All Forum Posts by: Alex Hymanson

@Henry Clark Thanks Henry.  Appreciate your post.  I'll continue doing my diligence, using your posts as another guidepoint.  Will reach out with any questions in follow-up.

@Ronald RohdeThank you!  

@Bruce Lynn Thanks for this response.  Appreciate you sending along the book recommendations and people connections.  I pinged Henry on the side to hopefully connect.

Do you know of more properties that meet my buy box (1 hour outside of Dallas, cash flow year 1, <$500k)?  I'll ping you on the side to talk more.

This property is located just outside of Lufkin on rt 59.  Based on analysis, I'd be cashflowing day 1 and there's some value add potential.  I'm looking to enter this asset class at a smaller price point to learn it more.

@Pat Aboukhaled thanks again for your response too.  Will ask lenders bout prepayment penalties and refinancing options as well.

Alex

Hi Pat,

Amazing response, thank you so much!  Appreciate you taking the time to outline these thoughts.

I have not spoken to local lenders or contractors yet, as I'm still in the preliminary stages of evaluating the opportunity from a numbers perspective.  Lending terms will be important here.

I'd say the biggest challenge thus far is making sure I feel comfortable managing this remotely, as it's located about ~150 miles east of Dallas.  It's in a rural town so I'm also worried that demand might not be as high as in more densely populated areas.

I'm planning to call local banks this week to understand financing options and contact some contractors who might be interested in building additional units.  I also need to call the town to determine how many more units can be built on property.

What other risks am I not thinking about that might be helpful to consider?  Thank you!

Hi! Evaluating a self-storage opportunity and would love folks' input on a few questions that I have, below. Really appreciate any insights that you can provide!

Questions:

- Commercial Loan - what are the best terms to target? The purchase price will likely be <$500K if that changes anything.

- Value add - How much does it cost to build additional storage units? These currently aren't fancy units.

- Value add - When building additional units, what steps should be taken to determine how many can be built? Is it based on town zoning? Surveys? Something else?

- Value add - How much does it cost to convert Non-climate controlled units to climate controlled units? Is there typically an ROI?

- Value add - What other types of value add is typical for self-storage?

Hi!  Evaluating a self-storage opportunity and would love folks' input on a few questions that I have, below.  Really appreciate any insights that you can provide!

Questions:

- Commercial Loan - what are the best terms to target?  The purchase price will likely be <$500K if that changes anything.

- Value add - How much does it cost to build additional storage units?  These currently aren't fancy units.

- Value add - When building additional units, what steps should be taken to determine how many can be built?  Is it based on town zoning?  Surveys?  Something else?

- Value add - How much does it cost to convert Non-climate controlled units to climate controlled units? Is there typically an ROI?

- Value add - What other types of value add is typical for self-storage? 

Hi all - Wondering about a creative financing situation..hope someone can help!

I've come across a potential deal with an assumable FHA loan at ~3% interest rate on a $600k property. There's about $350k left on the loan, so would need to come up with $250k to assume the current loan. Are lenders out there that would lend on a 2nd mortgage for a piece of the $250k that has been paid off? If so, are there any stipulations to be aware of? Thanks!

 You are absolutely correct.  This is exactly what just happened to me.  The seller showed me the comps she looked at to evaluate her property and they were all active listings sitting on market for 25 - 100+ days.

I wanted to begin negotiating and she wouldn't budge.  So she said, "If it sells it sells, if not I'm still making money each month."

 @Greg Scott She's asking $460k and a property manager / agent said they would have listed it for $400k, so it's a bit overpriced as of now but a good opportunity because not on the MLS. If I could get the property for $380k - $400k, my numbers would work well.

@Brad S.

This is really helpful, thank you!  And thank you for acknowledging that this type of situation could create opportunity for an investor, as I completely agree with you (and is why I'm attempting to pursue the opportunity).

I spoke with a local agent and property manager (who I'd likely use to manage the property) and she said the price should be a bit lower than the asking price.

If I create this "story" based on comps and bring it to the bank/lender, would that provide enough support for them to give me a conventional loan based on an appraisal?  In other words, do I have the ability to pursuade the bank/lender into giving me a loan?

As you can see, I'm new to this "non-traditional" approach, so seeking advice / guidance from the forum.

Thanks again.