All Forum Posts by: Josh Southern

@Wayne Brooks they are separated at the meters.

But I’m just not comfortable paying the utilities, as they rent is not high enough to justify the expand potential for abuses.

Also side note.

With utilities and current estimate on net cashflow it's about 10%CoC. Which is okay, and subpar for my liking. With the utilities dropped and rent established its closer to 20%. Mainly due to aloe of power and natural gas use age in the winter months.

But I’ve had issues with paid utilities before and that will probably be a deal breaker if I can’t drop the leases and resign with them paying utilities.

Also note: the rental rates I’m going to change the lease to; is very good for my area and not at all unreasonable.

Looking a at nice muti-family.

The good:

One 3/2 house with 3.5 year tenets that are month to month right now.

Two 1/1 apartments over a 4 stall garage (which is not used by tenets)

The bad: after showing but before I put in offer; current owner signed new leases for both apartments, with the following issues:

- let one tenet (his elderly family member) move in

- with no deposit and owner is paying utilities.

Rented the other apartment, and got a deposit. But also included utilities.

Now I know some places it’s fine and normal to pay utilities. Where I live (WV) it’s uncommon and I’m not comfortable doing that.

Final issue: the house also has utilities included, but on MTM, I’m not worried about changing that.

Now here’s the issue: I want to cancel the lease for the apartments and get the deposit for the one unit, and have them pay utilities.

Under what sis can I do that?? And is it legal??

How would you cash flow a small spot of vacant commercial land! Creative thoughts or old school know how appreciated!

My thoughts:

I recently acquired a small piece of vacant commercial property.

Got it at a steal (got from owner for taxes owed), he just wanted to sell it to cover the debt. All said and done I’m the deal under 2k, value as noted is 10-12k.

The only reason I got it was I wanted a cash flowing commercial property, as I believe the long term value is much more.

It’s located on an extremely busy road, with 150 foot of road frontage.

It’s not very large about 7500 square feet (usable space) 150x49. It’s actually about .25 acre, but not fully usable (hillside)

I have done my due diligence and spoke to the City zoning about conversation from vacant land to building something, which went well.

My first plan ( I’m a hardcore DIY guy) is to bring in my skid steer and dump trailer and grade it all level with the existing blacktop that’s there (150x25).

Then Plan A is to build 5-10 self storage units 10x20 and possibly 5 - 10x10 or 8x8.

I’ll probably be into this for about 15-25 k (varies with how nice the place is at completion.

Then rent our for About market rate (5-10% higher)

Due to ease of access and very convenient location.

Which would cash flow about $800-1000 a month.

So 15-25 months until it’s paid off .

Plan B. The selling gave me a contact for someone wanting to rent it for rent to own yard barns. He wants to rent as is for $400 a month.

What would you do ? What other ideas would be able to work here !

Interested to see what you folks think.

@Mark Cruse

Any hard money lenders you would recommend or ones you wouldn’t use again?

can you walk away? are there a lot of deals in the area?? if the numbers dont work now, they won't change.  Especially if the work amount is up in the air.

If you wanna salvage the deal maybe ask for renegotiation or ask both realtors for Comps and see where things fell off the track.  it could be a easy fix or a big pain later.  

ask the buyer to split the repair costs from what you originally where quoted, and tell them it may be a deal breaker.  depends on their motivation level at that point.