All Forum Posts by: Kristi Kandel

Quote from @Joshua VanName:

Hello everyone.  This is my first post here but have really enjoyed reading up these past few weeks.  Glad I found this site.  It's addictive.

I am getting ready to break ground on my first 2 rentals.  I am approved for 11 small dwellings on my 11 acres. I am a union carpenter and have small construction side business.  I will be doing the majority of the work myself.  I can build the A-frame for $53k in materials and the shed roof cabin for $41k.    

My concern is how this will affect my cost basis for depreciation or capital gains purposes.  My cost basis would be 40 or 50% lower due to the fact I am performing most of the labor "free of charge".  Over 11 rentals this would be in the neighborhood of $250k.     

I imagine if I cut back a few hours at work I could easily qualify for real estate professional status.  Just not entirely clear how this would benefit me? I only need 1000 hours to keep my union benefits and the hopes in building these is that I can step back from working as many w2 hours in the future.

Can I hire myself to build it?  Is that legal?  I could easily find the expenses to bring my tax liability for the income from building it down close to zero.  I would love another company truck and could use a new excavator. This seems the easiest route if possible.

Do I just go to work and use that money to pay someone else to come build it so I can have a better cost basis? Could anyone offer some insight?  Am I missing something obvious here?  Should I just be grateful I can build something for what I consider a great price?  Any help would be greatly appreciated. 

These are the 2 cabins.  The shed roof cabin will be longer than the photo depicts.  

 @Joshua VanName agreed the forums are a wealth of information. Based on your description I'd suggest starting by reading the book: Who Not How https://a.co/d/eLZv7lF

I think we all start off more DIY and getting our hands dirty. However, ideally if we started both with the understanding that collaborations and building the right team in conjunction for planning for our larger future and objectives we'd get to the "freedom" that we are all actually chasing via RE that much faster. 

If you DM me I have a tool that helps you think through and craft your Vivid Vision (where you'll be 3 years from now) I just can't share it in the message b/c it has branding to my company. 

My guess is that you'll end up doing a hybrid approach and keeping the parts of these projects that bring you energy while finding other "whos" for the parts of the projects that don't. Just remember that when parts of the projects and operations feel heavy to you it doesn't mean they feel heavy to others. Delegating to elevate teammates and partners has been vital in the success of my companies and empowering my team to grow as people and together. 

 I've completed ground leases for McD in California where the dirt is very expensive and Tenants like McD are ok just leasing not owning the dirt. That scenario does not apply in cheaper markets where McD would prefer to own the dirt. Just like ALDI, just like most national Tenants who are in the biz of RE and just happen to also sell burgers, groceries, etc. 

In ground leases, typically a developer is going to have control of a much larger piece of dirt and will build out entire shopping centers/developments. Those projects will then have "out parcels" where the developers will ground lease the dirt to McD for the McD team to then develop the lot and building. The developer will perform per the workletter in the ground lease that details out HOW the out parcel pad is delivered to McD. Things like the timing and completion of the necessary roads, utilities, and overall infrastructure for the overall development and how those are stubbed into the lease parcel. Sometimes that could also include providing a "certified pad" that the future building will be built on. 

For cheaper markets where McD will own the dirt you can reach out to McD real estate managers and their brokers to see what their plan is in your market. Then you could potentially try to identify land and essentially wholesale it to the McD team once you have the land tied up. It you found THE location and McD can't go anywhere else in a cheaper market (not typical) then you could try to ground lease but that's more of a risky gamble and I'd have many exit strategies. 

While the national tenants and NNN seem enticing they aren't as great as they seem the more you get into the weeds. When adding McD to a larger development sometimes that can help you secure other Tenants who are willing to pay more rent b/c you have National Tenants going into the development. That's generally the larger play when working with the big guys. They are harder negotiators and typically get closer to what they want so you want to leverage their brand to build the overall development and make the real profits/margins.

However, EVERYONE's strategy is different and my career started with developing locations for CVS and Family Dollar so partnering direct with national tenants works well too. It's just a completely different biz model that typically only the preferred developers are able to do. 

I invested a few thousand in Fundrise previously just to see how it worked and how long it would take to get my money back if I decided to liquidate. It performed ok and I believe it only took them 6 months from the time I requested to liquidate until I received my investment & returns back. 

Like any investment the more control you have on the investment the more you can participate in the outcome of the investment and ideally leverage your expertise in achieving good outcomes. I've looked a little bit into percent but haven't invested in it as I'm both a real estate developer and investor. I prefer to be the GP and control the assets with my post tax dollars since it's my field of expertise vs becoming a private money lender with preferred returns but no control on performance. 

However, everyone has different life circumstances, goals, expertise, and time. So, I like to share various options out there that I come across to help provide exposure to others so they can vet and determine their own personal investing strategy. 

 Exactly and all of that plays into the price you're willing to sell the additional frontage for to allow for the new lane. There are other things you can negotiate like them building you a privacy screen wall and adding landscape. That helps mitigate the noise and visual impacts. If there is other work you'd like done on your property or a new driveway you can negotiate that into the purchase cost too. Also make sure your tax basis is reduced as part of the sale since your land is being reduced. 

 You could always invest in funds like https://fundrise.com/ (allows you to invest in RE without being accredited) or https://percent.com/ (allows you to be a private money lender without all of the work) if you have money and less time. 

If you have the time it's worth looking into doing the typical deals discussed on BP forums like fix and flip, BRRRR, airbnb, etc. If you're managing the deal you'll always have the opportunity for a greater return. However, if you're limited on time passively investing in GP deals that you have fully vetted and trust the operator is a great option. I do that with my SDIRA. I invest into syndications as the LP with my SDIRA vs keeping the money in the stock market.

 1. Yes, start with identifying the zoning and allowed uses. Here is a tool from our local real estate developer course: https://docs.google.com/document/d/100dRzu-iQEIZbR1adxIASdH2...

2. Engage brokers to see their opinion of the highest and best use for the land. They do this for free b/c they want to be your listing broker. Here is a tool from our local real estate developer course to help you find brokers and aks them the right questions: https://drive.google.com/file/d/1kWhYL9VZrgcX4qC8q1kO50WCPsF...

Hey Andrew, I've been a developer for 17 years working on projects across the county. The first thing you'll want to do is define the zoning and what the allowed uses are for that property. You can use this tool to figure out that part: https://docs.google.com/document/d/100dRzu-iQEIZbR1adxIASdH2...

Once you have that you should engage a local broker to discuss the options for those types of uses in your market and they will be able to help you understand the overall picture and cap rates of the various options. This document helps you find the right local broker partner https://docs.google.com/document/d/1YRwDmuSRS6xMCMgD1CpNQjqT...

Development has many nuances which is why my team is creating a course and community around empowering local entrepreneurs to transform underutilized properties into dynamic community assets. I'm happy to share more if you want to DM me. However, the first two links should help you a lot! 

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

local entrepreneurs to transform underutilized properties into dynamic community assets.

 Hey Oscar! I've been a developer for 17 years and a lot of that work is in CA. Any freestanding Family Dollar I likely worked on it. Along with the ALDI, Chick-fil-a, Habit Burger/Krispy Kreme development off of Rancho Vista Blvd in Palmdale. 

I'm happy to jump on a call to discuss your vision for the property and share some resources with you to help your future project. Just shoot me a DM and we can connect!

@Account Closed I actually built the family dollar that is there years ago. I was inspired by the community leaders back then and how they were working together to help promote growth. I'd recommend talking to the city's economic development agency to see what businesses they are talking to about moving to the area as well as any local startup/entrepreneur companies that help new companies get started and expand. 

If the numbers work for you and your goals it's ok to feel a little scared but then to embrace that and dive in anyway! 

 @Matt Sears You are definitely asking the right questions. It might make sense for you to get really clear on your vision and your why and then reverse engineer your next steps from there. Here's a tool we share with entrepreneurs who are starting out in their journey of becoming the local developer in their community. https://docs.google.com/document/d/11z9Og7PCw7UJSbugLq0ppWLB...

I've been a real estate developer for 17 years working nationwide. We are in the process of releasing education components to reduce the friction for people getting into development. 

We empower local entrepreneurs to transform underutilized properties into dynamic community assets. It's completely feasible and we simplify the education to be a clear road map of the entire process.

I'm happy to jump on call to discuss more about your goals and vision if you'd like. Just shoot me a DM!