All Forum Posts by: Greg Dickerson

Hi Kimberly - What are the numbers?

Hi Darius,

What would you like to know?

Matthew,

It sounds like your ultimate goal is to build passive income and become a full time investor correct? If so you do not need to tie your personal residence into that plan. You can but it not necessary. House hacking is great as you can offset or even eliminate your mortgage payment through rental income on the adjacent unit but you can also do that by owning other property. There are lots of creative no money out your pocket strategies to buy rental property to get started, including multifamily which I recommend over single family. Keep reading and educating yourself on creative financing for cashflow and wholesaling to generate cash to invest.

It all depends on the size of the assets and the income. In general mobile home parks are much easier to operate and control whether in state or out of state if you do not own any of the homes, which is the only way I do those deals. 

Larger self storage requires employees, marketing, systems etc. Mobile home parks that are pad owned only do not require on site management although you can have one.

I would take a pass and wait for the owners to capitulate. Eventually they will come around if the building is a drain and they have no offers. 

Ask if the owner will finance the building 100% short term until you complete the project. Then you can refi and pay them off or sell.

Hi William,

In answer to question number 1,Yes a longer lease term is generally more valuable and looks better on the balance sheet as long as it is with a creditworthy tenant and the lease rate is at or above market values in your area. Also the type of lease maters, triple net is more valuable.

As for your second question I would assume your partnership agreement states that all members must be bought  out or can buy in at market value determined at the time of the transaction. I would recommend getting an appraisal and talking to an attorney for a third party disinterested opinion to make sure the agreement and new structure is fair and equitable..

Hi Maria,

 You should definitely get a couple of opinions as they could vary. Try to seek out engineers who specialize in soft story projects. Preferably larger reputable firms.  We could also talk to the other building owners who had to do the same thing.  You can also talj the city Engineereing department and get there opinion.

 Bottom line a professional engineer has a license and insurance and will certify their work but opinions sometimes vary. Better safe than sorry.

There are a lot of steps to that process and you need to make sure you do not purchase the land until you get all your entitlements. First step is to determine the highest and best use based on location and make sure you have the zoning. You can get a lot of info from the City or County about what can be done on the property. 

The biggest consideration is location. That will help to determine the highest and best use of the property. I am in Charlottesville, VA and would be happy to discuss further with you. In the interim here are the answer to your questions.

1. Should we secure lease commitments before contacting engineers/contractors? 

You will not be able to get any type of firm lease commitment without complete plans and approvals. You could get some interest stirred up but no hard commitments.

2. What are some companies that could potentially be interested in leasing in this space in Fredericksburg, VA?

Again location will determine that.

3. How to properly analyze ROI before construction?

You will need to determine highest and best use first and then back into the numbers.