All Forum Posts by: Craig Rismiller

It is really great that it seems like you have done your research and wrote a business plan - but quite frankly there is a lot of fluff in your post and nothing to get a potential investor excited.

It may help to be a little more direct in what you are looking for and why we should invest. For example....

'I need a passive investor to fund rehab / flip deals in the greater Chicago market.' or even better 'I have a house under contract in Schaumburg. Purchase price $150k, rehab $30k, ARV $260k - I need a partner and we will split profits'

For the trust compononent - just be honest. 'You should trust me with your hard earned money because I have done xyz.' Even if this is your first deal - you can show you are trust worthy / know what you are doing if you have surrounded yourself with the right team

Good luck!

Just took a quick look - where do you see comps selling for $3M+ in that neighborhood? I don't know the area at all but a quick search on zillow didn't show any solds at $3M+ in the immediate area.

Do you have addresses of the comps?

Awesome place! If the rehab estimates and comps are accurate this could be a slam dunk.

This could be a great BP syndicate - who is Texas could handle this?

Great question. We have not personally done spec builds so this is a little out of our territory.

Early on in the permit process - we had a local builder give us a 'pre-bid' on the project in the $735,000 range (no permits, soft costs, etc.) which comes out to $65 psf. Since we have never used that builder we also priced out some of the sub's ourselves and we were coming up with a bigger number - but honestly at that point we realized we were out of our league and decided we were going to follow through with planning and then sell.

I know some BP'ers are still building in the $65 to $75 psf range so I would think it could be done in that price range if you have the right contacts. And given you are ready to start moving dirt, I total construction time should be under 9 months.

We have already invested over $50k and ~12 months in getting the drawings, permits, engineering ready to go - its just a matter of a developer having the right cost structure to complete the project.

Here are a couple of scenarios:

Build Cost (11,200 sq. ft @ $70 psf)= $785k
Soft Cost (Interest, Insurance, Taxes) = $35k
Land / Permits = $450k
Total Project Cost = $1.250M

Rental:
$1450 rent / unit
$80k NOI (35% expense ratio)
Value at 5% cap (pick your poison on the cap but this seems to be in-line with in-fill higher end properties): $1.6M - 80% ARV

Condo Exit:
$150 psf ARV
$1.7M ARV
75% ARV

Again these are just rough numbers and you should do your own DD. Inventory is tight in the area and very little buildable land is available.
Value

Phoenix Developers / Contractors....

We have a .5 acre parcel in Central Phoenix (7th St & E. Roma Ave.) that we have decided to sell. We were going to do this project ourselves but my PHX based partners decided it was too big for them to take on at this point. Here are the details:

- Deawings, engineering and permits are already complete for a 7- unit multi family project. They are all 1600 sq ft, 3 bed 2.5 bath, 2 story units that will make fantastic rentals or convert / exit as condos.

- If you keep as rentals - rates are all over the place but newer / higher end communities are going for $.90 to $1.00 psf

- Condo prices are also all over the place but in the complex we own right next door, the 1 remaining OO just had a BPO of $225k on his condo that is now 7 years old and slightly smaller at 1400 sq ft. This street is in a fringe neighborhood that borders the very high end Biltmore area where condos are $200+ psf

- Parcel was just listed on the MLS last night for $450k, which includes the land and building permits that would let you break ground tomorrow.

- I am a principal / owner in this property so I can make decisions. PM if you are interested and we may be able to work on the price, consider seller financing or maybe even a JV if the terms are right

I wanted to share with the BP community that I had a great experience working with fellow BP'er @ stevehamilton during this tax season. He did our taxes for our rental properties and I was impressed with his eagerness to answer questions, general RE knowledge and competetive pricing.

We are both CHI based but believe or it or not we have yet to meet in person (goes to prove you don't have to live next to your accountant)! Thanks again Steven and we look forward to contiuing to work with you.

The big funds didn't stay away from Maricopa today! I just checked the statistics and the $33M in liens sold for an average 3.8%...

Needless to say the 8 bids that I placed on vacant / tear down lots in our target zip codes didn't work out too well. For example, 3 liens that I bid on for a mobile home park sold for 2%,3% and 4%...unreal given you have to wait 3 years to even start to take back the property!

@Aaron Montague

Whats the total investor cash needed for the deal? Is $40k the total purchase price or is that a downpayment for a HM loan?

@Annette Hibbler

Though I will yield to the experts on BP on the specific laws, here are my general thoughts...

It appears that you and your company are doing very well in building your turn-key business in Detroit. It is obvious from your posts that you have mastered the art of marketing and it appears you have created a pretty healthy international buyer list (Detroit is not my cup of tea but I can recognize the appeal for some buyers).

With that said, why in the world would you even risk affiliating your company and brand with a company unless you are 100% confident that what AND how they are seeking investors is 100% legal? I realize you did not develop the marketing materials or the program, but by linking your name you are basically telling both your investors and the world through these public forums that you approve and are confident in the program. You and Richard may be the nicest most honest individuals in the world, but IF investors get burned from this program, my guess is you will be getting calls from both lawyers and regulators.

To me, it seems really silly to open yourself up to reputation and legal risks just to earn a small referral fee...but in the end that is your decision...

"We are an INTERNATIONAL company with many clients in Europe, Asia and Australasia. We are acting as affiliates for Colonial Capital. We do not own any of Colonial Capitals assets nor do we profit from them. As affiliates we make an agreed referral fee, full stop."

Yes, but you will likely have to pay income taxes on the interest income, thus the interest deduction is a wash. This sometimes happens with partnerships where one partner will loan funds to the business instead of both partners doing equity contributions. The partnership would then deduct the interest expense but the partner lending the money would have to put that income on their individual tax return.

I am sorry, but you can't do this to try to fool the IRS!!