All Forum Posts by: Rawn Wilson

I will be listing a meet up after the 4th of July weekend. If anyone out there enjoys working with social media, send me a PM. I need assistance creating a Facebook page to reach out to more people.

ATTN Pearland investors (or anyone interested in real estate)!  It has been a while since I/we gathered to talk the good stuff - real estate investing.  Military duties, COVID, family, commercial development, flipping, and renting have me running every direction.  I need to focus!  I need your help to keep my sanity.  Lets start a monthly group inviting newbies, pros, flippers, landlords, agents, contractors, etc, etc to come together and mastermind some great ideas and motivate each other in this crazy market.  This Wed June 9th at 7pm I will be at Bakfish to start meeting people and use this first event to break the ice.  Even if one person shows up, it will be fun and we will continue to grow the group and possible even change day/time to include more people.  I am currently at the end of a local flip and would be happy to talk the deal deep dive to start things going.  Contact me with any questions or comments.  Pass the word.  See you there!

Update- got a new tenant pretty fast.  They have made the first 2 payments on time!  It's looking better now.  

I just took an individual to small claims and was awarded $8,600, but the reality is I will probably never see it.  Texas protects just about everything they own.  If I have the time, I may file a similar suit against the old tenant, but I need to do some digging on his new address to serve him at (he moved), as well as other data needed for the suit.  I have his DL#, so I will start there.

It's not so much about getting money, but about tagging his name, company, and reputation with a default lease. I would also like to know if he did receive the SBA PPP loan so I can report him as not utilizing the money properly.

I own a commercial automotive shop in Pearland, TX and leased it out in October 2019 on a 5 year lease. The tenant recently abandoned the property in the middle of the night. All of the equipment and signage is gone, and I posted a lock out notice. Unfortunately, there is nothing left to help recover rents. He was behind on rents and said he was approved for the SBA PPP and would pay when it was received. As of June 1st, he is behind $11,600 and left $149,900 on the rest of the lease that runs till September 2024. Small claims court will only file amounts less that $10,000. Any suggestions? I have looked into contacting a collection agency, hiring a lawyer to file a claim, or just move on. It will take about 3-4 months to find a new tenant while I still pay the mortgage. Luckily I have a reserve for this case.

Close up main kitchen:

Apt Kitchen before:

Apt Kitchen after:

Main House Kitchen Before:

After:

I have been reading everything here about investment strategies, value add deals, being inventive, making connections, the BRRRR method, and even commercial evaluations. I am so glad I did! I finished up a single family BRRRR mid 2018 and started to look for my next project. I stumbled across an interesting property on Loopnet that consisted of one lot with a single family house that had 2 apartments (one attached and one detached) and 2 automotive shops on it on a corner lot. My hobby is building race cars, so I was excited to see this property located in my own city 7 miles from my house. The original asking price was 350K which was lowered to 300K. When I called the agent, she told me a wonderful story of how a family lived there for 30 years and ran the shops until the father passed away 3 years prior. The 4 siblings rented the shops and house for a bit, but decided it was time to sell. The property was once in a remote area, but now was surrounded by a mix of residential and commercial buildings. To top it off, the agent was the sister of the deceased owner. I immediately went to the courthouse to see how this was zoned. It was BOTH on the same lot. The house was residential and the shops were grandfathered in as commercial and had to stay automotive related to do so. The house and apartments shared electric meter and both shops were tied together on a different meter. The entire property uses same city water. I made contact with the only sibling who was in the area and talked to him about his dad and the business he had. The agent made it clear it would be difficult working with all 4 siblings to accept an offer as they all disagreed on certain aspects of the sale. I figured if I could get one on my side, I could make this work. The house was an older pier/beam style house with 3 bedrooms and 2 baths. It had many levels and obvious foundation issues. The attached efficiency apartment was nasty and smelled bad. The detached efficiency apartment was torn up and unlivable. Both apartments had full kitchen, one bathroom, and one room acting as bedroom/living. For the right price I could see this working. The shops needed cleaning, but could be ready to go quickly. They even has lifts in them. House, apartments and shops all operated with window units. Even better to negotiate was that the city was tearing out all the roads and adding new underground drainage and driveways to the property. It was a mess around there. I purchased the property in November 2018 for 265K. It was funded by taking on a partner who had equity in their home. We did a HELOC for the amount. My job was getting the deal, handling renovation funding and direction, and leasing. If I can get the entire property appraised at commercial (income based valuation), then I believe I can get a high appraisal for the refinance. The plan was to use shops for renovation materials and renovate the apartments first and then the main house. I wanted to find a mechanic that would rent the entire property for $5K a month. At that income, I was hoping for a 425K appraisal. The house renovation took longer than expected and we blew the 30K budget quickly when we dropped 6K on foundation, 6K on full HVAC, and 6K on new sewer pipe along the entire property to handle everything. It was an older quirky house, and I could not find an all in one deal. I ended up leasing the house and apartments to one large family for $2100/mo. I can not sub meter the water, so I pick up water for entire property. I started to work with local banks to find out who would do this loan and work with me on value. Started the loan process while I finished the shops. It was difficult to lease out both shops individually, so I created an inventive lease. 5 year lease, 2 moths FREE to setup, $2100/mo remainder of first year, then $2750 remainder of the lease for both shops. With that, I leased it quickly. I took both leases to the bank and made the deal. It is not the BEST terms, but gets our foot in with a great bank. 5 year loan amortized at 20 years 6.4%. They agreed to loan 80% of my projected value of 425K if it passed appraisal. That would be $340K. THE APPRAISAL CAME BACK AT 525K!!! I decided to not pull out 80% of that and stick with the original $340K. With initial purchase, high interest on HELOC for a year, renovation and holding costs, we were in at $340K. So now we have a income producing home and automotive shops with ZERO money into it! How great is that? I plan to ride out the next 5 years and hope the auto shop does well. If it does, I will renew the lease with a rent increase (which raises property value) and take out a larger percentage of the value next time during the refinance (with better terms).

I purchased a property that is all one lot, but has a house and an automotive shop on it. The house is zoned residential and the shop is grandfathered as commercial. I have insurance separately on both. I have leased out the house and shop, and recent commercial appraisal came back at 525k. I have used all cash and now am going to take a $350k mortgage to recoup my money. Bank is telling me I need a $350k insurance policy to cover the property. My current policy only covers rebuild cost of 250k. Insurance agent is having issues finding a policy that will inflate build cost to match my commercial income based appraisal. Are their any commercial type policies that can handle this situation?

I’m starting a Pearland meetup thread in the events section from a moved thread, but wanted to let everyone know a last minute opportunity. I will be working on my recent deal tomorrow from about 9-3. Feel free to stop by and check it out. I’ll be installing a urinal and working on some electrical. It’s a house and auto shop mixed use property at 2745 Wagon Trail rd pearland TX 77584. Send me a PM if your interested.