All Forum Posts by: Lance Miller

I have an opportunity to partner with a custom home builder in Idaho. I met with him to go over some details and it left me with some questions. 

I came in thinking I would buy the lot cash and this would be my contribution to the deal. I also thought I would be able to receive the buying of the lot commission and selling of the house commission as a licensed agent in ID.

First, the lots are not listed, so no commission on the buy. Price is 270K for 1 acre lot.  Also, builder signed an agreement with the developer that only allows developer's hand picked agent to sell the home when complete.

During the meeting I asked about recourse and deal structure and I have read some things on here and other places that there are tons of ways to structure this. 

Builder has relationship with Builder's Capital (hard money construction loans), BUT they will be taking first position lien on the land, and I would have a second position lien. BC loan has no payments throughout the build. 2 points and 10.99 interest from what I know so far.

Construction loan would be around 890K. Land is 270K. Target house list price would be 1.5M.

1. I'm having a hard time understanding that I will put up 270K and it will have a first position lien by BC and I could be wiped out entirely if the build or the market implodes. Is there any way around this? Any scenario where construction loan does not lien the property? Non-hard money loans?  Specialty programs?

2. Split would be 50/50 of net profit on the deal. He said his markup is transparent and has things like 10K superintendent fee. Warranty fee and things like that totaling around 50K. Everything else is at cost. I was willing to do this when I thought I would be receiving buy and sell commission (best case scenario ~53K). Would you still do this deal knowing I have no ability to sell the house? I don't want to be greedy. Just wise with hard earned capital.

3. He has to buy 3 lots. First one is done with an investor. They have no agreement of anything on paper. Freaked me out to hear this! This deal (ours) would be contract and legally sounds. If I do it: LLC with he and I? Should I purchase and title land in LLC? I have read doing JV will create liability for me with anything that can go wrong on build. Construction worker dies on site, I become liable? What is the best structure knowing the setup?

4. Anything I am missing or should be away of that I may have not thought about?

Thanks!!

Can I ask a silly question? Was it a good postcard? Professional copy? Call to action? 3 ways to get of you? And the other 50 things...?

Care to share it so we can praise or critique it? You may have a fabulous list and a horrible post card or the reverse.

Lots of other variables too in post card marketing.

Michael (or any other SF area BPer), if you know of any parking deals in your area. I would love to hear about them.

Alex, what is this empty lot used for now? Is it a surface parking lot by chance?

If so, and he truly want to sell it (not just testing out the waters), please contact me. We have 10+ investors chomping at the bit for Manhattan. You could make money too for being the friend that put the deal together.

Thank you, sir.

Hi Joel, it can be both.

Best deal is to have the operator guarantee you a monthly lease payment. This is the best of the best for both parties. Owner could care less how many cars are parked or what the operator is doing with the empty spaces. The con is your return is fixed accept for yearly CPI increases.

Other set up is you pay operator a management fee. This is riddled with issues. This type of operation must be automated (gate cannot open without a car present and it counts the gate opens and closing). We have seen it all to cheat the system here though. One attendant removed the bolt for gate arm and had his own parking lot all day long!

The lot we personally own and operate are pay by space lots with a solar powered wireless kisosk. Customer pays by the space number and uses a credit card. We have a tow company police the lot daily and they will randomly check if occupied spots are paid for. They get paid spots by swiping a key fob next to the kiosk. We live close enough to these lots to check them weekly, but nothing more than that. Pretty easy.

Karen, we found a niche we love so it makes it fun and easy. We use guerrilla marketing to find unlisted parking lot, garages, and investors (our biggest compliment to date is a Cease and Desist letter from the University of Notre Dame for having cars flyered at a football game (that one is framed!).

Once we find good parking investment deals (passes the smell test and we verify the numbers), we pitch it to our top investors who have signed up to get our alerts. It's not complicated and it works.

What's good in the OC? I found a very interesting deal in San Clemente that someone with your builder/investor background would be perfect. Let me know if you are interested and I can send you a PM about it.

...and Bill is right about insurance, it can be nightmare. Luckily, we have that base covered too - another niche market for me. I write parking lot and parking garage insurance. It just works!

Jennifer, is your investor looking to buy individual spaces or entire lots? If it's the latter, they are onto something and you should be able to find something to help them make a nice return. We do it all the time. Good luck.

Lol. NOW it shows up!

I cant figure out how to get my signature to look pro? Found the signature tab, but it does not display all the things I have checked. Any ideas?