All Forum Posts by: John McKee

usually when people talk about doors it's within the apartment community and yes that lingo does matter to those folks.  When analyzing deals it's important metric to figure out some quick math when doing conversions/flips to see the value that can be squeezed out of the deal.  If I could trade in my 16 commercial properties for one 100 door apartment community I probably would.  The demand for housing is still strong and depending on the deal the exit profits can be significant.  

why do a stressful 1031 when you can just pay the tax and invest in private equity at 10-20%.  Your high returns will offset your tax hit in no time.  Small investors now have access to institutional deals!

They are fine tenants.  The only problem I have had is that banks don't like them, so they may not refinance the loan at the end of your term if they know that there is a CBD store occupying your property.  I would check with your banker.

I'm a big fan of debt notes and mortgage note funds. I would steer clear of traditional real estate syndications that promise High rates of return (IRR) and have the risk of capital calls.

I use rent manager.  Great ACH tool to pull money out of tenants account or pay them back.

@Henry Clark.  Exactly!  My guess is you can backfill that with some crops

Princella,

Be careful on buying a TIC. These are a nightmare to unwind because of partner disagreements. Also don't get caught up in the higher cap rate of a dollar store. Like Joel mentioned these buildings can be a piece of junk. Buy the land first and then the tenant. Nothing worse than buying a dollar store in the middle of no where usa and when they fold your lot is worth nothing. Always ask yourself this question: If the tenant leaves how easy is it for me to release this space. I have had large corporations close on me because of changing market conditions. Brands such as Verizon, Dunkin Donuts, Famous Dave's etc, but luckily I could backfill the property within a reasonable amount of time because the location had high traffic counts along with population density.

If you are buying a NN that means you need to watch out for the missing N ! Read the lease carefully to see what costs are NOT covered. For example maybe you need to be responsible for the roof expense. Find out the age of the roof and what it might cost to replace it. This will factor in your calculation of IRR. A lot of brokers list their properties as passive investments with all expenses covered, but the details are in the lease!

I would agree on your assessment.  The money is in value add.  Why would anyone buy real estate at a 5.5 cap is beyond me unless they can boost the value.  Odds are that the value has already been squeezed out of the deal, but maybe you come across a passive landlord that hasn't improved a property or raised the rents in years because he was comfortable.   

If you have under 25K to invest I think it's a good platform.  I like that your money is only tied up 6-24 months depending on the deal earning. 7-9%.  Beats having your money in a CD