All Forum Posts by: Bob Thomas

Hey guys - I haven’t been on this site in quite a while. I move to Portland, OR about three years ago...

Tom - I don’t actively do tax prep for people and am holding my cpa license inactive. I focus primarily on real estate investment, development and private lending.

Brian - yes, I have both cashflowing assets and development projects in my portfolio currently. 

I’m happy to get on a call and chat through any questions you guys have about real estate/taxes/etc, though I would not be giving you professional tax guidance. I’m involved in an opportunity zone fund, active syndicating mid-sized deals and am using the combination of cost segregation/bonus depreciation/ re professional designation to significantly reduce my tax liability. Happy to be a resource in any way I can. 

Not sure if you are still looking for small multi family places in the east bay, but I know a few people to connect you with. Message me if interested.

You should look at the mid market brokerage firms like NAI, Marcus & Milichap, etc). I am based in SF and know a fair about of local brokers who sell in that range. Let me know if you want an intro.

A commercial broker or appraiser can help you put one together. Many brokers will provide you with an opinion of value if you ask. Not sure the product type (office/retail/industrial/MF) or tenant profile (long term leased, near term rollover, vacant, etc), but you should dial in the following assumptions for your proforma: Market rents Leasing costs (TI/LC/free rent) Leasing downtime Initial capital costs (structural/repositioning - if any) Operating expenses Then run a cash flow analysis and figure out your hold period/exit cap/etc. Let me know if you have any questions. I was I commercial brokerage for a while and put these kinds of proformas together regularly.

I wouldn't just count it out because it's 'risky.' Quantify the risk and see if you should buy it. 

I would run your at least one set of numbers assuming Aaron's vacates. If you need to, talk to a local leasing rep to see how long the space would take to lease up and what sort of TI/commissions would be involved, and what rents you could command. 

Once you have that info, just price your vacate scenario based on a stabilized  return on cost instead if a cap rate. (i.e. Stabilized noi/your cap rate = stabilized purch price - stabilization costs = what you should pay for the deal.)

good point Brandon, I wasn't trying to get into the minutia. 

how much principle on the loans and what are your OPEX estimates for the property? Also, is the location/condition of the property good enough to get better tenants/command higher rents?

Are you trying to develop the location yourself? Or just flip the site to a developer? 

If you are developing it yourself and looking for leasing brokers with connections to national chains I would recommend getting in touch with one of the larger brokerage houses (Jones Lang Lasalle, CBRE, DZT, etc), but i'm sure local brokerage shops have connections too. 

If you are trying to flip it to a developer, look for an investment sales broker. Marcus and Millichap has a pretty solid practice with smaller, single tenant NNN investment sales listings. but bounce some ideas off local brokerage shops in your area too. They might have some good local contacts interested in buying.

Fee structure and operational complexity really depends on the size of the project (# of tenants), complexity of leases (expense reimbursements.e tc) and needs of ownership (REIT accounting requirements, frequency of reporting, leasing?, etc). In the Bay Area for single tenant NNN deals owned by institutions, I see 3% of EGR as a pretty standard management fee. In general for commercial prop management, I would structure the fee as a % of base rent or EGR though.

I suggest you consult a lawyer for an answer to your legal ramification question.

I work in commercial real estate valuation. PM me