All Forum Posts by: Bill Snyder

@Jeff S has the answer; this is not a "real estate"  situation, this is a "starting a business" situation.

 https://www.steelsupplylp.com/...

 https://www.mbci.com/products/...

In addition to the Phase I and the ALTA, it is a good idea to also get a Zoning Compliance Report. Depending on your team, I've seen the ALTA provider also offer that, you can coordinate with your architects, or you can work directly with the municipality.

It is particularly helpful if you are making renovations or development changes to an existing structure where zoning regulations may have changed from the existing structure to the present alterations.

I have an existing business partnership that has done very well. It's a commercial development, and the existing structure is that my partner and I are equal 50/50 owners in the entity and split equity investments into it, and profits out of it. The rub is that I do 100% of the development/operation of the business. The upside is that I have taken the company to exactly where I want it to be, the downside is that I do all the work.

So, new opportunities moving forward; I am 100% responsible for finding them, structuring the deal(s), project management, development, operations, everything. The existing partner will (again) essentially be a silent partner and we contribute equal capital funding.

What is a better way to structure the business entity to reflect unequal involvement? I talked with them about giving me an additional equity stake to cover my additional contributions, but they are not interested as that would give me a majority position.

I am not opposed to "going it alone", but there are decided advantages to, essentially, being able to double cash in amounts.

What are you able to bring to the project other than a "great idea"?

-What expertise do you have?

-What equity can you swing into this deal?

-What is your prior commercial development experience?

-What due diligence have you done on this project?

-What is the dollar level of development "deals" that you have completed to this point?

-What do the financials look like on this deal?

-What network have you established to make this a reality?

-Basically, why would anybody partner with you on this?

These are things you should be able to easily articulate to any person/entity that you would pitch this project to. If you can't, maybe a $25,000,000 speculative project is not where you should start?

So, I've got experience with very large (greenfield) development; $485MM International heavy manufacturing development for a Fortune 100 company, and relatively small (greenfield); ~$1MM commercial self storage development for myself. What I don't have, is specific experience relating to brownfield redevelopment (in the $3-6MM range) and engagement/grants/funding under the various strategic and redevelopment programs like OPRA/BFRA and other, more local revitalization programs.

I am in the very initial exploratory stages of potentially acquiring a large-ish industrial parcel in the downtown area and have pitched a general concept that the controlling authority likes. In discussions, they have asked for my entity to obtain liability insurance for onsite visits (no problem), they would pay for a Phase 1 and we would split a Phase 2 survey. For where we're at in the process, all of this is a no brainer. What I am leery of at the moment is:

1. They would like to base site price on a market appraisal. This seems fraught with peril to me as it is an abandoned industrial manufacturing site with existing structures of unknown condition. My preference would be to have the site handed over for $1, in exchange for development milestones or performance metrics on the property. What are options or middle ground on this? 

2. They also want a proforma business plan of phases and developments in order to move forward on this. This seems like putting the cart before the horse to me. I really have no idea if this concept is even feasible without much more intimate knowledge of the structures, conditions, and potential costs. Putting together a business "plan" at this point is more wishful thinking than an actual plan. Again, what are options on this? I feel I need, at a minimum, a signed NDA from those involved, just to present a concept. Is it appropriate to put this under some sort of contract, at this VERY early stage, just to discuss plans for the property.

Just kinda looking for some general insights and a rough "order of operations" from those that might have some relevant experience. This specific scenario is not in my area of expertise.

It's too bad you are not in Michigan; I've got the perfect property for you and would even offer terms.  Four acres, I2, w/existing house and landed utilities. I got it last year at tax lien auction for cheap as a favor for someone, but I have no clear path for it.  ;)

As to your specific problem, if you have established business financials, I would look at shopping around and talking with lenders to see about a cash out refi on the business, and find out if that would meet your needs to fund site development.

And what is that reason??

 If you don't know exactly what the situational factors were as to why a prior business did not work, them you can not blanket statement like this.

The true investor will do their due diligence on ANY potential deal and weigh ALL the factors.

Before you plan on in-sourcing dry cleaning; make sure you are well aware of the rules and regulations pertaining to that industry. There is chemical use that you need to be aware of and maintain compliance.