All Forum Posts by: Alan Daniels

@Ronak Shah Thank you very much!

@Michael Wagner you must have visual's on my desktop.  lol.  Just got your e-book and spreadsheet from your website!  Good stuff.  I appreciate your thoughts.  

@Stephen L. In his words, "I have no idea what this thing is worth".  I'm following up to ask him how he will determine if an offer is acceptable or not, and hopefully that will give me more ammunition.

@Ronak Shah  Thank you!  I hadn't thought of it that way.  To ensure I'm with you, you're saying that if annual Revenue from rent is $36k ( x5), then roughly a good offer would be around $180k.  Is that right?

I'm wondering if I paid $200k, with $25k down, 6%, 20 yrs (pmt's around $1250), it seems like a good deal. Cash flow a little less than $1000/mo. It's relatively small, but at these #'s, my COC rtn is 48% ($12k/$25k), 5.6% GRM. /i'm just a little bit short on the $25k.

Happy 2020 to all!

I've run into a mom & pop storage facility and they are retired in upper 70's (age) and willing to sell, realizing they won't be around forever.  Owner is getting older.  He currently spends about 20 min/week just stopping by to check on things.  I'm struggling putting a # together to offer - ideally 2-3 offers.  One cash offer, one owner finance, and one traditional financing.  Owner is open to owner finance if the down payment is substantial enough; again, older and want the money sooner rather than later.

-The property is on one of the top 5 busiest & well-known roads in the city, along with 8 other storage facilities (all bigger and more up to date) within 2 miles.  6 within 1 mile.  It is 3 miles from my home.

-It is less than 1 acre with no room for expansion at all, unless you go vertical.

-Owner states he brings in b/w $36k-$40k per year or $3000-$3400/month.

-Some room to increase rents, but not much at all.  Stated 75% of customers have been with him for 10+ years.

-Owner owes nothing on the property.  Has had it for over 50 years.

-No website; no books; rent roll is a notepad; no signs; no advertising; can barely see it from the road, and still at 90% occupancy.

-43 Units and 9,165 sf

-Less than 1 Acre

-I know that this will not profit very much relative to other storage facilities, but $1000+ in cash flow/month sounds very appealing from that perspective.

-This would be my first storage facility offer.

-If I don't buy it, nothing will happen with this site per owner.  Owner is not putting this "on the market".  I saw him on a ladder and just pulled in and talked to him.  As I was walking up before anything was said, he said "what, you want to buy the place?".  He said he has no other discussions going about selling with  anyone else.

Hurdles:

The trouble I'm having is valuing the future & potential of this property in order to come to an offer I can work with.  I can't find any relevant trades within 30 miles in determining a fairly accurate cap rate to work with.  This is about 30-45 minutes south of Atlanta.

Please pick this apart and share any/all thoughts. It is greatly appreciated!

Cheers!

Alan

@Andrew Postell. Good stuff! Thank you very much.

So basically just close in my name and deed it into the LLC the next day, right?

@Andrew Postell Hey Andrew, yes that is all correct. Thanks

@Bryan Scott

Thanks again Bryan! Last paragraph- Great way to look at almost anything. I’ll be getting with my Broker in the coming days. Especially in such a litigious society. Thanks again!

All the Best!

Alan

Thank you both for your thoughts & perspective.  It is greatly appreciated!

@Bryan Scott Thank you so much for so much for taking the time.  Wow!  So many good points and considerations...  You'll have to put this one on my tab. 

Broker/Realtor - this was probably the most confusing thing I'd ever come across, when getting my license.  While very different roles/responsibilities, these titles were used interchangeably in my RE book and class, given by the state. We had to continuously stop and get clarification on what they were referring to - 1) licensee, or 2) Broker. They mostly used Licensee, but would throw in a "Broker must...." and referring to an licensee.  The teacher was even stumped on how to answer "why?" Anywho, I am not a broker with my own brokerage; just a Realtor (licensed) working for/under a broker.   Regardless, I didn't and am not putting much weight on suggestions that are geared towards "not saying anything", because either way, as you mention in a different way, it comes with a "lien" on your mind.

Good point on the intermediary to handle funds.  My attorney is going to handle this now.  Thanks!

Thank you very much!

Happy Thanksgiving!

Alan

Happy Pre-Thanksgiving to everyone!  Lots to be thankful for!

I am under contract with a property I am buying subject to existing mortgage and also giving the seller a promissory note for $10k over 5 years. My plan is to fix it up, rent it out, and refi once tenants are in and house is fixed up. I need to recoup most of my $35k rehab expense thru a cash out refi. The property is being bought for $100k and ARV is around $200k. Current mortgage bal is $90k, 4%, with 23 yrs left, which is a great mortgage to have, but with the rehab needed, I was hoping to recoup those funds in a refi, even if I have to give a point or two on the rate.

I am concerned that a bank may not refi to an "LLC", or either give me a horrible terms. Before reaching out to banks, I knew BP community would probably have more unbiased knowledge & experience to share than any bank I reach out to.

I greatly appreciate everyone's time and thoughts!

All the Best!

Alan

BP,

Hope everyone is gearing up to have a great, happy, and non-political :) Holiday season!

I wanted to get everyone's thoughts on being a Realtor and what the "status quo" (for a lack of a better word) is regarding buying a property "subject to", using an LLC as the Buyer, as well as giving the Seller a Promissory Note paid out over 5 years. I want to make sure I do the right thing, as I've received some advise that seems a bit "sketchy". I know that to some extent, this is a Broker to Broker policy, but wanted to get more educated and tenured perspectives and if there are any considerations that I am likely not accounting for, as this is my first subject to transaction. Also, I live in GA and realize that this is a variable in this equation. I am buying this property thru an LLC I already have established, but does not hold any other properties under it. The seller is fully aware of all of these variables and is 110% cool with it all. I plan to keep this as a rental.

 To be more specific...

• -Contracts... Is there any liability exposure if using a non real estate commissioned P&S Agreement? It's still from an Attorney.. Basically, not using what the State RE Commission publishes for realtors to use.. Again, if you are currently a Realtor, but not a Realtor in this transaction. It is noted in the special stips that "Buyer is a licensed Real Estate Agent". My concern is sending this attorney's P&S contract to my broker and it getting ripped apart. Not that it's relevant, but I am just not a fan of the lengthy Realtor contracts, when there are no Realtors technically involved as representing anyone. They buy will be... Me - Manager, LLC
  
• -Do you have to go thru strenuous regulations regarding setting up bank account with visibility and access to the Broker and RE Commission?
• -Do I treat this transaction as a Realtor would (even though I am not a "Realtor" in this transaction) and complete a Distribution Auth. for commission that I am paying myself?... again just looking for perspectives, as I know I will work this out with my Broker.
• -If/when we put this under contract, what does it look like to use the seller's insurance to fix water damage that currently exists. Sorry, this one might should be a separate discussion. Can the seller give me something like a POA to work directly with the Insurance Company & Mortgage Company?
• I feel like I am somewhat playing both sides of the field and again, want to ensure I do the right thing.
• Lastly, I was given some advice to just not tell my Broker since there are no realtors involved and I'm buying it with an LLC... but I'm not sure that would be the right thing to do, even tho my broker would really only get about $700 in commission from the transaction.
• I also wanted to get this community's  perspective b/c I am also weighing out if I should renew my license or not...  I am not marketing myself heavily at all as a Realtor - I just wanted to get the education and access since I'm new to RE.
• As always, this communities time and willingness to share knowledge and experience is deeply appreciated!
• Thank you all!
• Alan

Greatly appreciate the thorough information, Jeff!  Good looking out!