All Forum Posts by: Account Closed

@Matt Bickham Can you explain what you mean by “under contract” and what role is “your team” playing in this transaction? 

“College”

CCIM offers useful courses. Their mission is to educate experienced commercial agents, developers, etc. 

 I'm a college of medicine professor. It's sad how much debt some of these kids have when they are done. You daughter is lucky that you are helping with it.

Who owns the parking lot? Is it written in the deed or somewhere that it is shared by the other owners? Is there some sort of owners agreement that outlines the maintenance and upkeep of the common areas? I could imagine it would be set up as some sort of  annual association fee that is put into escrow to pay for repairs and maintenance, landscaping, snow removal... Even the sewer line may be shared. I have no experience it this kind of project so there's a good chance you can ignore all this.

Important things to look at: 

How many years are remaining on the lease, it's really expensive when a commercial tenant leaves. It can take a couple years to find a new tenant and when you do, there will be TI (tenant improvement) costs.

Does the rest of the complex seem to be on an upward trajectory? or are other tenants in the complex likely to be leaving?

How old is the doctor. Doctors can shut down the practice when they retire. Or they can sell the practice which does not mean the new operator will stay in the same place.

I started 12 years ago when I was about 50 and have exceeded your goals. My kids went to the most expensive universities they could find and are debt-free. I still have my day job. Here are my thoughts: 

Old people need to keep risk at a minimum, so I disagree with those who promote the zero money down or oven 20% down. I recommend keeping your LTV, which is the amount of money you put in divided by the bank's appraised value (not what you think it will sell for), at or below 50%. This obviously reduces your cashflows, but you will immediately have equity that can be passed on to the kids. Note: I've done enough for my kids and they earn a lot more money than I, so my goal is to spend my last penny on the day I die :)

Pick a single investment strategy and stick with it. You will get things done faster and more cheaply if you do the same kind of thing over and over. For example, you might pick a strategy everyone calls BRRRRRRR where you would you would develop nice cashflows and create a lot of equity that can be passed on to the kids. I wouldn't refinance though. You'll lose your cashflows and leave the kids with the debt.

GTG

Respectfully, you are kind of polluting the Commercial forum by reposting the same information over and over again using slightly different titles.

For a new person, I think it's important to put this activity in the context of the rest of your life. These books are not specific to RE, but are good reads.

The Richest Man in Babylon

Think and grow Rich

I like my day job and it never occurred to me to quit. I hire contractors and have a property management company so, while far from passive, it's doable and I'm doing OK. I'm not allowed to use our personal money, so the rate I expand is dependent on current cashflows. If I were to quit working, I'd start living off the cashflows and would drastically reduce my RE growth rate. 

All that said, I'm planning to retire pretty soon. Go figure