All Forum Posts by: William Jenkins

I am in St. Louis MO and could refer you to my attorney if you would like. He works across Missouri and is focused on real estate. Not cheap but I trust him implicitly. Email me if you would like his contact information.

The easy answer is yes but the real question is what is the cost. Assuming ComEd is in a right of way or power easement (almost a 100% certainty) they have every right to be there. They will cooperate with you to move, but it will be at your expense. I would suggest discussing the issue with them to see what their estimated cost is. They will likely want to see a preliminary set of plans on what you are proposing.

Not an attorney or accountant so I can't legally provide advice on business or tax structures.  Having said that, I would lean towards keeping things simple.  I don't see any advantages of an S-Corp owning multiple LLCs unless you have a very unique situation.  

I would like to talk to you on the rooftop wireless lease however.  I develop wireless towers for the big 4 carriers here in the Midwest and I have some avenues you may want to explore with your rooftop.  

I am probably a little late to the game on this thread, but let me know if Verizon is still active.  I typically represent the big 4 carriers and develop sites on their behalf, but I could certainly help you on your deal.   

Regarding billboards, there are federal laws (trump municipal and state laws) regarding billboard placement along interstates.  I would take a look into those laws personally and also approach an outdoor company to see if they would have an interest. 

Cell towers are my niche.  If a carrier needs a tower where you are, they will approach you.  You will waste a lot of time if you try to "pitch" your property to the wireless companies.        

I have never been in this market (small town commercial) personally, but I watched my grandmother do it for years and years first hand.  She made serious money over her lifetime and I can 100% guarantee that there is money in it if managed correctly.  She did it in a small bedroom/farming community outside of Dayton, OH.     

My gut tells me that the above all in price of $60k is a little heavy for the $1,000 to $1,200 gross per month.  In small towns there is a lot less competition from a buyer standpoint so take advantage of that in negotiating your buy price.

In order to make small town real estate work (at least on a larger scale), I think it is imperative that you be tied into the local community.  You have to be on the City Council, part of the school board, on the chamber of commerce, a supporter of the fire department, etc., etc.  Your goal should be to be the big fish in the small pond.  Your tenants are going to be very small businesses.  They will be good people, but many will not pay like clockwork and they will not be able to afford much rent.

Regarding equity, I would probably advise against pulling any out but that is simply my risk profile and yours may be different.  Depending on the quality of the asset and your personal balance sheet, you may have a hard time finding a bank that would allow that. 

Regarding moving over to a "long term fixed," there is really no such thing in commercial. The posts above are correct.... Most loans are going to be 5 yr (most common) to 7 yr (rare) balloons with 20 - 25 amortizations. A 10 year balloon would be ultra rare unless (a) you have a rock star relationship, and balance sheet with your bank or (b) you can broker the loan into a CMBS product (this won't happen in the sub $1M category).

If it makes sense to refinance now into another 5 year then by all means do it.  Just look out for closing costs and prepayment penalties (common on commercial loans).  

There are two issues here that need to be addressed in order.  

1.  Since the property is in probate, your mother and uncle are not the owners of the property yet.  The property will need to go through the legal probate process before they will actually take legal ownership.  

2.  Once the property is legally owned by your mother and uncle, your mother could buy out your uncle with a simple quit claim deed.  You do not need a title company to do this, but you are also taking a risk (albeit relatively low) that their may be an error in the chain of title (i.e. probate was not done correctly, etc. etc.).  This could cause issues at some point in the future if your mother were to ever sell the property.

With the probate in the background I would probably lean towards transferring ownership through a title company.  It shouldn't cost that much to have them draft the transfer deed and issue a title policy to your mother. 

@ Joe Villenevue

Here are two real life, non theoretical stories:

1.  I know a gentleman that lived by your investment philosophy.  He took every bit of paper equity he had and invested it into his next deal.  When things were going good, he made more money than most could imagine (and no I am not talking about 2% properties).  When the depression hit (2008) it was over, and everything was gone.  He was not alone, and I could name numerous well known and very wealthy people who met the same fate.  These were very smart people.   

2.  My grandmother was born in 1925 and lived through the great depression.  She was high school educated and nothing more.  In the late 60's she bought a farm property in a rustbelt state and over a period of 15 or so years developed a shopping center.  She built building by building and paid cash or MINIMALLY financed each new addition.  She would only move to the next addition after the last had paid for itself.  By the time she passed, she was very wealthy, although you would have never known.  I also know of others who have similar stories and similar backgrounds.   

Now back to Albert Einstein's quote as it relates to compound interest........"Those that understand it, will live off of those that don't".

What makes you so sure the banks you are borrowing from don't understand compound interest?  Perhaps they do, and they are living off you......  Oh, one more thing I forgot to mention.... my grandmother also founded a bank and that significantly added to her net worth.  Perhaps she understood compound interest, and what side of the equation was most profitable?                 

Midwest Bank Center. Ask for Eric Whitford.