All Forum Posts by: Dustin Beam
Dustin Beam has started 51 posts and replied 607 times.
Post: I hesitate to call this a success story
- Kansas City, MO
- Posts 609
- Votes 321
I guess I'm going to turn this thread into my little diary of sorts.
Anyway, I ended up not cashflowing really anything over 1.5 years. As I said in a previous post, I was steadily rolling the profits into the property to upgrade landscaping, exterior, flooring, etc. This did allow me to make some incremental increases in rent and also took care of quite a bit of deferred maintenance of the old property.
So that's sad news. The good news is that over 1.5 years, I had an IRR of ~115% due to the increase in property value. I then took those gains and did a 1031 to purchase 11 townhouses.
On the one hand, I went down one rental "unit". The good news is they are higher rent 3 bed, 2 bath townhouses with a garage, vs the 2 bed, 2 bath 4 plexes I sold. They are also only about 13 years old instead of 30 something.
I also will get some of the single family home benefits and some of the multifamily benefits. The HOA is defunct, so no fluctuation concerns about HOA fees. They are also all within a stone's throw of each other, so that's a nice convenience bonus. And lastly, I no longer have to pay for water/sewer/trash.
I'm excited to see where this goes! Thanks for reading.
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Matthew Olszak:
@Dustin Beam Who owns it now? Is it functioning, and are taxes being paid on it?
I believe its bank owned, that's about the extent I know.
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Peter MacKercher:
@Dustin Beam Potential uses for your potential clubhouse has become the afternoon darling of office banter here. A few other ideas that some of our team threw out there:
- A daycare (talk about a convenient location for parents)
- A dog daycare
- A virtual golf course (which you could use to open virtual country club and invite your townhouse tenants to).
- A co/shared working space.
Man, daycare sounds like a really good idea. The pool would definitely need filled in taht scenario, but I would imagine the interior build out would be minimal. Nice idea!
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Matt K.:
Originally posted by @Dustin Beam:
Originally posted by @Thomas S.:
Storage units.
Fill in the pool to eliminate liability and maintenance.
I have considered those as well. I'm not sure what maintenance costs and insurance costs are for having a club pool are.
I love the idea of storage, but not real sure the building will be conducive for that. It's a worthwhile thought tho.
The building will work as a front office to receive packages (think UPS type store, but pretty sure most UPS stores don't do well)......... and then since you filled in the pool and you can create the storage facility.
That's a possibility, although my concern would be too much building and not enough pool to add storage units. Lemme see if I can post a pic...
https://i.imgur.com/usHelll.jpg
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Peter MacKercher:
@Dustin Beam There's a lot of information missing here, and the biggest potential issue/expense is the pool.
Pools are great if you use them. I have one at my house and it's nice, certainly. It also takes time and effort to keep up with...
So, is the pool being maintained? Does it have water in it? If not the pool may not even work, and over time pools can raise if they're left empty as groundwater runs under them and the fluid tension pushes them up. Expensive thing to fix. You can fill it in, too, and turn the area into a large patio, as an alternative.
The next question I'd have is zoning. Is the property commercial, residential, what would be the local process you'd have to go through to get it zoned for whatever your goal is?
Then the clubhouse itself -- does it have ample parking? Is there a commercial kitchen? What other features does it have?
There's a ton of things you can do with the property, depending on what your answers above are. You could open it up as event space for weddings, birthdays, etc. If the property is attractive that may be a good option; it's certainly a big market here in St. Louis. Having a kitchen on-site would be a big help there.
You could open it as a private clubhouse and pool. I'm guessing you'd be able to staff a lifeguard from some local company for a low hourly rate. The resistance to this is that, clearly, as the HOA is already defunct, the neighborhood decided they don't need those amenities. How is the local economy? Is the neighborhood itself desirable and attracting people with disposable income who'd continue to pay for the amenity if you moved forward?
If you're buying multiple townhouses in the neighborhood then you clearly believe the area is worthwhile, and having that piece of property near the entrance offers an extra bit of control that's rare to have. Depending on what your decision is you may expect some pushback if it's commercial from the nearest neighbors, who'd potentially complain that the venture would diminish property value.
I feel like I've been rambling a bit but the opportunity is intriguing. Follow up with more details, if you can!
Hi Peter, thank you for the reply. You bring up some good points, I'll try to address them in order. But the big thing to keep in mind, is that I really don't know much except what I've seen from the outside. I'm just trying to determine if I should even inquire further at this point.
Pool maintained: Not sure. It has a cover on it now, so it makes me think water is in it, but do not know.
Zoning: Also do not know. I would assume it's commercial as I don't know how it would be considered residential.
Clubhouse features: Not sure about kitchen. I assume not since I don't see any exhaust fans on roof for a hood. Not a guarantee tho, could have a residential kitchen. Parking is about 20-25 vehicles max.
Area: If you're familiar w/ KC, it's not terribly far from the Legends shopping center, Kansas Speedway, etc. So in a more desirable area of KC, KS. Solid school district. The rents are rigth around $1200 for 3/2 (what a lot of these townhouses are), so a good solid area. We'll find out soon how "in demand" they are! :)
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Thomas S.:
Storage units.
Fill in the pool to eliminate liability and maintenance.
I have considered those as well. I'm not sure what maintenance costs and insurance costs are for having a club pool are.
I love the idea of storage, but not real sure the building will be conducive for that. It's a worthwhile thought tho.
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Kim Meredith Hampton:
Originally posted by @Kim Meredith Hampton:
Dustin,
I never heard of that happening , except with golf courses, which they usually sell and develop into more homes.
Could rent out for special events, make a large house to rent with the pool, rent out so someone for their office-depends on zoning? Whatever you do, make sure that you have good insurance
People also love the Amazon boxes where they deliver their boxes and they can pick them up where they are locked up after they get off of work. They love shared working areas or a small conference room to meet clients.
I've actually never heard of the lock boxes for Amazon, I'll definitely look into that. Nice idea!
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
For the record, I posted it in this forum because some of you have large apartment complexes and know what people want (and what they're willing to pay for). And even though I only have a piece of this subdivision pie, it does have a lot of similarities to a complex since almost everyone is a renter.
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Originally posted by @Kim Meredith Hampton:
Dustin,
I never heard of that happening , except with golf courses, which they usually sell and develop into more homes.
Could rent out for special events, make a large house to rent with the pool, rent out so someone for their office-depends on zoning? Whatever you do, make sure that you have good insurance
Thank you. And I agree, there are some options, just not real sure what would make sense. I've brainstormed briefly and thought about event space too or perhaps a small gym with maybe a couple tanning beds and access to the pool. Something that could draw customers from the entire subdivision. Laundry would be the obvious choice except these townhouses have washer/dryer hookup.
Post: Clubhouse and Pool, what to do w/ it?
- Kansas City, MO
- Posts 609
- Votes 321
Hello beautiful people of BP,
I'm set to close on some townhouses this Friday. These townhouses, and many more, are no longer part of an HOA. It has since become defunct.
There is a pretty decent clubhouse at the entrance of the subdivision that is vacant and apparently for sale. My realtor is looking into the price. I'd have to get it for a song before I'd consider it, most likely.
If I were to assume it could be had for a good price, what could I do with it, if anything? I know there's liability with the pool too. Any thoughts are appreciated!
For background, there are approximately 110 addresses, so maybe 200-250 people in the subdivision. The clubhouse is about 2500 sqft on main floor, not sure about walk-out basement to pool....probably around the same.