All Forum Posts by: Joel Owens

Yes you heard me correctly.Targeted mailing with the correct copy will get you outstanding results.

Targeted marketing will always out pull blanket marketing.

Many small companies make the mistake of getting into the branding type of marketing that huge companies with unlimited pockets employ.

Small companies need to be using Gorilla type marketing to get results with small budgets.

The letter costs 1 cent to print,envelope is about 4 cents,postage 43 cents.Mail up to 80 letters a month.

I will be expanding it soon.

Recently because of Obama and bigger government HUD has undergone many changes.

There are now multiple MMR companies handling different parts of the country with their own set of rules.

On an broker/agent forum I frequent the new system is absolute insanity.It's like coming out with a new computer operating system that has 1,000 bugs in it when the old one was streaming along perfectly.

The brokers and agents are having fits with the new system not recognizing their offers,canceling them,showing active when pending,getting assignments when they are already assigned etc.

All I can tell you is these types of items are simply out of the brokers/agents control.HUD does have owner occupied periods but as an investor you can still submit your offer but it won't be considered until after that time.

Just submit it again.

Depends on the type of structure and whether the tenant is a mom and pop or a credit rated tenant.

Certain credit tenants will have corporate guarantees and very little failure risk. If you own a small strip that is mom and pop dominated your vacancy and turnover will be much higher.

If your space is for a credit rated tenant you pay close attention to the renewals in the lease. The seller will base the asking price upon the CURRENT NOI. If the credit tenants lease is up for renewal and they leave or want excessive TI demands to stay then your FUTURE NOI will go way down.

Once a credit tenant leaves the second or third generational space use for that property will more than likely be at a much lower rent per sq ft basis.

If for instance you are looking at a shopping center and asking is based on current leases of 16 to 18sq ft but lease are coming up for renewal.You know lease were signed 4 years ago and that when resigning the tenants will want the prevailing current market rate of 12 sq ft.

You will base offer on the 12sq not the 16 to 18 it is currently generating.You could also insert a clause that the tenants have to re-up before purchasing at the same rate.

Is the property on a triple net lease or is the landlord responsible for all repairs??

If it is an older building and you are responsible to maintain it and pay taxes it could kill your future cash flow.The point that it is priced that low but has been on the market for a year is a bad sign.

If the numbers are solid and the price is low it shouldn't have been on the market that long.

So for almost 6,000 sq ft of space they pay 1,500 a month?? That would be unheard of where I am at but your are is probably different.

Is the property located on a high traffic corner or near one?? You could demo the building and sell the lot to a corporate company for big money.

Walgreens and CVS will pay about 1 million to 1.2 million for a 1.5 to 2 acre corner location.

If you take the gross income of 18,000 and take away expenses of taxes,ongoing repairs,etc. and you self manage you might be at say 10,000 NOI.10 CAP value would be 100,000k on resale.Take away resale costs and there is not much equity upside in this deal at all.

How much is the current rent under market??Anytime you can improve rent and the cash flow you can improve the sale price upon exit.

So you have the land and the building and multiple exit strategies.Again would have to be there and see it to properly evaluate the deal.

Good luck

Mortgage brokers have a break point where loans of a certain size they will actually have to bring money to the table to do the loan.

In my state of Georgia they have laws on costs not going over a certain amount relative to the loan size including attorneys fees,mortgage broker fees,etc.

The cap makes most small loans a no go with mortgage companies.In that instance a local bank or a direct lender who makes the money servicing the loan etc. will be interested.

I have a buyer buying a tri-plex for 52,000.Only a direct lender would do the loan that was keeping in house.

This doesn't add up.Even if the storage space was 1,500 sq ft to convert to an apartment you would have 4,900 sq ft rented for 1,500 a month.

That would only be 3.67 a sq ft. Industrial and Warehouse space can sometimes tread around that or higher for really large shell spaces but what you are talking about sounds way under market for the rent being charged.

I don't know your area so couldn't give a yae or nay on the deal.

One of my friends Brian Rodgers is one of the most best recognized marketers in the world.

He writes tons of copy and marketing for national companies.These so called squeeze pages for the internet and all of that type stuff he was doing in the early 90's.Many are just copying his stuff.

As far as mailers content and getting to the right market is key.Being consistent is also crucial as over time it's like a small ball rolling into a big ball and before you know it you set on auto pilot.

Many make the mistake of sending out a few thousand mailers and then having the wrong message or the wrong audience.They run out of money and poof they are gone.

A much better strategy is to mail to a small group and then track your response.2% is an average response,5% is doing well,8% and above you are killing it!

Your first piece sent out is the control.Everything after that you test and track against the returns of the control.Sometimes people do not respond right away so with each mailers you would need a code for that batch to track.

I do this with my commercial expired mailing campaign.I have spent roughly 40 dollars a month over a year and made 6 figures in commission off of it.I track the number of mailer sent monthly,the number of calls or contact received,number of appointments,number of listings,number of solds,and then track my time into each listing to get a return per hour on my time.

When you break it down to a science you will really see what works and what needs tweaking.Once you have a system down with an excellent response you just grow the volume and the market.

Hope it helps

Usually with a mom and pop you don't want to pay for any TI(tenant improvements). Instead they sign the lease and get free rent for one month while they are getting the property ready to open.

If they don't open on time that is still on them and the rent is due.You also have stated in the lease that improvements made to the shell that are attached stay with the property.

(I am sure evictions are much faster, big plus in Chicago)

What on earth would make you think that??

Commercial tenants can be credit rated tenants with corporate guarantees or the mom and pop type.The mom and pop type carry usually the most risk as a start up.

Franchised stores such as Quizno's or a Subway generally there is less failure as the corporations makes sure the operator meets liquidity and certain training requirements.What usually kills mom and pop type businesses is poor planning and making the same mistakes over and over again.

This is where a franchise is strong in that with their franchise fees the operator gets national and sometimes local marketing.They also get tried and true processes and systems to follow which greatly reduce them screwing up.

With a mom and pop you are going with an unproven startup which if fails has very little to no assets to go after.Sometimes a mom and pop will have multiple locations and be more credible with assets and experience that are less risky tenants.

When taking on a retail tenant that is unknown or not well known ask questions about how they will bring in business and their marketing plans.

Many start ups believe you open up and people will find you and the business will come flooding in.This is absolutely untrue.

I remember Papa Johns pizza back when I was working as a stockboy at Wal-mart as a teenager. That was the early nineties.Nobody had ever heard of Papa John's.They had to go in the area in the parking lot and hand out free pizza with coupons for the next month or two.

Commercial tenants you won't get the call that the toilet is stopped up at night,etc.

Different animal.

I remember watching about radiation and granite counter tops a few years back.

The tops had high levels of radiation which they attributed to what they were using to cut the granite slabs.They had a meter and above a certain reading was dangerous and could make you sick. About 90 percent of the homes tested came in at normal levels but 10 percent had dangerous readings.

I agree that I strongly dislike tiled counter tops.The grout is a pain to clean and it looks like crap.The only reason someone put it there is it is cheaper to buy the tiles.So when I look at a place I go what else did they skimp on??

A regular buyer will think this as well.The biggest sin I see is when a bathroom or kitchen is only half rehabbed.That is worse than doing nothing at all.If you don't have the money to do it right it won't be a benefit to a renter or a potential buyer.

Kitchens and baths sell homes and are not the place to skimp yet many do as it costs the most to fix up.

My friends have had Corian for years and it has held up excellent.It depends on what finish you get as well.They had the upgraded bull nose edging to round out the edges and provide a dramatic effect.

That makes me think about another question.Do you get upgrades for the edging on granite or leave yours plain.I could see in a high end rehab you might need the upgrade finishing.

Here is article on radiation.

http://www.graniteland.com/infos/home/is-granite-radioactive