All Forum Posts by: Tod R.

My tenant is moving out mid June. I'm going to walk the property tomorrow but I know I will be doing a major rehab. Right now, my WAG (wild *ss guess) is $75K. The home sits on a 4.8 acre tract and has another 4.9 acre tract next to it. My options as I see it are:

1. I can sell the whole thing-Path of least resistance, and possibly least profit. This would be the quickest option to sell off everything.

Est. Sales Price=$675K

2. I can sell home and land separately-Given that all but one home sold/for sale is 5 acres and under, maybe the market prefers less than 10 acres. Also, I don't see how I can get full value by selling a 9.7 acre home vs. selling a 4.8 acre home and a 4.9 acre lot.

Est. Total Sales Price=$700K

3. I can sell home only and have land free and clear-I could retire the lien on the entire property with just the sale of the home and I would have the 4.8 acre tract free and clear. I could put it up for sale and be firm on the sales price or I could use the land as equity in a JV to build a custom home.

Est. Sales Price=$675K, Plus land equity of $150K and profit from JV.

My note balance is $350K. I plan to take the profit and buy and hold rentals (SF,MF, or Commercial).

I've uploaded my sales comp analysis for your review if you wish:

http://www.biggerpockets.com/files/user/Tod/file/sales-comps

Thanks

Hi Trey...Just saw your post. Welcome aboard.

You are close to one of my favorite spots in Tx, Vanderpool. It's a beautiful part of the Hill Country.

Keep us updated on how your market does. Oil/Gas boom markets change dramatically.

Tod

Welcome to BP Phillip.

There are a few people on here from OK, so maybe time for you guys to have a meetup at the local Toby Keith's!

What type of deals are you looking to do?

Tod

Same in Tx, up to 30 days. You get the opportunity to document damages to deduct from SD.

This is exciting! I'm getting ready to tinker with the colleague community so apologies in advance if I mess up!

I already noticed the universal scroll which I love. At first I thought something was wrong with the page!

Thanks Josh, you've got a great product here!

I cut my teeth in the commercial/residential development and management area. I've only recently invested in RE.

I have a couple of SFR's, one is on 10 acres. I'm planning on selling the one home on 5 acres and keep the other 5 acres free and clear to either sell or build new home. I have a couple of other acre lots that I plan to also either sell or build.

Hey Greg B., For a passive investor, I would try to structure it as a loan. Especially if they are looking for monthly payments. But I agree with Will that they probably want their loan secured by the RE that's providing the cash flow.

If they want to participate in the profits, then I would put together an LP or LLC with them. Everyone's capital would earn a smaller preference(interest) that would be paid as cash became available, not regular payments. Then once all partners got their capital and preference returned, any distributions should be disproportionate in your favor to reward you for the expertise and sweat equity. This basically puts the cash contributions in a higher priority compared to your sweat equity.

Sounds like you are getting ready to expand the empire!

I agree with Michael X. Now that you have done a few, you can find passive investors that want a decent return on their money. Pay a 10% return, you keep the difference.

Shawn Thom, sounds like you have a great opportunity to learn from your cousin. Hopefully, he's someone you can trust that there's no hidden agenda.

I agree with Mike Hasemann. For your first few deals, you may give up your cash flow if you have a PM but you still get the other benefits of REI, especially tax deduction & equity buildup through mortgage paydown. If you decide to manage yourself, you will have a part time job for sure. You will also get a good education. Either way, it's just not that simple.