All Forum Posts by: Ian McKeown

My question is why partner with the contractor.  Do you need the money?  Will you make more money if you partner?  Does partnering reduce your risk?  Does it reduce your costs?

1)  You can do your own deals with debt and equity now.  Is it cheaper to use the contractor's money than your current debt or equity?  His financials and credit could increase these costs.

2)  You have risk in your current arrangement where the contractor could be over-charing for materials and labor or have partnership and side deals with the subs you don't know about.  Partnering with the contractor without understanding these details will put you at greater risk.

3)  Do you get a better deal by eliminating cost-plus, general conditions, supervision and change order fees from your current arrangement?

4)  Will you get a higher price for the house?  Will the house sell faster?

It seems like this only works if he's putting in sweat equity now to help your cash flow.  I'm guessing you don't want him controlling the money side of YOUR deal?  You're probably getting the best he has to offer in #2 and should spend some time there making sure you know where all those pennies are currently going.

I have a team in Raleigh/Durham and will be expanding to Charlotte.  Who did you use for land planning, survey, structural, architect and contractor?

I did a Durham deal with Bank of Ozarks.  They have a Charlotte office and can help.  Reach out if you want to connect.

Why would they hire you when they can hire a broker and pay a commission?

Even if you buy for future value; you still have to discount back for your hold period and your profit.  That's net present value.  Keep doing what you're doing.  No deal is better than a bad deal.

Welcome to Orlando.  Feel free to reach out if you need any help.

Get control of the property first with a contract and deposit.  Don't close until you get site plan approval.  The City is the toughest part of this deal and you have them as seller and approver of your plans.  The City may act like it wants to help you but its a big machine at the end of the day.  All approvals will be slow so expect approvals in 9 to 18 months.  First find a local land planner who is well connected to the City; not a land use attorney unless absolutely needed because it's more expensive.  Make a concept plan of what you're project will look like.  You and the planner meet with the City to figure out all the hoops and hurdles to get approved.  If it sounds reasonable, then hire a local, well connected engineer to do your site work.  And then get a local, well connected architect to do your construction plans.  Are you buying with your own money or equity partners?  Figure out a partner operating agreement then talk to banks and equity firms for a construction loan.  Expect the loan to be expensive with personal guarantees if you and your partners aren't experienced.  You'll need a good sales and marketing program for sales and leasing.  You need to be ready for property management when you open.  This will be great when it's done and it cash flows but you have a lot of moving parts to manage before you get there.  

Is it zoned for MHP?  Are utilities in place for the trailers?  Did you pull title to see if there are any issues?  You need to understand all the facts and determine if this is a legal use of the property.  What is around the property and could it be redeveloped to a different use?

I don't understand what you're looking for; can you explain?  What square footage do you want; any tenants that you will or will not accept; what lease terms will you accept; do you require credit tenants and corporate guarantees; what is your going-in, hold period and terminal cap rate target; what are your target demographics (HH $, Crime, MSA, zip code); debt/equity/reserve structure?  These answers will make your search very easy.

Sounds like Charles Parrish is ready to make your loan.