Billboard, Garage, and Land; deals 1, 2, and 3 for this newbie
I'm finally ready to post about some initial success after hundreds of hours of forum reading, podcasts, local RE meetups, etc.
The deals:
1) 75 x 95 lot in Paterson, NJ with a billboard. The lot has never been developed as it's basically a cliff with a plateau sandwiched between a two family house and a boarding house. It was taken back by the city for taxes and I purchased it at auction in March from the city, but didn't close until this month. It was not a tax certificate sale, rather city owned property sold with clean title. Purchase price was $15,400 including auction company commission; all in $17,400 with attorney, title insurance, and other closing costs. As for the billboard, now that is the interesting part. The board is owned by a large corporate media company who paid a monthly ground lease to the prior owner of roughly $100 a month. We are in the process of obtaining the original lease, transferring lease payments, and negotiating a new long term lease as the rent is below market. The property is ideal for advertising as it's across from the Paterson Great Fall National Park which has been doubling attendees since becoming a National Park several years ago. The long term plan is to draft an easement in perpetuity for the billboard and then sell the property which can be built on.
2) .5 acre undeveloped commercial parcel with 200' or highway frontage on Route 46 in Budd Lake, NJ. This property and #3 came about after looking through Craigslist Ads. I met with the owner regarding property #3 and while talking back and forth he mentioned that he had another property (this property) which he was losing due to a tax foreclosure. We struck a deal of $10,000 including the payment of the back taxes of $7800 which netted him a little over $2000. We are all in for about $12,500. We came down to the wire on this one and closed in about three weeks with only about two weeks to spare before the foreclosure was final. The prior owner paid $40,000 for the lot in 2006 and I estimate it to be worth $45-$65,000. The game plan for this property is to flip it or sell it with owner financing with a down payment covering most of my costs.
3) 25x47 lot with 400 SF Masonry garage in Paterson, NJ. This property was listed by the seller on Craigslist for $30,000. We struck a deal of $25,000 with the owner holding back $5000 on a note for 60 months at 0%. The seller financing was more so I could get experience with it and I just figured I throw it out to him and he was amenable to it. The property is not in a great area, but it's a solid building with a completely fenced in yard (8 foot corrugated metal fence) behind the building with an additional 300' of storage. No water or electricity and would be for storage only. What I like is that the doors can be converted back to 9 feet high which allows for commercial vehicle access. The long term plan for this property is a storage rental. Rental rates for contractor storage is about $400-$450 per month for this size including back yard and loft storage. We close in about two weeks.
I'm feeling pretty good about these three properties and am looking forward to the learning process unique to each property. I'm not much of a fix and flipper at heart and was looking for alternative property niches. I'll be happy to update the post as things progress and welcome any feedback or questions.