All Forum Posts by: Jonathan Orr

@April Molina CUPs generally go with commercial zoning but in a large city like Philly...you never know until you ask.  There may be a older loop hole or something the city did 40 years ago that no one ever changes. Before you go into the planning department to ask.  You may be able to find out via the city ordinance.  I am pretty sure a big city like philly will have all of that online.  You can search your zoning for your property and dig into from there.  If you are still unsure then I would go to the planning department.

Look at the existing leases.  It may be leased right now but if lets say 10 leases expire in a month or 2, then you are put into a situation where you will have to re-lease or potentially find new tenants.  Additionally I would be careful of the condition of the property.  Make sure doing your DD that you get a inspection.  Don't want the property to look nice but if some major repairs are just hanging on and the cost will pass along to you. That is a major expense to watch out for.  Last I would be check on if there is a lot of delinquent payments.  Meaning, is it going to be a pain just to get rent and paid by the tenants.  

Just a few tips I really look at.  there are a lot more but that is just scratching the surface.

 The listing on the back end sounds like an excellent plan.  In terms of specific responsibilities it is a case by case basis.  For one investor I came in after he had purchased the house and already lined up his contractor so I was just there mostly deciding on finishes and keeping budget and timeline.  The next flip I actually found the property for him, did the underwriting and lined up the loan for him. 

I really is a case by case basis, so what I would do is sit down with the investor and create a Agreement that lines it out for that exact property on what you will be responsible for.  Remember you can always build upon that as you go through to the next property or tailor it down.  Additionally in that agreement you can bundle in the listing agreement so that you are protected when the property is finished to get the listing. 

I googled project management agreement and basically started with a template and altered while sitting down with the investor.

Hi @April Molina, happy V day to you as well.  

As a commercial guy, I will say best thing to do is go to the planning department for the city.  Speak with a planner and ask them the same question.  I do not know the specifics of Philly but I will say speaking on behalf of big cities that I have worked with, it can be a hassle and take time.  You will probably need to provide architectural plans and file a application to why you want to alter the zoning. Go in front of council to argue your point and they may make you do studies like traffic or environmental.  

Another option would be to see if the lot you have under its current zoning can get a CUP (conditional use permit) to maybe have a different use.  This is usually still a pain but easier than changing the actual zoning.  A CUP would allow for different uses and lets say you can get a CUP for multiple residences, you then can use that as a marketing plan to developers/builders.

@Brendon Pishny  I have done similar things as a PM for a couple who was very hands off in some flips.  I structured it like I do commercial development deals.  It is a percentage of the cost of the project(normally anywhere between 3-10% depending on size and feasibility of the project) that is broken down in monthly installments in a 80/20 split.  Which means 80% of your fee is given in the monthly installments and 20% is given when the project is finished. 

It really depends on what you want to do and if you see yourself doing a lot of projects for them or if this is a one and done thing.  If it is one and done I would not take a back end.  Take your fee and when the project is completed (when I mean completed I do not mean sold, I mean finished from a construction POV so you are not waiting an extra 30-60 days potentially)  take your money and wish them good luck.  Your responsibility is done at that point.

If this is a thing maybe you do 1 or more every month or 2, I would negotiate a similar deal, but maybe lower the fee percentage and instead take a piece of the back end when it does sell.

Good luck!

@Account Closed All of my commercial development deals are JV deals. I would say a majority of developers and commercial owners JV in some aspect just to minimize risk from a financial standpoint. I use to work for a commercial investor that would pay cash for 30+ million dollar apt complexes then turn around and syndicate it after he closed on it to minimize his risk and maximize his leverage. When people get greedy refusal to share is when bad things happen and can happen fast.

Some very good comments on here on how to add value on here (doing the work, or adding the $$$)

I would be aware of a deal that someone wants to JV and is pressing to get you into it yet hesitates when you want to talk about putting it down on paper. Besides that, it is your own Due diligence that determines the worthiness of the deal

@Ashly Frasso Great to see another LB local on here!

as far as out of state goes, there are so many opportunities out there you just need to narrow down where you want to focus on.  I would recommend looking at an area that is thriving from an economic standpoint and businesses are actively growing.  If you ever want to get together and grab coffee to talk more, let me know.  All of my project are out of state just because CA is too expensive and tough to get done.

Good luck!

@Fe Hendricks Reno is getting tough to find Multifamily due to the growth of the industrial center and the affordable nature of Reno.  It really depends on how much you are looking to spend and if you are wanting smaller properties or larger Class A deals.  I am working on doing a hotel in Reno and it is tough to find development properties in Reno.

@Milo Jocson Yes Tesla and the TRI center is exploding out there.  Just a FYI for ya. The Industrial center is located in Storey county (different than Sparks/Reno)  In talking with the head development planner for the county, there is no residential zoned properties in the center and barely any in the county except for the closest city which is about 20 minutes East.  Other than that you will have to look at Reno/Sparks or Fernley which is the city to the east.  The area is still unsure where the growth will take the residential and multi-family.  I have heard from both sides that it will cause Reno proper to grow to the North and also heard it will grow east of the center in the city of Fernley.  Still up in the air right now but will say from a development standpoint I know developers doing big high density multi family in northern Reno 

@Jeff Caravalho I was looking at doing a development deal in Nevada and was seriously considering modular (was going to be 50-100 homes).  I will say when I spoke with the contractors and companies that do modular, they did not want to talk much until I told them the mass we wanted to do.  That is when their ears perked up.

I will say that from my research there are some good and bad about modular homes. First, you are not going to save that much money on construction.  The price difference was very minimal when you take into account getting a pad and utilities ready for it.  Then the pricing was slightly higher, however that is counteracted by the time it takes to come to market so you are saving on you loan payments.

Secondly, even though you think it is a fast way to build a home, you still have to wait for the modular parts to be made for you.  One company I was talking with were on a 9 month waiting list.  

I will say the only companies that would talk to me were more of the "custom" modular. There are a few companies out there that do one offs but they are focused on the 3k+ sq ft multi million dollar homes for California.

I would say if you are trying to build rental homes, there is not that much of a benefit to doing modular.  If there was, traditional construction would already be out of business.

As for clearing land.  Talk to the local city/municipality, they should direct you to the right people to talk with.  Could just be local fire or you could get directed to county or even a federal jurisdiction depending on what you are clearing

 O, I understand now.  I knew a couple who was investing and decided that on their marketing materials they got a dedicated cell phone with a different number than their personal phones.  That was their "work" phone and just traded it off depending on their schedules.  On their materials they put both of their names and that dedicated work phone number so regardless of who was answering, both of their name was on their marketing materials.

Maybe get a dedicated cell phone and just trade it off.  With this being a different situation than what I originally thought, I guess you could get a answering service but I personally get mixed feelings about it and would avoid it if you could.  However, without having a office that you are both at consistently I guess that changes things.