All Forum Posts by: Brett Radi

Is it a historic building? Guessing it is since the city gave you a rehab grant.  I would contact the local news station and have them do a story on how you are revitalizing the building and you have visions of a restaurant or brew pub going into that space and sell the vision and the dream.  People will come out of the woodwork.  Also if you have good road front visibility, a sign stating restaurant/brew pub space for lease.  Up to you how much TI and all of that you are willing to do to actually make it a restaurant.  Also, might try reaching out to regional chains pitching the space to them as you would a bank. I.E. traffic count/pedestrian activity, proximity to maybe colleges, business, places that draw a lot of people(stadiums, concert venues), uniqueness of the building or what makes it special or some place they would want to have a restaurant.  Just a one page sheet highlighting these things.  

You very well may be biting off more than you can chew, but will give you some ideas to think about and explore more on your own.  

-Like Cason said, 504 loan if you can manage to have your wife occupy 51%.  Should be about 10% down but keep in mind that the closing time frame can be quite a bit longer

-Owner finance the entire purchase

-Owner finance the down payment and bank finance the other 70% or so

-Equity partner

-HELOC for downpayment

-Cashout refinance your home

-401k loan 

-Borrow money from family and/or friends

-Sell everything you own and tell your wife you guys are moving into a crappy old building and going to fix it up.

-Purchase the building and then do the work a little at a time as you can afford to complete things

That should be more than enough to get the thoughts and ideas running on how to make it happen.  

Piggybacking off of Brian-Zoning and is there fire suppression in place and if not will it be required if you do convert it?  Self storage isnt my thing but it seems to be really popular right now, maybe I should look into it more but it doesnt do anything for me.  

My thoughts are, if you have 70% occupancy for storage, are the other tenants for whatever purpose going to be bothered by the random comings and goings of people hauling things in or taking things away?  Maybe you have the ability to keep it very separate and not conflicting, but without seeing it or knowing your market, can only give you things to think about that you might not have considered.  

Do find out about fire suppression though, that could be an unexpected $250k on a $300k building.

 I just got a conventional for 5% down last year.

FHA 3.5% down, VA 0% down, conventional 5% down. All for homes you intend to occupy. So for the first step, talk to a lender and see what you qualify for and/or capable of purchasing. Second step, find a property. I prefer value add where you could do a little work or have someone else do a little work and increase the value of the property/amount of rent you can get on said property.

Or I could have read Joe's response before posting, insert laughing smiley face here--->

Umbrella policy for a million is something like $200 a year, filing for an LLC can be just as much and then the lawyers will try to pierce that in court if you used company money for groceries or you didnt have notes on an annual meeting or whatever. Your first few properties, dont over think that part, get an umbrella policy and by the time you have enough assets to worry about it, you will have lawyers and accountants putting those things in place for you.

First off, it is in a bad part of town.  Second, in commercial you would get the T-12 during your due diligence and not before it was under contract.  If they cant provide you with this, they are lying about the numbers or are so incompetent that I wouldnt want to deal with them and would walk away.  I would be asking for proof of deposits for the $1200 and a K1 from last year.  I would also tell you that the vacant part rents for $0 because there isnt anyone in there.  If you can realistically predict yourself the rent then so be it, but until it is actually rented then you could make up any number you want as the seller.  

This is only a good deal if you can prove the $1200 a month is real and being paid and will continue to do so and there arent any major capital expenditures looming.  My gut tells me to walk away from this but I only have the paragraph of info you posted.

Purchase price $275k + rehab $160k = $435k which is greater than ARV $370k, that would be the first thing you are missing.

Access to the MLS is overrated. You can get almost as much info from realtor.com or other sites as you can from the MLS. The only thing you can see is the agent notes and more than half of the agents out there are too inept to put anything useful in those notes.

I am a licensed agent and enjoy the business.  Like others have said, it is difficult to make any money starting out and you have to spend a lot of time to generate little money to begin with.  On the other hand, you do learn a lot and you save money on your own deals so if you are going to buy one house, it is worth it.  Real estate school doesnt teach you anything worth while though, so dont expect to be a better investor or be competent in transactions just by going through the classes.  Also, with this covid thing, you should be able to do the classes online on your own time, so that should help out.  Depending on your state as well, college may also count toward getting your license.  You will just have to look into your specific rules.

Thank you for your service to our country.  I would target being in the black year one but you dont really have to.  I dont know what rents are there, but let's say it would cost you guys $2k a month to have a place to live.  If you found a whatever plex that offset that number to say, $1200 a month then you are essentially cash flowing $800 a month.  The more you offset of your own expenses, the better off you are.  

Side note, you wont be able to use your VA loan every purchase. That is a finite thing, however FHA loans and conventional loans are so cheap that once you get a little equity, you could refi out of the VA and then get into something else using the 0 down or pull some cash out to use on your next deal. Also, you have to "intend" to occupy the residence to get the VA or FHA loans, otherwise you are looking at investment loans and those down payments shoot up to 20% or so.