All Forum Posts by: Pearce G.

Can you rehab it into a 2/1 with a 1/1 studio?  Might get you enough rent to cash flow.

Got it.  Thank you!  Great explanation.

Thank you @Dave Foster.  I really appreciate your guidance.

I hear you on the reasonability standard, but I'm not sure what you mean by  "dealer" in this context.  Realizing you're not providing legal or tax advice, what part of my strategy puts me at that risk?  

I'm somewhat familiar with FINRA rules about broker-dealer transactions, but I don't think that's what you're talking about.  FWIW I'm not an RE agent myself.  My pending purchase of the structures+vacant land and my intended sale of only the vacant land would both be handled through a licensed agent.

I have a commercial zone property under contract that includes a building that I intend to hold for rental income and some additional vacant land that I intend to subdivide from the building and then flip.

For tax purposes, how is the cost basis allocated?  Is it split evenly between all the subdivided parcels?  Or is one of them deemed to be the original parcel with full cost basis and the other parcel(s) have zero cost basis?  If so, can I decide which parcel retains the cost basis?  Or is cost basis allocated by rule or appraisal or some other formula out of my control?

If the cost basis on the vacant land is zero, then I probably need to plan for a 1031 exchange when I sell it.  On the other hand, if I can assign the entire cost basis to the vacant land, then I will have little or no profit on the sale, and a 1031 is not necessary.

Hi David.  Let's talk.

Hey everybody,

I'm in Charleston and have my first 2 deals underway. 

Closed on first unit last month.  Currently getting it ready for rent.  Starting small and learning a lot. 

Second property is under contract and a little more ambitious.  Commercial with 2 structures and almost 2 acres of additional vacant land.  Plan is to subdivide, flip the vacant land, and keep the structures for rental income.

Two lessons I learned from BP that have played out with this second property:

1.  If you're not a RE agent yourself, work with one who knows RE investing and who knows what you want.  I never would have found this property on my own.  But because my agent knows what I am trying to do, he found a great deal for me.  I can sell the vacant land well below comps and still end up with little or no money in the remaining rentals.

2.  Shop your community banks for portfolio financing and then spoon feed them.  @Brandon Turner talks about packaging all your info in a binder.  I did that for meeting with lenders but also put electronic copies in a Dropbox account.  Instead of handing out a bunch of printed binders, I could just send them a link to my Dropbox files complete with my financial profile, comps, plats, cash flow projections, and traffic data.  Made it easy for them and also created the appearance, at least, that I know what I'm doing.

Good luck everybody!

Hi @Damien Ray,

Not exactly a broker loan.  I hold stock in a brokerage account, and I can borrow against that account instead of having to sell the underlying stock to raise capital.  It's sort of like a line of credit with the stock as collateral.  I do pay interest, but I don't have to pay points or fees or get approval each time I use it. 

Anybody with experience buying or leasing mobile office trailers or shipping containers that have been converted to modular offices?  I can get a quote on a new one, but was wondering if there is a secondary market.  Where would I look?

I have a ~2.5 acre property under contract zoned "neighborhood commercial" meaning it is a transition zone between residential and heavier commercial activity.  So it could be business/professional offices, convenience or other light retail, or even multi-family residential provided it is in the same structure as a commercial use.

The property currently has a 2100sqft house and a large, detached 3-bay shop/garage which I intend to lease together or separately to commercial tenants.  (Zoning does not allow the house to be used residentially any more.)

That leaves almost 2 full acres of vacant land that I am planning to have subdivided into a separate parcel.  It has its own road frontage with good visibility at a busy intersection (18,000 cars per day).

My question is how to get the most out of the extra 2 acres without pouring a lot of money into buildings and utilities?  Is it better marketed as raw land or will it get more attention if there is a development plan on paper at least?  I was thinking of using proceeds from sale of the vacant land to pay off or pay down the note on the original purchase to maximize the cash flow from the house & garage.  Or maybe I could lease the land as another income stream.

I welcome any ideas.

Thank you, Wayne!