All Forum Posts by: Paul Hoffert

Hello Nadia,

I am glad you are taking your first steps. As always, read these posts since they are very helpful in your new real estate journey.

As for this deal. Please note, the following are just my thoughts on how I would look at this deal. Others may have a different opinions. Just do what you feel is correct. 

I would have the current owner provide you proof of deposits for the last two years for the rent receipts (look for steady on time payments as well as consistent amounts.). I would want to see actual bank deposits (not a quick books entry or excel sheet).  Just to make sure there is the correct amounts matching the lease coming in on time.  I would also ask for the lease agreements for the two separate current tenants. I would hate to see you get it and they move out the following month because they are on a month to month lease thus removing your income stream right out of the gate.

I would get an inspection on the property to make sure there is not a hidden issue of Black mold or asbestosis and such problems as maybe a leaky roof. Since you will be taking over and being responsible for the unit. If present you would be on the hook for correcting this issue all the time with dealing with the current tenants. 

I would also double check the city building department since (if I am reading correctly) you have two income producing units on this property. If there is actually two units I would make sure the ADU is permitted and supposed to be there as well as up to code. I would hate for you to get it and somehow the city comes in and makes you stop renting the second unit. Double check that there are not any nuisance liens (Trash, Tall grass etc.) on it by the city. I have heard recently the city is not removing some of these but I think they are for bigger issues and should not be an issue for your deal. (I have not verified it but never hurts to ask.) You can start with the city website www.coj.net for the building department or property appraiser or the tax collectors office www.taxcollector.coj.net 

As for the structure of your deal just read the forums about llc v Incorporated and all the good information that can be found in there.

One other thing I did with my units that many may not agree with is that I get a general liability coverage for each llc related to that llc and I would get an umbrella policy for you as well. This is extra above and beyond like I said but I copied this from my non-RE business. 

I wish you well. 

Paul

Austin,

TriciaRae and Mindy both gave good advise. 

The Riverside market (St Vincent's) and San Marco (Baptist main campus, Anderson Cancer Center and Wolfson's children's hospital) plus right next to downtown cover a good portion of the bases. Southpoint (Another major hospital and lots of medical related business (surgical centers, Cancer centers etc.) plus a good hub of business clustered in the area. 

The beaches area around Mayo Hospital is a another option but you start to get a little pricey in that area. Being close to Ponte Verde area you have a lot of wealth management people in that area as well. 

There is an opportunity possibly for you in the Springfield area (Shands Hospital a Level 1 Trauma  unit plus a couple of other hospitals and a ton of public service medical centers around there. But you will have to up security if you are very close to the hospital. One of the most dangerous neighborhoods for getting shot was just two blocks past the hospital.

(Please note this about Jacksonville, it is a great place but no mater where you are there are hit or miss spots. I grew up here and worked in the core city areas as well. When I say it is dangerous it is like most places, just be careful. I live in San Marco and two former mayors are my neighbors. Just up the street about a mile and a half we have some serious crimes. It is just this city. So don't be scared of the Shand's area, just enhance your units for the safety of the nurses. I actually looked at moving about five blocks from Shand's in Springfield area off of Main Street it is has so many beautiful restored Victorian homes. So I am not afraid of this area.)

Other close options would be to the north in Nassau Co (Yulee/Fernandina) that area about 20 minutes north is booming. Not super plays on business rentals but the medical options may work in this area as well.

One other area is South Jacksonville/St John's county. Fast growing area with lots of development and new medical centers. Baptist South and related medical centers are popping up down there. Also so good businesses located close by. 

I am sure you will find opportunity somewhere here and I wish you luck. 

Paul

Hello Vincent,

Jacksonville is a unique city in that it is so large as you know. While some areas have higher crime rates all areas have bad pockets. I live in 32207, there is a street that is 1.2 miles from my house that even my employees that live off of Moncrief say don’t go back in there! Depending on your investment wants and needs each area can and will offer an opportunity. I have talked with people that live in areas that you mention and they all have pockets that are nice and quiet as well as can be very dangerous. I worked off Talleyrand back in the 70-90s for the longest time and weekly had to drive into areas that were not safe. You become acutely aware of the signs a block may not be the best place to be. Driving for dollars as they call it is still the way I look and judge if I want to invest. I have driven many of the streets in Magnolia Gardens, Phoenix, Panama Park, Grand Park, Biltmore, Lincoln Villas, Robinsons Area, Mixon town and related areas. All have streets that are like oh crap! But there are some finds that just make sense. Like I said what are your goals? Section 8, Flips, straight rentals or buy and hold. Each could and does work in this section. But just do your research, it will take time. I think you can and will miss good opportunities by just all together dismissing a section. I wish you good luck.

Zachary,

I used to camp down there years ago and the lakes were wonderful. Then the state gave a company permission to pull water out for industrial purposes. There was much to do about the lakes loosing their water levels after this but of course the powers to be said this was not the case. I of course cannot prove this but the evidence was pretty clear. There is a natural cycle but several of the lakes went almost dry. While I have not been down that way since covid the lakes were still significantly down from what I remember. There are still good lakes around just please do due diligence and research on the property that you are interested in purchasing. It is a nice county area to live in and I wish you luck. 

Hello Chris,

This is just a thought but since you were gifted a piece of equipment are you considering putting it on the balance sheet under the holding llc and using it to clear other properties around your property. Another source of revenue under the llc. Upon a future sale of the property you could continue the services under the llc to the new property owner as well as the other customers or sell it together with the property showing another avenue of revenue.  I know with my warehouses up north we contract out snow removal. If so you may consider a longer depreciation, depending on how long you want to hold the property. It is just a thought. I don't know your situation and I am not trying to provide tax advice. 

I am also going under the assumption that you are running the expenses (fuel, maintenance, insurance and ect for the unit) in the holding llc. No matter what always get your local CPA to review, they are invaluable in their guidance on these matters. 

Lesley will be a good resource since she has boots on the ground. Jacksonville is, by land mass, one of the largest cities in the US. In my zip code alone with in three miles of my property you have multi million dollar homes to high crime areas. Most of the city is much the same. You can use the resources from the sheriff’s department to pinpoint localized crime and steer away from certain areas. You should be able to find good values if you are patient.

@Joseph Henderson if you are new to Jacksonville area you will find lots of opportunities through out. There are many good opportunities in the 08 and 09 zip codes. There also are some very risky areas. All of Jacksonville has a crime issue. You can look at the crime maps from the sheriffs office and run the numbers to see. Like the others have said. Driving is a good idea. Just follow up with data on crimes in the surrounding blocks on the property you are looking at closely. Also talk with a local police officer in the area. I have had good luck doing this to find out about gang areas and streets to avoid when I am looking. Good luck.