All Forum Posts by: Robert T.

We have bought and sold many properties. Sometimes bought and sold without a broker. More often with a broker. We are about to list some commercial properties and while we have built good relationships with several brokers over the years, wish to seek BP property owner opinions of national chain brokers (e.g. Marcus Millichap or CBRE) versus a local sort of "mum & pop" commercial broker. Each have their strengths and weaknesses, but like to hear any stories or personal experiences. 

We have a 28,000 sf lot and there is a 1,500 sf restuarant building there. 1. A new tenant decided to build a 300 sf patio there and we discovered that they did not apply for a permit. We got the architect involved who then went to get a permit retroactively. He was told by the City that we needed a plat. Found out that there was never a plat, only survey drawings. What is the difference? Cost of a new survey is about $1,000 and a plat $8000 !!! (including fees, tax letters). 2. In the future, we may decide to put a 2,500 sf buildin in the car park of this lot. Does it need a plat for the permitting? I know the answer may come from the City; but we get confusing and conflicting answers from them. The plat is so expensive and thus need BP members input and experience. Thanks! 

We have a 28,000 sf lot and there is a 1,500 sf restuarant building there.

1. A new tenant decided to build a 300 sf patio there and we discovered that they did not apply for a permit. We got the architect involved who then went to get a permit retroactively. He was told by the City that we needed a plat. Found out that there was never a plat, only survey drawings. What is the difference? Cost of a new survey is about $1,000 and a plat $8000 !!! (including fees, tax letters).

2. In the future, we may decide to put a 2,500 sf buildin in the car park of this lot. Does it need a plat for the permitting?

I know the answer may come from the City; but we get confusing and conflicting answers from them. The plat is so expensive and thus need BP members input and experience. Thanks! 

We are building a 2500 sf flat roof retail building on 8200 sf lot. Was told by some architects that besides architectural, we need MEP and structural. Some said you need MEP, structural AND civil.  Some said you don't need any except architectural. Confused, what is the right approach? Obviously, more costs with more people involved. Located in City of Houston. Thanks for any advice!

Originally posted by @Derek Sease:

@Robert T.  I just wrapped up a 7,500 SF multi-tenant commercial retail building and we were required to add a 15" french drain approximately 100 LF -- and it ran us just over $2,000.  As for the professional service fees, those appear to be in line with what our development side pays for the design fees of a project.

 Thanks @Dereak Sease. We have an ALTA survey (for title)- did you all need another survey viz. topo/utility/boundary by architect? Quote  for survey was $2000- is it in line? 

Dear BP RE developers:

We are building a single storey 2 Unit 2250 sf flat roof retail building (unfinished) in Houston on 8200 sf lot on a busy street. 

1. Was told that it is likely that we need to build underground french or storm drains. Anyone with experience on how much this might cost?

2. For professional fees; given estimates of   

Civil- $2,500

Structural- $2,500

MEP- $3,000

Architect-$4000

Are these numbers typical? Thanks for the advice and discussion. 

Hi: Not sure of your question. But we have leased out to several Corporate/Franchise QSR in Texas. You can p.m. Me specific questions if you prefer. Thanks.

What a coincidence! Happening to us right now. In general, there is a market for second generation restaurants as it saves the restauranter a lot of money. The hood, cold room, grease traps etc. is actually worth a lot to a restaurant tenant. In fact, leaving it there may make it easier to find a restaurant tenant and is a draw, and not neccesarily a negative thing. I would leave it. But, you could spend money maybe on the exterior, roof, car park to make it more attractive for a tenant. If you think you have too much space, consider splitting into smaller Units. Problem will be adding the extra bathrooms, electrical and plumbing and looking after those permits.  Never one way to do real estate; a lot depends on luck and who wants it & being there at the right time. We have had clients that took a dumpy old restaurant and turned it into a palace, spending millions of their own money on build up. Good luck!

Originally posted by @Chase Gochnauer:

So, good news and bad news.

Good news. It is the purchase of the land, 8 years left on ground lease by a billion dollar company so that side of things is solid. 8% cap.

Bad news. Ground is contaminated by previous owners/tenants. The only thing needing done is monitoring of 6 wells by a company. I guess they come nearly everyday, check levels, and leave. Aside from that there is nothing else that needs done at this time. But, because of this, it's likely not able to be financed.

 @ChaseGochnauer: Thanks for the update! Most of us here thought there was contamination. It is priced very low for a reason. As investors; we have been in the same situation several years ago. We were looking at a very busy strip mall and was offered at 12% cap, which is high in our area. Looked ok on the outside; but we spent thousands on environmentals (including phase 2), and found PERC as there was a dry cleaner there before. Had to drop the deal and lost money there. The brokers kept pestering us to close the deal, saying that it can be remediated through our state TCEQ program. and the seller even dropped the closing price. Yes, TCEQ has a program but there is a long waiting list. We said goodbye to the deal. Contamination clean ups can cost millions. Having said that, I know some investors still proceed to buy contaminated land, especially if they know what they want to do with it, have a long term plan and need little financing. There is never one way to do real estate deals, and there are many ways to this food chain, but stay away from danger. Risk can reward but ca also destroy. Good luck! 

Just make sure you have good bookkeeping and track the P&L of each company. Also, it will depend on whether your LLC is a C or S corp. If the LLC is organized as a sole owner/partnership and filters down to your personal income tax and not organized as a C corporation, your tax implications will be vastly different. Definitely, talk to your CPA.