All Forum Posts by: Brock Hoffman

@Amber Douglas

If you are confident in renting the 6 unit and have funds to carry you through the rehab and lease up then it all comes down to the numbers. Be honest with yourself about the numbers and be conservative. Moving the numbers to make the deal work does not make for a fun investment trust me.

As far as the plumbing goes I would get it scoped and get the plumbers honest opinion so you know up front what it will cost. There probably is a big $$ reason that it hasn’t been fixed and that the property has been vacant for several years.

Good luck!

You need to gather information about the property especially income and expenses to do a good analysis. Financials from the seller are a great place to start. Look for similar hotels nearby that you could call and get rates from over the phone and see how that aligns with your prospective hotel. Who knows maybe the owner/operator would be willing to share more info as well. Cap ex expenses are always a concern and looking into big tickets items such as hvac and roofing conditions are a must. Be honest about expenses and repairs when you do your analysis. Good luck!

@Anthony Spera

I would start by going to the city department that is responsible for defining redevelopment areas. See what there policies are. Cities are usually transparent with that sort of info.

Brock

@Michael A.

Lots of good answers here. I would add ask other landlords that you know if they have any contacts. Go to Sherman Williams and ask them for painters/handyman contacts I met my contractor this way got several names and found a great one. Are there any votech schools that need a project? Hope you find someone to help you asap.

Brock

@Spencer Gibson

Hi Spencer,

See what terms work for you by doing some underwriting. You could create different scenarios where you run your business out of one unit and rent out the others. Does your business have to be on the bottom unit? That’s where you would get the most revenue as a landlord. Can you purchase the package and sell the parking lot or one of the parcels or sell two parcels and use the profits to pay for part(or all)of the one you keep? Can you buy the package and sell all 3 parcels individually and make money? Can you sell all 3 and do a lease back for 20 years for your business in one unit to lock in terms? Lots of exit strategies especially if the seller will work with you on seller carry. Once you have underwritten several options go to the seller and see if he is willing to offer terms that fit into at least two of them hopefully more.

Just some thoughts to chew on

Bonus thought: get a partner or someone you know to work with you bc part of a good deal is better than none.

Brock

@Henry Clark

Good insights here thank you. Got some research to do and leg work to see which thoughts are plausible.

Thank you,

Brock

@Henry Clark

It is 15,000 sq ft. 3 floors each 5,000 sq ft. There are 8 parking spots(fcfs) in the front and 8 private parking spots in the back. Behind those is a fcfs municipal parking lot that can hold 40 cars. There are additional spots in the front area that are fcfs as well but are not directly in front of the building. The building is in chickasha Oklahoma and the population is 16,000. The 1st floor is split between two retail shops, 2nd floor is 12 office spaces, a kitchen and two restrooms. The third floor is similar to the second. There are drop ceilings on all floors.

Thank you,

Brock

Hi BP,

What are some ways you keep expenses low in an office/retail building? I have heard updating the lighting to led is a huge savings on electric bill. It’s a 1930’s building w retail on bottom floor(they pay utilities and repairs) and office space on upper two floors(owner pays utilities and repairs.)

Bonus question: what do you do to increase your income? Built in annual rent increases? Vending machines? Shared office space(rent by the hour with a monthly fee?)

Looking forward to gaining knowledge from y’all’s experience and putting it to work.

Thank you,

Brock

@Ronald Rohde

There is access door at the front of the building that opens into a hallway to the elevator. Want a lock on this exterior door as well as the second floor exterior door at the back of the property. Want easy access for the tenants and ease for myself/property manager to control access. Was thinking that regular key access would be sufficient to the offices on the interior doors but if there is something that is better and is still cost effective would love to hear more. Thanks for the suggestion going to look up that brand now.

Thank you,

Brock Hoffman

@Melissa Steinour

Hi Melissa,

You can do it either way. You can assume an amount and add it to the lease creating a higher monthly payment which is easiest for tenants. Draw back here is that they might not be conservative of the utilities since they are not paying for them above a certain amount.

You could bill back the tenants once you get the bills and split them down the middle or on a sliding curve if one tenant is a 1 person household vs a 4 person household in the other unit.

RUBS ratio utility billing system.

You could also pay to get the electric/water separately metered however that comes at an expense. You could get quotes from local contractors to see if it is worth your while.

Good luck!

Brock