All Forum Posts by: Account Closed

I have attached a link to the Mortgage Bankers Association 2nd Quarter Data that I think has some very interesting insight on where the market is and some potential ideas as to where is going. 

http://www.ahccapital.com/#!forms-and-downloads/cbe6

Love to hear BP members comments.

A,B,C really is a measure of applicable cap rate.  A Class "A" property will almost always have a lower cap rate than a Class C property. As for quality within those classes, we have developed a rating/inspection matrix that helps us define our investments within what our normal target might be. I have attached a link to this pdf for those that are interested. http://www.ahccapital.com/#!forms-and-downloads/cbe6 

On the matrix portion, there is a number that we have  that reflect what the total number for the matrix is for our investments, yours may differ.The form has a lot more items relating to an inspection but it does give you a good overview of the quality so as you can compare. Feel free to contact me if you have any questions or can't get to the download. ( no sale or self promotion just sharing some helpful info).

Land has many different ways to be valued. Sales comparison is the most common from an appraisal perspective but  i would suggest that you consider the following two strategies in assessing whether it makes sense  as an investment:

1. If the site has an immediate development potential, then the analysis is simple. Value the completed project and subtract all the cost to get there including a development/Entrepreneurial profit.  What you have left over is the residual land value.

2. Speculation land is much harder to value, especially if you are looking to re-zone or get entitlements. Spec land is a stair step investment, in other words the value may stay the same for many years and then skyrocket. It seldom is linear where if you buy it today, next year it goes up 2% and the the next year another 2% and so on. In fact, land may actually drop in value before increasing.

I would heavily not recommend you buying spec land unless you have lots of experience on where the market is going  or are buying for a very long term hold ( greater than 10 years). Keep in mind that taxes and insurance not to mention mortgage interest will all be negative during your hold,

Look into EB 5 visas. You need to invest $500K and there is a requirement to create between 5 and 10 full time jobs depending on the investment and the area. Additionally, Canada has a similar visa program where I believe the investment is around $150K. They have great mountains and skiing there as well.

Wow! Insurance at $16,000. We have property all over the country and we pay 180 to 220 per unit. I would seriously explore this with an insurance agent or property management firm to get this under control. Do you have a heavy claim history?

Call me. I can give you a few ideas on how to go about building a campaign to attract investors and partners.

Had one in the past. ???

Outside of all the great comments above, the simple fact is that a 100% personal guarantee is CASH. If you were to go to a third party lender on this size deal, the loan would have personal guarantees so that inherent in the seller financing is the concept that to sweeten the deal, the seller is providing you an economic advantage hence the higher price.

I would argue to the seller that he is not making a third party loan. he already has the "risk" by owning the property and should a rainy day event occur, he is back to square one plus what ever you have paid to him and towards the property improvements. Lets assume that you buy this deal and one year down the road you default. To collect on the personal guarantee, he would need to foreclose, establish a value, and set a loss to collect on. As a lender/seller he would have a very sensitive issue pursuing a deficit judgement given the current number of cases involving predatory lenders. I am not an attorney, but I have served as expert witness in over a billion dollars worth of default cases. Enforcing a guarantee is not that easy if you are not a bank. Obviously, you would want to go through a judicial foreclosure so as to be able to make your case.

Notwithstanding the above, you could ask for a partial guarantee, say 20%.  in effect the seller would be financing the down payment. But for me, a personal guarantee turns the deal into a cash deal. I would ask the seller to take a price much closer to the all cash offers in exchange for the guarantee or pay a slightly higher rate.  As a point of reference, when we need a guarantee/cosigner. we pay the guarantor 1% to 2% of the guarantee amount annually.

good luck

one last one

Hospitium - Greek god of hospitality

Do not know what segment your hotels are in ( ie. budget, luxury boutique etc) and if you want the brand to represent that in the name or if you operate under national flag or franchise.

I like the following because you can create great logos to go along with the name.

1. Paloma - dove

2. Palomar - horse

3.Palomino - horse

4. Presidio - castle

5.Arlene -Scottish

6. Isla -  island

7. Viking - norse man or ship

8. Nicolas ( my personal favorite - lol )

have fun