All Forum Posts by: Canesha Edwards

Well a little background Information. My team has 7.6 acres under contract in a suburb of Atlanta,Ga. Currently, there are 4 homes on the property. However, after putting the land under contract, I discovered that the property would have to be rezoned due to a future land use code the county recently designated for the parcels. I know, mistake number one. I say this because given the extra expenses needed to rezone the property, our contract price is too high. I have some preliminary cost numbers for the rezoning process to renegotiate the price with the owners and a firm that is going to handle the rezoning. We have funding lined up for the construction, contingent upon the county approving our plans.

This would be a low intensity retail development. So, one anchor and 5-7 smaller stores. (This is based on discussions with the zoning department about what they want to see in that area)

originally, I was going to try and wholesale the property to a builder/developer, but I think I want to try and get the deal done with my team or at least JV the deal. I know this isn't the traditional way to get started in investing, but I want to try and figure this out.

Here are my questions

1. How do I determine market rents for commercial properties?

2. How do I go about finding my tenants? ( I’ve been emailing real estate managers for businesses but this strategy doesn’t seem to be working)

3. From an underwriting perspective, what are factors I need to consider when doing my analysis ? I’ve only performed analysis on residential properties.

4. Any words of wisdom, best practices, etc.

Thank in advance for any and all response.

Hello everyone,

Well a little background Information. My team has 7.6 acres under contract in a suburb of Atlanta,Ga. Currently, there are 4 homes on the property. However, after putting the land under contract, I discovered that the property would have to be rezoned due to a future land use code the county recently designated for the parcels. I know, mistake number one. I say this because given the extra expenses needed to rezone the property, our contract price is too high. I have some preliminary cost numbers for the rezoning process to renegotiate the price with the owners and a firm that is going to handle the rezoning. We have funding lined up for the construction, contingent upon the county approving our plans.

The development would be a low intensity commercial project. One anchor store, and 5-7 smaller stores. Now I’ve never done a retail development or any sizable development period. So, how would I go about underwriting the deal? How do I find anchor stores, tenants? I’ve just been calling real estate managers for big box stores to see if there looking for additional locations. How do I determine market rents for commercial properties?

I know this probably isn’t the typical first investment, and my team has made a lot of mistakes but, I feel this is a good deal if I can get the Price renegotiated, and I want to get the deal done.

Thank you in advance for any and all input.

@Allyssa Mccleery

Here’s another article that provides a more detailed explanation but in simple terms.

https://www.nar.realtor/taxes/background-qualified-opportunity-zones

I have been reading up on the legislation. I believe there are a few specific sections that have to be ironed out but here is what I understand from what I have read: 

The government has created basically a tax shelter in the form of these QOZs as a way to spur investment in poor/low income areas.  Here's a break down of the tax break. 

Example: You sell your business for a profit of $900,000.  You then can invest the capital gains into a QOZ and receive a tax break of 5, 10, or 15%.  Taxes can be deferred until the property is sold or until 12/31/2026.   Now, I've also read in articles that once the property is sold there will not be any taxes on the appreciated value.  For example, if the property appreciated by $100,000 then there will not be any taxes on this money either. ( I'm pretty sure this is the piece that is still being ironed out lol). 

Also, I'm almost 99% percent sure the capital gains can come from any source ( sell of stock, Vegas winnings, etc). 

I have also pasted this interactive link below.  You can use the link to search if your property is in a QOZ. Any property located in a "blue" shaded area is located in a designated QOZ. 

https://www.cims.cdfifund.gov/preparation/?config=...  

I hope this helps. Feel free to PM me if you have any further questions. 

@Marc Webster

Hey Marc,

Have you looked into Qualified Opportunity Zones? This might be a good way to put your equity to use while receiving a tax break. All the wrinkles haven’t been ironed out yet, I think it’s something worth looking into.

@Jillian Sidoti

I’m familiar with one of the funds on your list. For what I’m currently trying to do, I don’t think I would need Form A. But I would be interested in discussing the process further, if you have time.

@Jay Hinrichs

Thanks for this nugget. Reg A would indeed be over kill for what I’m trying to do.

@Dugan Kelley Great insight. I need to look more into Form D and the Exemptions. Thank you for the help.

@Mauricio Rauld

Great! Thanks for clearing this up for me, it was very helpful.

@John Fortes

Great advice. I’m trying to get as much knowledge on the topic. Any best practices or book recommendations for a newbie?