All Forum Posts by: Seth Borman

One of our houses has a large freezer that was installed in the basement before the floor was installed. As a result it cannot be removed in one piece.

I can chop it in half with a saw but I don't know what to do about the refrigerant and I don't want to run afoul of any regulations on releasing refrigerant.

Has anyone solved this problem before?

@Manolo D. what was it to the bank? To the equity partners? To the marketing company? Your portion of the project may have been a TI but the overall project was not.

@Manolo D. it is a development project because it goes through the same steps. Create an identity, shepherd it through the political process, build it and lease it. 

If you look at the numbers for large apartment operators they use 40-48% depending on different factors. The biggest factor is who pays utilities. If the tenant pays then the number is usually around 40-44%.

Of course, that includes all classes of apartments all over the country and smaller units will have different numbers depending on how you manage them. If you manage them yourself that line item is good for you because its coming right back to you.

I went and got a graduate degree in development, and while I'm new to the field one thing is apparent.

There are two routes that you can take as a developer. You can work the project management side, getting all the consultants on the same page, reviewing CDs, monitoring progress, scheduling, etc. or you can take the finance route, putting together pro formas, finding equity and debt, etc.

Barring that you can learn finance and do both, which works too.

Have you tried to build your own yet?

@Edward Yoo that is a good example of industry standards.

Can you charge for parking?

Expenses sound high. So does parking.

Originally posted by @John Mason Wallace:

".... great tenant and have some maintenance free years at the beginning". Good lord don't assume that.

I've got enough money built in to pay for contingencies, it would come out of profits. 

I think I recognize John Anderson's organization at work here. In working on a fourplex along the same lines. The way that it works out on my pro forma is that I have to attract a great tenant and have some maintenance free years at the beginning to build up a capital reserve. All my real gains are from appreciation and my equity at reversion (year 10). Right now I'm at a 7.5% cap with an 8% cash on cash return and a 19% levered IRR. I like the deal enough to proceed. You'll have to make a similar decision.