All Forum Posts by: Brandon T.

@Tony Stephenson I just created a generic post. Still have it if you'd like me to send it over.

Hey Tony,

I did that a few months back, posted under "Housing Wanted". Ran the ad daily for a few weeks without a single response. At the same time I was running an ad for cash buyers, which got an insane response, 20% of which was from wholesalers looking to co-wholesale or pick up deals from me.

Good luck, hope that helps!

It looks like you already have some solid info here but I'll throw in some additional thoughts/experience that may help with your decision: 

I've never rented to a restaurant but I have about 8 years of experience with bars/restaurants and I rent to other types of businesses that I perceive as lower risk. My intro to business was a casual fine dining restaurant that we eventually expanded into a high end night club and music venue. We shared a wall with a retail store and a wall with higher end apartments. 

We had a liquor license from the beginning. We also hosted a happy hour and had a gentleman who's a bit of a local celebrity play a grand piano while folks mingled, and the business closed at 10pm. This went on for about a year without a single complaint from tenants next door. Many of the tenants became regular guests. 

Once we expanded to a nightclub with a DJ we began closing at 2am, at that point we'd receive a complaint from a tenant about the loud vibrating bass maybe once every other week, but the folks complaining were regulars in the business and thought it was worth one or too loud nights for the advantages of living next door to a trendy restaurant/bar/club. The music venue portion of the business was underground so we didn't get any complaints at all from that.

As long as the business knows how to control their guests there should be few issues from having a liquor license. 

With that being said, I don't think you mentioned the hours of operation or type of restaurant it is, but that would affect the impact a liquor license would have on sales as well. 

A small neighborhood restaurant, open for lunch and dinner, that adds a bar might see a bump in profit but probably not anything substantial. If he's planning to extend business hours as well then that could be a different story. Our liquor sales for lunch and dinner during the week were minimal, and on a weekend rarely exceeded 3k-5k unless there was a corporate function or special event. But after 10pm, with entertainment, we could easily beat those numbers at just one of the 4 bars, and again off of a cover charge. 

You may also want to consider if he's had a liquor license in the past or his knowledge of that industry. A liquor license isn't a magic bullet for a break even business, plenty of liquor serving establishments fail every year.

Also, I'm not sure if you have other commercial properties where the businesses do well and this one is just cursed, but if you've had 10 businesses go under in that building you may want to consider tweeking the screening process. After having a tenant business fail in one of our properties early on we started requiring a business plan and a resume from prospective tenants to help us predict whether they'd be successful or not. 

If I were making the same decision as you, especially with a business as high risk as a restaurant, I'd reach out to someone like @Joel Owens who seems to have a lot of experience or someone with experience in a similar type of restaurant and ask for predictors of success/failure in that particular industry. Find out what they would look for in a business that they were considering investing in, then see if your tenant makes the cut. 

Asking that tenant to submit some sort of business plan to you for the expansion as well as a P&L and basic projections would seem mandatory as well.

Good luck, hope that helps!

@Jennifer Jesse

Interesting, I'm actually in the process of doing something similar as well. 

That sounds great, I'd love to get your thoughts on that area and share strategies. I'll send you a message.

@Jennifer Jesse

Interesting, have you invested in Chesterfield before? 

I've heard there are some good deals over there but I don't know anyone invested in that area. Would you look close to the mall or hospitals?

I like the Glen Allen area a lot, things seem to rent out very quickly there but it's getting more difficult to find good deals. Lately I've been buying in the Lakeside/Dumbarton area, I'm actually in the process of closing on a flip over there right now. The west end of Henrico is great as well. Also I just recently started investing in buy and holds in the east end of Henrico. My price ranges generally work off of cash flow, but I normally look in the 60-80k range, put 5-10k into a renovation for an ARV in the neighborhood of 110k, and cash out re-fi to get most of my initial investment back. Usually that still allows for 400/month post mortgage/tax cash flow, which is the minimum that I invest for.

I'm interested in finding some lower priced properties though, to make the dollars stretch a bit further, which is what brought me here. I also just recently became interested in multi-family as well, so I'm hoping to meet some folks on here who have done that in Richmond before.

@Jennifer Jesse

Hey Jennifer, thanks for the info, I'll give her a shout tomorrow! I actually just spoke with Todd yesterday, so I'm glad to hear you would recommend him. 

It's great to meet another investor in the area. What areas and price ranges do you normally like to invest in?

@Jon Deavers

I would love to get your recommendation on a good Richmond broker. That makes a lot of sense about not shopping for interest rates, I didn't realize they would be that close together. One thing I have noticed that I'd like to ask around on is seasoning periods for refi's. I recently closed on 2 houses and a cash out refi with one lender and he was requiring me to wait 12 months to refi the 2 new properties, I just spoke with another lender yesterday who said he could do it after 6. That's a pretty big deal for me as I like to buy houses for good prices, fix them up, and then refi to pull out funds to buy/renovate more properties. 

I'd like to speak with your attorney as well, if you wouldn't mind putting me in touch. I'm in the market for a good asset protection attorney as well as a litigation attorney at the moment. 

Also, do you specialize in investment properties as well from a real estate agent stand point, or do you primarily focus on owner/occupants? I feel like I've heard your name mentioned before in reference to investment properties.

@Elizabeth O.

I've been looking at a few property management companies in the area actually, does yours cover properties in the Richmond, Henrico, Glen Allen area?

@Bob Couture

Thanks for the input! I'll keep focusing on networking like you suggested and I'll check out the podcast you recommended tonight. 

Hey guys,

I'm not super new to real estate investing, but I am new to BP.  I spent a few years in the restaurant industry as well as other small business ventures while dabbling in real estate, but have just started getting serious about it. I'm focusing primarily on increasing my portfolio of cash flow properties.  I'm currently a Personal Trainer and Sports Nutrition Specialist, but have just recently started flipping houses, as well as building a fitness boot camp and diet coaching business, to generate additional cash to put into buying more properties. 

I'm curious as to how you guys:

1. Find agents to work with that have investment experience and are knowledgeable about the best areas for investing in various price ranges, or if you rely on wholesalers, direct mail marketing, etc. I'm investing in Richmond, Va and have heard there are great properties around in the $30k- $50k's and I'm trying to figure out how to find them. Also, if you have any recommendations I'm all ears!

2. Find the best rates for mortgages. I've been searching for a mortgage broker in Richmond, Va and can only seem to find individual lenders. Do you guys just make a list of all the lenders you can find and call everyone on it? Are some lenders better with "creative financing" than others? Again, if there are any recommendations I'm wide open!

3. My previous properties were purchased either with cash, or through business loans prior to all the mortgage changes, so making offers and closing under an LLC was not a big deal. Now that I'm using mortgage lenders everyone is telling me that I have to close in my own name and then transfer title to an LLC or land trust, unless I get a commercial loan with higher interest rates. Does anyone have a workaround for this, or do we as investors just have to make a choice now between anonymity/privacy and better interest rates?

This is my first post, so please forgive me if I posted in the wrong area or if these questions have been addressed elsewhere. I've spent quite a few hours on here searching and didn't come across exactly what I was looking for but I'm still learning how to use the site.