All Forum Posts by: Emilio Ramirez

I placed an order for the next recession back in 2016, but Amazon keeps telling me it's on backorder. They'll let me know when it ships... :D

Ok. Sarcasm aside. Have you ever run a hotel before or managed a hotel staff? Without that experience it would be extremely stressful to jump into a 50-100 unit hotel. How many housekeepers do you need to accommodate guests? What is RevPAR and where does yours currently stand? Who's managing that restaurant? The hotel or are you leasing it out? How many maintenance guys are on staff? Is the roof still good? When were the sheets last purchased and when does new furniture need to be purchased? Why are people going to stay at your hotel and not the next one? How many rooms do you need to book to break even? How much do you need to charge? Basically, what's your business plan?

If you can answer all of these questions then maybe you are ready to purchase your first hotel. If not, I would look for a night auditor job on craigslist. Then you will learn how to deal with most aspects and costs of hoteling in a short order. 

Contact the commercial brokers that are listing similar properties on the web. Most of their listings don't make it to the web as they're held as pocket listings. 

I would also find a realtor for the smaller stuff and have them set up an mls search for you. 

Or drive around looking for the ones you like and contact the Owners directly. 

Why such a broad search?

I think I've answered my own question, but figured I'd throw this out to the good people of BP. 

While searching for a MF deal, I came across a (NNN) class a office building, The attractive part to me was that the anchor tenant would sign a 10 year lease as a condition of closing and provide a corporate guarantee. Additionally, they would provide a guaranteed 8 cap on the purchase price.

I haven't pursued the deal much further due to a couple items.

1. The income is based on rent that is top of the market by the anchor tenant. Although, they've indicated that they will negotiate a lower rent  and lower noi to Market rent which is a few bucks lower and thus a lower purchase price.  $31 current -$26 market. 

2. The anchor tenant represents 85% of income. This is my primary concern. The anchor tenant appears to be a strong national company with a corporate guarantee, but I still have a little voice in my head saying that if they go out of business you're toast.  

According to my calcs. Here's a few numbers.

NOI - $335,998

Cash Flow After Debt Service - $104,049

Cap Rate at Purchase - 8.4

Average COC - 17.1%

Debt Coverage 1.44

IRR - 15.79%

I like it because there is decent cash flow from day one, no heavy lifting to reposition the property and (NNN). I would make any offer contingent on a lease agreement executed at closing but even if I got everything I wanted in lease negotiations, I still can't seem to get past item 2 above. Any thoughts? What would make a better 1st office building investment?

have you run the numbers? How does it work as a rental? Cash flowing break even? 

Have no idea what $12/sf equates to in AR but in denver that would be less than a 5% discount. Point is we'd need more info to give any really helpful advice.

Lastly, Would you even consider this house if your friend wasn't the builder?

Post the numbers and folks can give you more accurate feed back.

Is it Section 8, LIHTC or other subsidized development? Why are you restricted to 80% of AMI?

Ultimately depends on your budget. 

Black interior or exterior? Black is a tough color because if you go the vinyl route it is painted and will ultimately scratch. Anderson 100s are a vinyl alternative that are competitively priced that come in black. Best bet is going to be talking to a window vendor. Tell him what you're doing and what your budget is and he will be able to walk you through the best options. 

That being said, even the nicest window will fail if installed incorrectly. 

Bradford White makes a pretty decent electric tanked water heater if you can fit it in the adu. Bonus = no venting required. Pretty cheap to. Not sure about cali's energy code so you'd have to research that. 

you have to check the zoning on the lot first to see if the code allows for a duplex. That being said, I just built a duplex for a lady who owned the lot free and clear. She paid cash for the construction... so that's one way to do it.

A bank is going to have about a 35% Owner equity requirement, depending on your experience. Additionally the loan will be based off of your construction budget plus the cost of the land. Bank will want to see net worth and/or liquid assests equal to the amount of the loan plus reserves in case the project goes over budget.  You're looking for a local bank that does portfolio loans. I would go in and talk to them to get the exact requirements. 

Regarding the schedule, was holiday time discussed? Is it in the contract? If the project started nov 1, you have three huge holidays in there. That can easily result in three lost weeks. It sounds like the contractor is close to finishing other than the extras you refer to. If he is and you consider those holidays I would say he is right on time. 

If you're going to be a flipper you need to educate yourself on the construction process. You need to be able to deduce if the electrical and plumbing changes he's referring to are necessary. You need to know from the beginning if those are part of the scope. Of course with remodels there is always the wildcard factor of what am I going to find once I open the walls. Hard for anyone to know what surprises will be uncovered which is why your budget and your schedule need to accommodate the unknown. 

Lastly, you need to define the scope of work for the contractor, not the other way around. Congrats on your first flip. Hope you are learning alot and that it is a profitable one for you. 

Building your own house is a tremendous learning opportunity...  expect to pay for that knowledge.  I would do it for the education. I wouldn't do it trying to save money. I see homeowners shooting themselves in the foot all the time trying to save a buck. Truth is there is no such thing as cheap construction.  There's expensive construction and really expensive construction. 

I would have your builder on board before you start the plans. I just walked a home with a buddy of mine and the homeowner got the plans designed, engineered and permitted before finding a builder. The engineer is a commercial engineer who is used to designing steel strip malls... well the house was designed like a steel strip mall. The Owner is going to pay $40k in steel for something he could've built in wood for $10-15k. That's only material costs. AND he's losing about a month on his schedule. You don't know what you don't know.

Lastly, in my experience, building to code is a minimum.... kinda like getting a C. Building to code doesn't guarantee building quality and if you're relying on building inspectors to confirm you're subs are building quality, you're in for a rude awakening. 

All that being said, if you stayed out of my way and offered some value on the project (maintaining schedule, daily job logs, taking photos, organizing the yard, coordinating deliveries... played all around errand and gopher boy)... I would consider discounting my fee for that. You want to save money, figure out how you can provide value.