All Forum Posts by: Miles Stanley

@Patrick Connell

The OP was asking about basically buying land low and selling high...which is what i addressed.  I was sharing an anecdote from the experience my associate had doing what Marcus is asking about.  For example, if there is a vacant lot in a residential subdivision that has been built-out for 20 years and you buy it thinking you are investing...what basis would there be for expecting to upsell it for a profit?  Clearly the demand for it since its been sitting there vacant for 20 years.  i think this is a way to get burned.  

I haven't really spent a lot of time researching this type of strategy and I'm not saying it does/doesn't work...just that I'd rather have the income producing variety of property...buy my goals are oriented more toward boosting my income and padding my retirement. If i can get a good value play here and there...then great, but my main strategy is income-centric.  If you are rocking it, then awesome!

Since we're on the subject, can you talk about how undeveloped land values are determined?  What makes this vacant tract more or less valuable than that vacant lot.  Are land comps relevent here...do they even exist?

Thanks,

@Marcus Nickson @Patrick Connell

Someone i know did this a few years ago and lost big.  I think he may have gotten a little overconfident (cocky) and went too big too fast.  His issue was he was holding onto the property (and making large/costly finance payments) while deal after deal kept falling through bc the buyers couldn't qualify, etc (there was always something).  Other than developing (which as an engineer specializing in land devlelopment, I can tell you invites a ton of other expenses that need to be accounted for...that a lot of starting devleopers DON'T) or selling off later (here's the speculation part), i don't see the value.  But then again, it isn't my model of choice.  You could maybe lease it out to others for storage to generate income (like RV's and stuff), but that might fall more into the realm of land development again depending on if any site improvements need to be constructed, etc..

I'm a buy-n-hold/cash flow guy so to me the land thing seems highly speculative (unless you are developing and adding value to fill a need in the market).  When we first started trying to figure out our niche, my wife wanted to go the land route and i strongly disagreed.  i told her we should consider doing it here and there in the future, but i did not want it to be our primary real estate investment vehicle.  I argued that if we just sit on it and it takes 5 years to sell (for example), that's taxes and possibly debt service costs eating away at our bank account every month until we offload it at (hopefully) more than we paid.  Even with that being said, i would rather we never did it unless we had some insider market knowledge about plans for the area and we decided to get in before things exploded.  I had a client that this happened to.  He owned a piece of land and next door Wal-mart build a store and suddenly his values skyrocketed.  In talking to him, it sounded like this was luck bc he didn't know anything about the Wal-Mart coming in.  I prefer not to make investment decisions based on luck, speculation, hopes, dreams, tea leaves, etc... but rather numbers and income potential.  

Best of luck!

Hello San Antonio Wholesalers!

I'm looking to buy Single Family and Small Multi-Family properties in the San Antonio, Converse, Universal City, Schertz, Cibolo, Selma area(s).

Please reach out to me and lets talk about what you guys have to offer?  I can share my criteria, etc via PM.

Thanks and look forward to hearing from you!

@Russell Brazil, @Bill Gulley,@Jackson Carr, @Levi T.

Above it seems like there may have been an argument over semantics. I think the term 'value' was being used too loosely. The way I read it, I think what was being compared was 'after-repair value' and 'listing price' (which may or may not be in the ball-park of ARV). Everything i have seen/read/heard on BP indicates to look for properties listed below the estimated ARV if hunting on the MLS (but this could indicate the need for fixing up...unless the seller has other motivations). Only then is it truly a deal...no?

If asking price is near what the ARV comps are for the area, then you aren't really getting a deal (again, depending on your strategy). Some people pay retail all the time and swear by the strategy (not for me though). Of course, it would be good to buy in an area where values are increasing (or at the very least staying level) so that the ARV you used on the front end doesn't start to slide downward 6 months after you buy as the market does its thing...

Another factor i would consider would be to offer what works for you considering everything that would be needed to purchase and get the home to appraise for close to the ARV. Isn't this what flippers and BRRRR-ers do (in a nutshell obviously)? My thought is, if the market analysis shows that the asking price is not supported, then why would you pay that for the property? I don't think offering higher just to be competitive is really wise (which is also a good way to get caught in a sling). You could be bidding against more 'emotional' buyers rather than people who put their faith in the numbers.

This is happening on a duplex i am looking at. The seller wants $150k but the comps for this area indicate that anything over $125k is ludicrous. I offered what would make the deal work for me. It was lower than the ARV of $125k, but it also took into consideration, profit, needed repairs (i did visit the property), fees, etc. The property has been placed under contract and buyers have backed out twice and as far as i know i am the only offer on the table...but again i refused to offer more than i could afford just to compete. I did a lil research and it appears that the seller paid close to the ARV for it back in January and are now trying to off-load it at a higher price. Doesn't seem to be working...its just sitting there now. Just my 2¢.

Thanks (and please don't shoot me!)

i just opened a PO Box and i asked the clerk(s) there if when i put the PO Box address if i could write it as:

xxx Post Office Address #XXXX

City, State, Zip

or if i HAD to write out

P.O. Box XXXX

City, State, Zip.

...and they didn't know for sure.  

I want to use the '#XXXX' format bc to me it looks a little less PO Box-y, but i don't want to risk my letter getting kicked back needlessly.  Does it matter for direct mail??

Thanks,

OK, i have seen some people place their return address on the back flap of the letter envelope and others in the conventional upper left corner on the front...does it matter or have some impact on response rates?

@Carl Richardson, that would be awesome!

Thanks,

@Michael Muenchow 

I live in Schertz too and what I've been seeing is that the area is a little pricey compared to areas within San Antonio...but I know there are some pockets of older homes that might be more reasonable for rental income.  New Braunfels is pricier still, but I don't know much about that market..

I've only really studied rents around my house for now, but there may be some good opportunities if you look hard enough.

Welcome to BP!

@Rick Pozos @Matt James

I'm an engineer and i do a lot of work in land development for private clients and i can tell you that you will most likely need to get the lot platted before you can build anything.  The city uses platting as a way to force you to do everything they require.  They basically will not approve the plat or any associated building permits until all requirements are fulfilled.  Before the plat is approved/recorded they will require you to extend the utilities to serve the site and improve the street to UDC standards (depending on the condition of the road now).  Sounds like you are clear of the Edward's Aquifer areas, that helps.

I'm confused because you said is is zoned residential then you say it isn't zoned.  The parcel should still be zoned even though it isn't platted, so you need to check the City's website for what it is zoned.  If your proposed development is not allowed within the existing zoning (check the UDC), you will need to apply for a rezoning.  I have gone through this and it isn't pretty sometimes.  If you propose a zoning that the neighbors don't like, believe me they will appear and publicly speak out against it.  You basically need to state your case before the zoning commission and let the cards fall where they may.

Regarding utilities, there are really 3 costs associated: 

1. Design - usually a set of engineering plans is required to be submitted to the municipality (SAWS for water/sewer) before they can be built
2. Construction - cost for a contractor to build the utilities per the plans, and
3. Impact fees - you will need to pay these to offset the 'impact' your site has on the water and sewer system.  Depending on your proposed site, they can be expensive...in the $10's of thousands in some cases.

That's the tricky thing about land development...to take a raw piece of land and build on it usually involves triggering extensive development requirements by various agencies.  i agree with Rick, this should have been considered before you bought.  Platting, zoning, engineering, construction, etc can run into the $10's of thousands also and can really take a financial toll if you didn't account for them.  But again, it all depends on what you plan to do.

Let me know if i can answer any more development questions.  You can also schedule a development meeting with the City planners (free) and talk about your plans with them.

Miles

@David Dachtera will do.

Either way, whats your opinion of the cracks? 

My understanding is that if its plaster back there that the cracks like this could mean some serious movement has taken place since its more rigid than drywall and more brittle.

If its drywall, are these less of a concern?