All Forum Posts by: Jeff Kehl

@Sandra Holt Yes, they theoretically could pull most of it off Costar. If you're a smaller market like I'm in they have to do some real work like calling up local brokers and owners. Some of the info is 'old boys network' especially in smaller towns so it takes time to get the info sometimes.

@Michael Lipsey if you don't have any properties yet, I'd say you don't need an attorney yet. I know many people will tell you to 'build your team'. But you really don't need one to buy a few properties.

But, a great attorney is worth their weight in gold. So I would second the recommendation to talk to some at real estate events, they may turn you on to great properties. Also look for referrals from real estate agents or brokers.

I use 3-4 attorneys for different things and all of them came along the way from me watching how they conducted business or referrals from other professionals. I never said 'I need to find a real estate attorney'' specifically.

@Patrick Philip as others have said, rehab the vacant units and list them at market rents. In the mean-time, for any unit that the lease is up, raise their rent to whatever the market rent/your goal rent is. Most of them will move. If not, you just got the financial prize without the investment so keep them as long as you can.

@Account Closed Given the recent Amazon announcement, if you could buy anything in the Arlington county market what would you buy and why?

@Sandra Holt a couple of suggestions from someone also new to commercial from residential.

1) Are you going to do a phase 1 environmental? Lender may or may or not require it. If you don't know the history of the property I think it's a great idea/money well spent. I also found it a fascinating read to see the history and what was going on in nearby parcels.

2) Whether you do it yourself or hire someone to do it, I think a study of office supply/demand in the area is worthwhile so you know how easy or hard it will be to lease those two empty spaces and how aggressive you should be on pricing them. 

@Neal Bawa I would sum this up by saying 'buyers be crazy'. Cap rate should be exactly correlated to interest rates assuming supply and demand are held constant.  That is not true in today's market. Demand has risen by a huge amount because everyone is convinced that multi-family is a bulletproof asset.

If interest rates rise but their is more demand/competition for the properties cap rate could remain the same or even drop. Too many buyers and possibly even too many inexperienced buyers.

Also, not to ignore the supply side, despite a lot of construction, there is still a shortage of new construction in many areas.

One final contributing factor I would site is the increasing use of multiple years of IO (Interest Only). That makes deals work at a lower cap rate even though the interest rates rise. 

@Richard Lovering I would disagree with some of the prior advice. People that tell you it doesn't matter are probably people that don't carry a lot of short-term cash. You can keep your 'reserves' as credit lines but most of those can be pulled at any time so it is a good idea to keep a lot of that liquid. 

And more to the point of your question, if you're holding a large amount of funds liquid for awhile in anticipation of investing it where to keep it?

Yes, if it's just $100k and you're talking 1% or $1000 why waste the brain cells? 

But what if its $500k or $5 million? I guarantee you that is worth worrying about. If you look at companies carrying a lot of cash on their balance sheet, there are people in the finance department that have that as their only job. So, yes, worry about it.

Where to put it? Money Market Accounts, Online savings accounts, CDs, Treasury Bills, Municipal Bonds, Short-term Corporate Bonds. All depending on your risk tolerance.

@Antonio Porta we can't help much with this because it's a very local thing. But generally, just google 'banks in Your County' and call the ones that aren't household names and ask to speak to someone in commercial lending. Tell them in general terms what type of loan you are looking for and ask if they do those type of loans. If so, ask to set an appointment to talk in more detail and present the deal at that meeting.

Also do the same with credit unions.

@Patrick Philip I also have no experience with hotels other than to have gotten fairly close to buying one at auction... In my research though I found that they're a lot like multi-family in some ways and different in others. For instance, you can own the real estate and manage yourself or you can own the real estate and hire someone else to manage it. Also, you can buy a small, non-standard, lower tier property or you can buy something investment grade. And you can combine those categories to gain or lose a lot of money.

For example, I have seen tons of small 10-20 key motels in rural areas for sale that are just obsolete and should probably be bull-dozed. However you maybe could make a living self-managing a small hotel in a beach area.

But to really make them work you need to buy larger, flagged as a major chain  and preferably in a growing area in a major metro area. When you get to that type of property you really have no business managing it yourself unless you have some experience. Check out some of the decent Hilton, Marriott, etc hotels near you. They are probably owned by a large company and managed by a separate large company.

If you want to try out hospitality without a major investment why not try a STR property on AIRBNB? I tried that and learned that I hate the operational side of hospitality.

@Enrique Elizondo I don't expect you could build much on an 8000 sq ft lot regardless of how its zoned. You can find out whats allowed on an industrial zoning by visiting your local planning/building department either online or in person. Generally these days most things that are getting built are warehouses for distribution so you might look at putting together an assemblage of small parcels around it to do that.

Also, another thing for you to look into. I think CA just legalized recreational Marijuana right? That quickly used a lot of Industrial property in Denver when they legalized so you could look into that.

Also, assuming it's listed call the broker and ask them. They have the best ideas and can fill you in on the problems with the property. If it's not listed see if you can find something similar and call that broker.