All Forum Posts by: Bob Langworthy

I do and I think it is a good idea in general. Like others have said, it's a form of networking. I want people to know that I am interested in real estate. My situation is a little different, because it's my own business and I don't have to worry about losing my job for having the appearance of a conflict of interests. If real estate doesn't compromise your day job, I think you should absolutely talk with people about it. That may be the way you find your next deal!

My plan is simple: buy a DeLorean and install a flux capacitor.

I would be concerned about infrastructure, the rule of law, and property management. I was talking with my kids track coach last night. His wife is from Puerto Rico. None of their friends or family down there have power back yet. The island has such huge fiscal problems, that maintaining the electrical grid was a low priority. They need an enormous amount of capital to build a grid that will last. There's such a huge variation from island to island and nation to nation in the Caribbean. It would require a lot of research to fully understand a specific market. Having said that, one of my goals in the next 10 years is to acquire a tropical vacation rental property. We have enjoyed our times in the Caribbean and often stay in a vacation rental because we are a family of six. As with any real estate investment purchase, let the metrics drive the decision.

Here's my two cents: 1) Don't make any new friends. 2) Move very slowly into real estate. 3) Read A LOT. 4) As others have said, define goals for yourself. 5) Develop a team of advisors. They should be individuals with a lot of experience in real estate. If I were in your position, I would be looking for people with at least 2 to 3,000,000 in income generating property. I try to model my business practices after successful individuals and not take random Internet advice. And yes, I appreciate the irony of my own statement. Congratulations on realizing a big payday. Now it's time to make that money outlive you.

The oldest of our four kids is just applying to colleges and it has been very eye-opening. Because we homeschool our kids we had her start taking the SAT and ACT early. What we have realized is that there is a lot of merit based scholarship money available. We don't qualify for need-based assistance, so the merit based scholarships are crucial. She got a 34 on the ACT and has a 3.917 GPA. Colleges are throwing money at her. It is definitely worth having your high school freshman begin taking and getting used to the standardized tests and studying for them. She used Khan Academy as well as cracking the SAT. It is also worth applying to multiple colleges. She is applying to 17 schools anywhere from the University of Maine to Princeton. All colleges have a net price calculator on their financial aid pages and it is fascinating to see the huge differences in net price. Turns out that schools like Vanderbilt, Princeton, and Johns Hopkins are much cheaper than you would expect. One more tip: the SAT and ACT are not intelligence tests. They merely test your ability to take that particular test which makes studying for them well worth it. Hope this helps!

I agree with Mario. I appreciate that taxation is complicated, particularly if you aren't an accountant. But a good accountant would be able to handle virtually any Real estate transaction. And a great accountant will either find the answer or refer you to someone else.

Would there be one receptionist to answer the phones for all? I was in a business center set up like this for seven years before purchasing my own commercial building. Receptionist was officially an employee of the owner but answered the phones for all of us and she processed our mail and greeted our clients. It gave sole proprietors a very professional look. To sweeten the deal, the owner had a commercial copier installed, furnished the office, and didn't charge extra for utilities, phone, or Internet. It was all worked into the price so you didn't get nickeled and dimed to death every month. It was a great set up and I only moved out because of the deal I got on my own building and the long-term goals that I have. Office leases were the highest in town, but when you factored in all that you got, it was a great deal. I used to joke with the receptionist that I paid for her and got the office for free. Something as simple as having a receptionist to answer and screen phone calls can make a huge difference in the life of a solopreneur. To come up with rents, you would need to know the typical utilities for the building, average office lease prices in town, the cost of a receptionist and phone system (if you were going to include that), mortgage, insurance, RE taxes, maintenance, and vacancy rates for the area. Your vacancy rates might be higher than typical if you go with the full service approach that I described. Without the receptionist, however, your vacancy rates would probably be lower than average. Around here there are a lot of small business owners that are a one person or two person show that just want a small office outside of their house or they can work quietly and meet with clients. Once people find out that they can just rent the conference room by the day, you should get some revenue from that as well. You should also look at leasing out extra parking places if that works where the building is located. Hope this helps!

@Mitch Howard that's a great question. The answers will vary widely, but I'll speak from my experience as a property owner and as an accountant to real estate investors.

First, my own situation. When I bought our commercial building I made a list of everything that would need to be done to it (roof, renovating, two units, painting one unit, inadequate AC, etc.). I then prioritized that list and took care of the items that we could afford. I am left with a list of expenses that I will need to incur in the next year - 3 years. This gives me a savings goal and as I build up cash I can start to chip away at the list. This summer, for example, I had saved up enough to put in a 3-zone heat pump system to address the AC for 1/2 of the building. In addition to those items, I keep a buffer of three months of expenses in my checking account. I don't use a separate account for saving, but that's not a bad idea.

Second, real estate investing clients. I have seen clients handle this many different ways. I have heard the 6 months of expenses rule and I think that is a bit much. If you buy a property in a good market, that has a good rental history, and is fully-occupied, you might only need a 2-3 month buffer. If you are buying a vacant property, you might start out with more than that and over time, deplete the savings down to 2-3 months. Regardless of the amount of a buffer you keep, I find it helpful to think about scheduled maintenance projects separately. The buffer is there to cover vacancy and emergenecies, while the savings is to take care of those projects that you know you need to.

Regarding a separate account, not everyone does it that way, but if it helps you to see the money in a separate account then it's probably a good idea for you.

Hope this helps!

I'm totally fine with BP charging for memberships, forms, etc. I want them to be around for years to come and that requires $$$!

Welcome to the community! I saw that Southern Maine was #60 and was relieved. If we were ranked higher, we'd have even more competition. My advice would be to be patient and wait for a good deal. You my be able to find a property that's off market. I waited for more than 2 years before finding my commercial property in Brunswick. It was well worth it. In the meantime, enjoy BP!