All Forum Posts by: David Kim

Thank you for answering follow up questions. I appreciate it!

Thank you for follow up comments on my questions. This is great!

Originally posted by @Shane Melanson:
         
This is awesome! Thank you for very detailed comments on many questions I had . I will do little for research to digest this great information. Thanks!
I have few more questions in your comments

3. Risks:

Every market is different and a big piece of the puzzle for your development would be zoning, access points, services (deep).

                    - Can you explain access points and services (deep)? I figure access points will be entrance to property, but no clue on services (deep)?

On the scale of difficulty- what you're undertaking is about a 7-8 in difficult in commercial real estate. Only thing harder, would be buying raw land and rezoning and then developing.

                    - Sounds like this will be venture for me if difficulty scale of 7-8. Do you think this is something I can handle my own without relying on developer? or I must get help from developer from beginning to end? I am willing to do my homework and research with spend time, but I would like to know if this is possible or not. 

Thanks!

@JM Payne  : Thank you for your feedback and advice. Apparently, I am new to RE world, and trying to learn here. I can see that what you mean by trend is not good time for adding commercial retail due to many shops closing due to Amazon and other online retail shops. 

Hi, my name is David and I live in Atlanta area.

I would like to purchase a land (around 1 acre) and build a small strip mall (around 10K sqft) using SBA loan. Me and my wife are both dentists (different specialties) and we like to occupy 60% of building with with two dental offices (one for me and another for wife) and lease out remaining spaces for side income. It will be new businesses (dental offices) for both of us. We plan on getting dental practice loans in addition to SBA loan to afford interior & equipment of dental offices. 

For real estate, my budget for land is $500K and construction is $2mil. I have liquid asset, which I can put 10-15% down for building, and collateral for 20-30 % of loan amount.  My understanding is that I this is minimum requirement for SBA loan (7a or 504).

I am new to real estate and I would appreciate comments or input to accomplish this. 

Assuming I found a land listing that I am interested already........

1. How or where can I find good real estate agent who can help me with this?    I spoke to an agent , but he was against my idea of construction of new strip mall due to its cost vs purchase existing.  Also, When I specifically asked about how the compensation is structured for purchase of land, I was told that buyer may have additional charges in addition to commission from the % of sale by seller (since price of land are not usually high) Is this common thing?  

Also, when I see an agent pressuring me to purchase an existing strip mall over purchase land, is that mainly because there is greater commission for agent?  Or buying an land and building an strip mall is bad idea in people in real estate industry? ( I understand that building a strip mall is a lot more involved and time consuming than buy existing one)

2. What are the things that I need to look out for/ things to do prior to make an offer for the land? Specifically, what are the test or survey or initial site layout that would cost me that are needed prior to make an offer? and/or  during due diligence period? and what are estimated cost of these, which will be my out of pocket before SBA loan? Also, it will be good if I can get an idea of total out of pocket expense before SBA loan , not including down payment. 

3. Who is person I want consult for the layout of the strip mall? Do I need layout as part of business plan for SBA loan approval?

4. How do I find good construction company ? Is there website that has lists of companies? Do I need yellow page book?

5. What is average time of building a 10K sqft strip mall ?

6. What are the important steps during construction process of building?  ie. getting permit? how often do I visit construction site?

7. At which point , do I need to consult with lawyer , assuming LLC incorporating is done? ie. prior to lease reaming portion of strip mall?

I am sorry that my questions are not very organized, but I would appreciate if someone can enlighten me with this new venture I want to take.

Any website link or recommendation on reading that are specific to my project will be appreciated as well.

Thank you very much!