All Forum Posts by: Jeff Kehl

@Mary F. floyd have you tried just getting a standard Home Equity Line of Credit on it? Banks are pushing those now so fees and rates are low. Do you have equity or are you trying to get a loan based on the STR profits?

Another thing you could do, depending on how much of a loan you're talking about and your credit rating is to do peer-to-peer lending like prosper.com or lendingclub.com.

@Jessica Zolotorofe I have two physicians and a prosthetics clinic as tenants currently and several empty medical offices I'm trying to lease. All acquired in the last 2 years so I'm new to it but happy to help if I can.

@Chris Grenzig There are only so many alternatives in flooring. In my 20-unit we used wood-look vinyl plank and it looks great, easy to maintain and very durable. If you're looking to spend more, there's always wood-look ceramic tile which a lot of restaurants and hotels are using these days.

If it's not a large area and you have a healthy budget, there's always oak.

@Patrick Philip opportunistic and value-add commercial absolutely exists. My point was just you won't find it here in the forums. The only way to find it is with the brokers and syndicators in those individual markets. And it will vary greatly by market.

For instance Medical office is highly sought after in some areas. In my area I'm having trouble giving it away because there is too much supply.

I'll give you a good example from a webinar I listened to today. There is a hospitality company that has a lot of experience operating Marriott and Hilton properties. They developed a Marriott residence inn in downtown Memphis in 2004 and have operated it since then. They have sold and bought it twice since then and are offering it to investors again.

They have a great value-add strategy and it's in a great location in a town that I think will see a lot of growth going forward.

So while I won't sit here and tell you just go invest in hotels everywhere I think that particular one is a great opportunity mainly because of the sponsors and location.

If you're looking for people to tell you their favorite area to look, mine is retail strip centers. I think there are great deals out there because of the 'retail apocalypse' theme in the media that ignores the subtlety that physical sales are still necessary in a lot of cases.

But that does not help you much because you need to do a lot of work in that area to find good investments because many of them are terrible and will go dark/declare bankruptcy.

@Patrick Philip I think the point they're trying to make is that what you're asking for doesn't easily exist and if it did no one would tell you about it in an online forum. The fact that you would ask makes me wonder about you.

What were you hoping to hear? If you search for industrial warehouses between 20-30k square feet in small towns near a major metro with 2%+ job growth and you can pay less than $120/square foot you will become rich?

No one can do that except maybe a very experienced local broker which is what they advised you to look for.

@Mike McGee I have a lot of multi-family and have bought some office in the last few years to diversify a bit. First off, I would say that if they're exactly the same price the multi-family is a much better investment. The reason I got into the office is because there is no reasonably priced apartments around but I got excellent prices on the office properties. 

Just look at average cap rates and you'll see what I mean. Office just costs less than MF right now and there are opportunities to pick them up at very good prices.

Generally I think it's probably always this way but there are some big secular changes going on in the office market right now. 

Less people work in offices these days because of technology and they tend to need less space. Even people that maintain offices tend to have a lot of people work from home and use offices just as needed.  

Just read up on Wework and other co-working spaces to get a feel. 

Having said all that, I do think office space can be a good investment if you get a good price and it's in a good location.

Certain businesses will probably always need a professional setting that is not their home to meet with clients. Medical is a good example as is Real Estate ( I just leased some space to a real estate brokerage).

Once you get office leased it is much nicer than MF. Less turnover, expenses and overall hassle.

@Tony Xu most small, local commercial banks or credit unions would be happy to do a loan like that if the deal makes sense. Draw a circle about 20 miles in diameter from the property on google maps and search all banks and credit unions in that area. Call them and ask to talk to their commercial lending department. Present the deal to them and if it's a good deal you will likely have several competing for the loan.

If you don't want to do that work, look for commercial loan brokers and have them do the work.

@Matt M. I find myself thinking through similar things on properties I own. Generally, you will make much more money by selling a single unit to a first-time homeowner using some type of government financing. The downside is, it takes longer and they want every little thing fixed. I recently had a buyer ask me to 'inspect the air ducts to see i they needed cleaning' for instance. 

This is a bit of a personal question. If you can put up with the BS of selling to a first-time retail seller than you should absolutely do that because it is more profit.

If you can get a great deal on the other side, do so but not with the intent to put them together because that will make them worth less not more.

By the way, why sell at all? Seems like a smoking deal if you paid $37k and rent for $1205/month. If you need cash to expand just keep it and borrow some money on it. Just don't get greedy an borrow to much. Make sure the rents easily cover the debt service.

@Wendy Carpenter I have a couple of loans that require some type of quarterly reporting like that. i would not sweat it too much. They care more that you are paying the loan on time. But it is a requirement and technically they can foreclose if you don't provide it.

I just provide a current rent roll and/or income statements as suggested above. If they want more, let them ask.

By the way, you should be keeping updated rent roll and income statements for your own use in managing the business even if they don't ask.

If you're at all uncomfortable doing that yourself you really should get an accountant and bookkeeper.

@Michaela G. You've intrigued me... I was trying to think of a place in Atlanta where there might be a 4 unit retail property that is completely vacant and no nearby comps. The only thing that comes to mind is that it is in the hood somewhere? If that's the case my opinion would be that it's worth less than zero.

Unless of course, the area is up-and-coming and retail is just starting to make a come-back. If that's the case you could do quite well but it seems like something best left to people who are expert in retail.

Maybe try partnering with someone having success with retail somewhere nearby?

I personally am in learning mode on retail. I have a couple small properties and passive investments in larger properties to learn how the business works.