a hundred houses and that's really what got me into real estate. is just that those experiences right.
>> Vish:There, that is fantastic. Dan, thank you for thanking for looking at, making sure the houses were handicapped proof and then it worked well for the disabled. so that being said, so what do you do now? Do you also employed with another big brokerage firm and advise clients on commercial properties? Now is that, is that your full time job or you're an investor also?
>> Dan Lewkowicz:It's more than a full time job, that's for sure.
>> Vish:Right.
>> Dan Lewkowicz:I am an investor as well. I still occasionally will do the, you know, the residential purchase and flip. But what I'm more into these days is joint ventures, specifically debt funds where essentially like we'll pool capital and lend to developers or investors who need, you know, short term access, to capital. And I do most of that out of my SEP IRA because I'm self employed which is actually really nice because my taxes are deferred. So you know, that's, that's. I've decided as I've gotten older that I'd much rather just lend the money than be the one actually, you know, overseeing the, or, supervising the construction, for example.
>> Vish:Well, that, that's actually great because not everybody understands the power in you lending the money to the right people. Now do you, do you partner as a joint venture or invest in the deals only on, only with friends and family or how does it work or do you bring the deals?
>> Dan Lewkowicz:no, it's more so. When I first started getting into this, I talked to a lot of people because I wanted to find like the right deal. I looked at a lot of syndications and ultimately they were all missing one thing. They might have been great deals, but they were missing one thing. They were missing or two things maybe, but a relationship with the operator and trust. Right. So I didn't have a relationship with operator and have trust. So it made me very uneasy with investing capital in those types of situations. Therefore, I've chosen so far to partner and invest with people that I know and trust. That to me is more important even than the deal. Because if I have that knowledge and that relationship and the trust, then I believe that they're not gonna, they're not gonna invest in a deal that they wouldn't, that is a bad deal. So they're not gonna steer me to invest in. That being said, some of these deals are actually net lease deals. So I understand them very, very well and I can underwrite them and feel comfortable with the fundamentals of the deal too. When it's someone I know and trust and it's a deal type that I'm very familiar with, that's just like a double whammy. Win, win.
>> Vish:Well, that's fantastic because you spoke about two most important, aspects of any deal. That's a relationship and trust. Because, me personally, I've had, a bitter experience in terms of investing in syndications. And that doesn't mean everybody are going through it, but sometimes you, you learn the hard way. School of hard knocks is the best way to learn because I had great relationships with the, with the operators, fantastic relationships. But, but what happens if you don't trust them? What happens if you never done a deal with them? So I think both are extremely important. I think knowing one person and liking them and trust, I think that goes a long way. So that being said, we are on this podcast, Outrunning Failures, where we, where we talk about one epic, I wouldn't call it failure, I would call it a challenging deal, which you had, which, which I call it a feedback. So which has changed the way you invest, the way you analyze deals. Can you share one epic failure or.
>> Dan Lewkowicz:Sure. So back in roughly 2016, I moved my operations out from the suburbs. This is an in house flipping that is. And I kind of rebranded my company called it Renaissance Real Estate Ventures and moved it completely into the city of Detroit. City of Detroit was seven years behind the rest of the country in terms of their progress on the foreclosure crisis. Prices were still very depressed, whereas in the suburbs, prices had really started to appreciate over the years. So I did that. I had a lot of success in Detroit. it's a wild, wild west. It's a, ah, it's a jungle. It's, it's very difficult to be successful there. At a certain point I had built up an inventory of properties. I was getting really good at buying the properties, but getting them renovated and resold was, was posing more of a challenge. So I had a number of properties in a specific neighborhood that was ridden with violence, with crime, with, with gang activity. and it just started, it just became one thing after another, especially because a lot of these properties I bought in the winter. And one little known secret in Detroit is Detroit in the winter is much different than Detroit the rest of the year because in the winter nobody comes out in the street and causes trouble or at least very few people. Once it's summertime and there's no air conditioning, people are on the street causing trouble. So things started happening. I mean, there started to be raids on our, the block that we were renovating three houses. And you know, there'd be SWAT vehicles and helicopters and you know, then there was unfortunately some domestic violence across the street. I had employed two of the children, you know, not young children, but in that, you know, in that, home, I'd given them a job, you know, doing some stuff. And they came to me telling me that they're, you know, unfortunately, their stepfather had murdered their mother. And I, I, like in front of my eyes.
>> Vish:Wow.
>> Dan Lewkowicz:Yeah, it was crazy, right? And you know, I just. Houses were getting broken into and I had this one specific house. I'll never forget it. It was a beautiful house. I mean this house anywhere in the country would have been 300 grand plus even at that time I paid like 15,000 for it. Okay. And I was, I had my numbers, I knew what I could sell it for. But there were so many problems, so many things that were going wrong. There were foundation issues that I had to remedy that. I was in this house and I was on this block, and I was, like, watching. Every Wednesday there'd be a raid. And, you know, it just. It just was so uncomfortable. Things were getting stolen, and as soon as I put an AC condenser in, it'd be gone the next day. And I just started, you know, remember looking at my numbers, saying to myself, like, this house is worth less than you put into it. Like, you're gonna sell this thing and lose, and you're not even done yet. It was the hardest that, One of the hardest things I've ever done was to put more dollars into the house, knowing that I wasn't going to get them back. I mean, I knew that I had to put the dollars in if I wanted to do, like, less bad, right? I could have just sold the house as is, but that would have been even worse, right? No one wants to pay anything for a project that isn't finished. So I kept going. I finally finished it. I got it on the market, got it sold. I had like three, maybe somewhere between three and five other properties in that area of Detroit still. That's when I started transitioning into commercial real estate brokerage. And I remember I said to myself, dan, this is toxic inventory. Actually, I spoke with a very close friend, mentor, and I described the situation to him. And, and, and there's a, there's a learning in that, right? Because mentors and close friends are very important. So we both decided him. He said to me, and I echoed it, like, this is toxic inventory. You got to get rid of it. You know what? Nobody, nobody hates, selling for a loss more than me. I knew that I was going to sell for a loss in these properties, and psychologically, that's why I kept them. And I was losing more money and more time and more energy. So I decided that I was going to do the best that I could. I was going to offload these last four to six properties, and I was going to focus exclusively on commercial real estate brokerage. And doing that, once I finally sold the last one and got off my head, those properties felt like I would wake up in the middle of the night and they would be a locomotive coming at me full steam. That's how heavy they were. Honestly, I would see them coming at me. When I finally did that, I sold them for a loss. I was able to get rid of those locomotives coming at me and take that weight off my shoulders. Oh, I feel it right now, even. It was such a great Thing to do.
>> Vish:Well, you know, Dan, that is, that is so important that, because just it's not just the price of the property. What, we all fail to realize is the location is so important. But sometimes because we had a, we had a deal that's a great apartment deal in the city of Houston. We got it at a great price. And and when we bought was in the path of progress. And imagine a subdivision being built with a 400 home, single family homes, each house selling for 200k, 300k. And the cities also, spending a lot of time and money in terms of redoing the sidewalks and other things. But little did we know, the single family homes are built, the subdivisions are sold and they're all gone. And the city finished widening the sidewalks, beautifying the whole place. But this apartment took a U turn. Nothing changed. It only got worse. And after three years, like, like what you were talking about, the ACs getting stolen and whatever we put in there, the next day it's gone. There's a homeless situation, there's a crime, there's a drug, there's prostitution. Every other day this property is in the news. And there's a lot of things went wrong and that was a big learning experience. So it was a good location, but the price was right, but we just couldn't change the tenant profile. Just couldn't change. So. So that being said, so how do you. So is that one of the reasons why you moved away from, residential into commercial or.
>> Dan Lewkowicz:Yeah, I mean, like I looked at it, I said, you know, do I want to? I mean there's another story. Like I had a different property in a nicer area that actually flipped and made considerable profits. But I remember it just kept getting broken into. I mean, one day we had, the guys went out to the garage, they opened the garage, they went back in the house and they were going to install the cabinets, right? Then guess what? They walked back outside, the cabinets were gone. Brand new cabinets. Then we had AC condenser gets installed, it gets stolen. Later that day, the guy comes back and tries to sell it to us. Okay, So I remember, I'll never
forget this. It was like 11:30 at night. I'm at home and my kids are in bed. I get a call from the Detroit Police Department. We need you to come down to the property. Okay. I literally put on a bulletproof vest and
I left my home at 11:30 at night. I said good night to my daughter and I said, God almighty, what is she thinking right now? You Know, like, what am I doing? I'm driving into the problem. The police want me to come there. That's not for me. So all these things combined, it made me look at commercial real estate brokerage where, you know, keep in mind these houses, I'm putting out my own money or I'm borrowing from friends and family. Right? Commercial real estate brokerage. Yeah. I invest a lot in my business now, but when I started it was a minimal investment flipping houses. I'm, I'm either swinging the hammers or I'm supervising the guy swinging the hammers. I'm dealing with the police, I'm dealing with break ins. I'm dealing with all this stuff, right. A lot of risk, a lot of time, a lot of my energy. I have to physically be there. Commercial brokerage doesn't have that. But I still get paid at the closing. Right. I'm still probably the highest compensated individual on, the settlement statement. In fact, in some cases I make more than the developer. So, yeah, that to me, it contributed to this transition.
>> Vish:Well, that in itself is a game changer completely. Now.
>> Dan Lewkowicz:Yes.
>> Vish:Now how do you mitigate your risk? Now if you were to, for anyone investing in the single family homes or doing the flips, what is your single one, single advice to them?
>> Dan Lewkowicz:Listen, I think that single family house flipping, it's a gateway drug. It was a gateway drug for me. It got me into different, more advanced real estate investing. My advice is get out. It's not scalable. I mean, take it from someone who tried to scale. I bought box trucks and floor sanders and jackhammers and paint sprayers. I hired teams. It's hard to scale. I've, I don't know of very many people that have done it successfully. So I would say look into other forms of commercial of real estate investing because it's a very hard business to be successful in.
>> Vish:Right, right. so, so how long have you been in commercial right now? And what exactly do you do? Single tenant.
>> Dan Lewkowicz:Yeah, so I've been, I've been a broker now for seven years and I focus on two buckets. I focus on your single tenant net leased assets like your Taco Bells and Wendy's, Your Walgreens and CVS's, your Dollar Generals and family Dollars, your single tenant medical office buildings. you know, your automotive parts stores like discount tires and tire, Kingdoms and Mavis Meineke, those types of things. Advanced auto parts, stuff like that. Advanced auto autozone. that's the single tenant net lease side. And then I also do a Lot of shopping centers and even some multi tenant medical office buildings as well.
>> Vish:Okay, that is fantastic. Now this is nationwide, right?
>> Dan Lewkowicz:Nationwide, that's right.
>> Vish:Right, right. So, so why, why real estate? What, what do, why do you, what do you like so much about real estate?
>> Dan Lewkowicz:Everything. I mean, it's exciting to me. I know, like I'm that guy that if I go to a party or a gathering, I'm just waiting for somebody to talk to me about real estate. I don't want to talk about anything else. I don't want to talk about the weather or politics or sports. I want to talk real estate. So it's just something that's exciting to me. I think that there's so much opportunity for, for so many people, whether they're, you know, at every level, by the way. Right. You know, seasoned investor, all the way down to an inexperienced new person. So I just like it because the opportunity and it's exciting. There's so much to learn. I really love it.
>> Vish:Well, that's, it's. I mean, we are more like a real estate geeks. Like we, we love to real estate all day long and we say, we'll still say, oh, you know what, I think we have a lot to catch up. Let's meet tomorrow. And I.
>> Dan Lewkowicz:Right.
>> Vish:Because for me, like you, if, any party or if any social gathering, if I have nothing to talk about, I talk about real estate, I talk about fitness, I talk about networking and relationships.
>> Dan Lewkowicz:Yeah.
>> Vish:These are the things which gets me excited.
>> Dan Lewkowicz:Yeah.
>> Vish:I mean, it's not watching the news, it's not the political thing. None of these. I don't even watch tv. So to the point, because. But if there's anything to do with real estate, I would watch, but otherwise, no.
>> Dan Lewkowicz:Right, right.
>> Vish:So. And what is your why. Why do you, why do you do what you do and what gets you going every morning? Because there's always ups and downs. It's a roller to ride.
>> Dan Lewkowicz:And yeah, I mean, I've learned. I had the other day I had like, I just was kind of. I felt overcome by certain feelings that were getting me down and I just said to myself, this is one day. I, I'm, I'm a firm believer in, in, in one day at a time. Like this is one day. Keep going today, tomorrow will be another day. And I woke up the next day and felt great. So my why is really, it's a few things. It's my family, I have six children. I want to build something for them that's very important for me. My why is also just to be blunt and frank is it's my life. Like, I am doing this so that I can live the life that I want to live. I want to be able to travel. I want to be able to retire early. I want to be able to, you know, own commercial real estate and residential real estate and have a portfolio. I want to be able to have that freedom. So those things together are my why. And I think it's important for me because it's not just outside of myself. It's not just my children. It's also. It's also me in my life.
>> Vish:So. So what do you do outside of real estate? Because I know, I know we all have a, passion outside of real estate. Because, I ask people. There are four things, which is, every one of us have. I mean, since you're in Detroit, you would be. You would associate this very closely. It's called Ford. F O R D, like a automobile. Ford. I mean, F is for family. You already told you have six kids and they are all your wife. And O, ah is for occupation. Occupation. You're already a real estate investor and a broker. And, what is your R and D? R is a, recreation. So what do you do outside of real estate?
>> Dan Lewkowicz:My recreation is definitely cars, ironically. So I'm a big car enthusiast. I go to tons of car meets. In fact, we have the. Starting tomorrow, I believe is the Detroit Auto show, which is formerly called the North American International Auto Show. It's a huge auto show and one of my cars is actually in the auto show. So I'm super excited about that. You know, it's winter here and it's great to have an opportunity to have a, an event that's. That still centers around cars. So I love cars. I love driving cars, racing cars. I love going to car meets and talking about cars and all that stuff. So that's definitely. That's a recreation for me. Music, is a recreation for me. I've been playing guitar since I was, since I was 7 years old. So that's a recreation for me. and then, you know, working out. I love to do vinyasa yoga. I do hot vinyasa yoga about three times a week. So that's definitely a recreation as well.
>> Vish:Well, that's interesting because you are in Detroit. I should have assumed you like cars.
>> Dan Lewkowicz:Yeah, exactly. Good analogy. Yeah. And.
>> Vish:And what about your dreams? Because the last is the dreams. F, ah, O, R D. I mean, this is.
>> Dan Lewkowicz:I never talk about this, but I have a dream well, it's.
>> Vish:I mean, it's a. It's an option. You don't like to talk, that's fine. No problem.
>> Dan Lewkowicz:No, no, no. I mean, I have a specific Dre. It's always in my head, but I never share it, so it's funny. So there's this band that I love. They're called oar. Stands for Of a Revolution. I've been listening to them for 25 years. They've been touring for 30 years. They're amazing. I love them so much. My dream would be to be the lead singer of oar to be on stage and to be able to feel that energy to the crowd and have that connection and be one with the music. That's, like. That would complete my life. Okay, so. So that's more of, like, a dream dream in terms of, like, attainable dreams. Maybe that is attainable. But attainable dreams would be. You know, I want to have, I want to have a portfolio of real estate that provides enough income that I don't have to work. Granted. you know, I will continue doing deals, I'm sure, but I want to have that. That's definitely a dream for me. And then another dream for me. This kind of comes back to the F. Is like, I want to be, you know, around a campfire or around a nice meal with my kids and grandkids. You know, my oldest is almost 16, and, you know, I'm sure I'll blink, and she'll be 25, you know, before I know it. And I would love to just. To be able to just have that three generations of family. Me, my kids, my grandkids, all together. That. That's, to me, a dream.
>> Vish:Well, that in itself is the biggest why anyone can ask for. And, And I. I have just one daughter who's 15, and. And I see how fast the 15 years has gone by.
>> Dan Lewkowicz:I know.
>> Vish:And, And luckily, I decided about 10 years back to step back. And, me coming from India all the way, and I seen how I didn't get that quality time with my parents. So, yeah, I didn't want to be that parent again. So that is why I decided to step back and spend whatever time I can with my daughter. So I didn't miss a single event in her, life. I mean, no matter what time it is, because I knew sooner or later, it's going to. It's all going to be over.
>> Dan Lewkowicz:Yeah.
>> Vish:And, that is what it is. So. So that time is not wasted. I think we all should consciously take time from what we are doing to do that. So.
>> Dan Lewkowicz:Absolutely.
>> Vish:Yeah. So. So what's, what's next in real estate for 2025? Do you have any, have you set aside any goals for 2025?
>> Dan Lewkowicz:yeah, I definitely have, I definitely have. I have certain, you know, financial production goals in mind that are higher than I've ever, achieved. So I'm looking forward to that. And, I mean, I'm really heads down one day at a time just doing the, doing the, the actions that produce results day in and day out. And it's like, you know, I don't even know of a good analogy, but, you know, it's like you, you go to work and you fill up your bucket for the day, and then you go to the next day and fill up the bucket and you forget that you filled up the bucket the day before, and soon enough you've got plenty of product. So that's really just, that's what I do. I'm, I, you know, my office has one window and the shade is down the whole time, and I just put my head down and grind and I like it. I really like it.
>> Vish:That's good. You're always, in the zone, then you don't, I mean, you got to be accountable for every minute of the day at the end of the day, and nobody cares how we spend our time, but only we need to figure out how we spend. So. And, how can my audience reach you? How can my listeners reach you, Dan? What is the best way to reach?
>> Dan Lewkowicz:Yeah, so first of all, you know, I put out daily content on LinkedIn related to commercial real estate. Every now and then there's some car stuff, especially in the driving season. But, you can reach out to me there. You can follow me there. My first name is Dan. Last name is Lewkowicz L E W K O W I C Z. Again. L E W K O W I C Z. Send me a message, give me a follow, tell me that, you know, you, you saw me on out, right? Running failures. that's one way. Another way, you know, I'll give out my direct cell phone. It's 248-943-2838. Again, 248-943-2838. if you own commercial property, if you want to know what it's worth, if you're thinking about selling, if you've got a deal and you want another set of eyes on it, even if it isn't my deal, please reach out. I'd be happy to. You know, to connect and, you know, provide value in any way that I can.
>> Vish:Well, finally, thank you, Dan. Thanks for taking time from your busy schedule and joining us to add some value and outrunning failures.
>> Dan Lewkowicz:Absolutely. My pleasure. Thanks for having me.