JF 4230: Ground Leases, Deal Discipline and CRE Longevity ft. John McNellis

In this episode of The Best Ever CRE Show, host Amanda Cruz welcomes real estate veteran John McNellis, a developer with over 40 years of experience and author of the newly released third edition of 'Making It in Real Estate.' McNellis shares hard-earned wisdom on deal discipline, longevity in real estate, and the importance of staying within one's 'weight class'—a philosophy that emphasizes sustainable growth over aggressive scaling. He recounts his most significant failure, the Birdcage Walk Shopping Center deal, which nearly bankrupted him due to over-leverage and poor market timing during the 1980s S&L crisis. Despite this, he advocates for strategic risk-taking within a defined niche, particularly in neighborhood retail centers anchored by strong tenants like Chick-fil-A and Walmart. He also critiques the overreliance on IRR as a metric, promotes the use of 'Net to Me' for personal ROI clarity, and champions ground leases as a low-risk, high-reward strategy. McNellis advises new investors to start small—buying and renovating a single-family home in a high-supply-constraint area—before scaling into larger commercial deals. He remains skeptical of national expansion, emphasizing that life and family matter more than endless wealth accumulation.