All Forum Posts by: Rob Nichols

@John McGonigal pm sent.   

Hi Mark,

I sent you a PM with a recommendation.

Rob

Zev,   I use  Chad Endres with Thrive Insurance here in OKC. He's an independent broker who can shop around for the best rates.  He's come up with solutions for our business when other agents have come up short and I've been real happy with his service.   Feel free to PM me for his contact info.

Oklahoma BPer's,

I'm looking into purchasing some vacant land around OKC with the intention of building duplexes.   It'd be approximately 4 acres on a corner lot between two roads and next to an already established neighborhood so it's within easy access to utilities.    Does anyone know a rough ballpark on the soft costs of upgrading raw land to a point where you can start the vertical build (permitting, other entitlements, grading, utility connections, water and sewer, etc)?  

Thanks!

Rob 

Count me in; thanks Paul!

Congrats Bill!  Thanks for the descriptive post; very motivating.

Joint Venture Guru's,

Bottom line Up Front:  What's the value of being a co-signer on debt financing?

I was hoping to get some perspective/advice on a partnership offer. A developer I know has been building SFH's and MFH's for the last 10 years. He owns some acreage in a college town and wants to develop it for graduate student housing. We were in talks for me to purchase a couple SFH's on that land when the idea came up for us to partner on a larger multi-family building (26-unit). We're discussing doing this as a buy-and-hold vs a flip.

He owns the land (notionally valued at $200-250K). We anticipate the construction cost to be around $1.5M. He can't qualify for the construction loan by himself so that's where I fall in. I can qualify for the financing however, I don't have any commercial RE experience so the lender wants both of us to sign for the full recourse construction loan.   The broker we're working with said there shouldn't be a problem re-financing into a permanent non-recourse loan after 15-18 months.

The developer has all the expertise to oversee the build (finalizing the architectural design, dealing with the permitting, serving as GC, etc). Plus, he's contributing the land and can even contribute most if not all of the required cash/equity the bank requires.

For my part in qualifying for the $1.5M construction loan (full recourse), the developer is suggesting an 80/20 split on the deal.  Once the loan re-finances to a non-recourse perm loan, then he would want to drop my interest to 10% as compensation for doing the construction loan (as I would have no liability at that point going forward).  

If my roll were simply be a co-signer on the construction loan, what is a fair value for that?  If I were to bring some or all of the 20% required equity to the table, how would that change the partnership split?  

Thank you all in advance for any thoughts/suggestions!! 

@Bill S. thanks for the suggestion on the free option through craigslist.  These particular homes are over 100 years old, vacant, and very dilapidated so I don't think there's anything to salvage.   I did get a list of demo contractors from the local jurisdiction but they weren't endorsing anyone in particular so I thought I'd reach out to BP to see if anyone had any recommendations.

@Aaron Moore, thanks for the recommendation.  I'll give him a call!

Does anyone in the Colorado Springs area have any recommendations on a licensed demo contractor to remove two small single family buildings from a parcel of land?  

Thanks!

Rob

@Joshua S. thanks for a suggested counter-proposal.  If he's putting in $150K cash, plus the value of the land (~$150K) and I'm supplying access to the loan ($350K) then the total value would be ~$650K for a built property.   In that case, I'd be providing about 54% of the funding/capital required.  However, he'd be doing all the work managing the build and would have $300K of his capital tied up into the property while I'm not out of pocket on anything.   I'd be comfortable getting less than 50% of the deal, but am not sure how exactly to value what percentage it should be.  

Anyway, thank you gentlemen for taking the time to weigh in; much appreciated.