All Forum Posts by: Chris Blackburn

Investment Info:

Other commercial investment investment.

Purchase price: $8,200,000
Cash invested: $2,000,000

Town Square on Broadway Salem Oregon. Mixed-use, 21 apartments, with ground-floor retail, movie theatre, food, dojo.

What made you interested in investing in this type of deal?

Under market rents. Located in an area that has significant development. Buying significantly below replacement cost. Potential for upside.

How did you find this deal and how did you negotiate it?

Adjacent to our location.

How did you finance this deal?

Swap 5/10 with no break fee in 5 years. 4.2% rate

How did you add value to the deal?

Covid put a bit of pressure on this project. Some tenants have been significantly impacted. Nice challenge and problems to solve for our team.

What was the outcome?

Still fighting- Certainly less 2020 did not help us.

Lessons learned? Challenges?

With covid- anything can happen. Have the liquidity to push through periods of rent challenges.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Tradition Real Estate AJ Nash Salem Oregon, commercial real estate agent

@Lyndon Timbang  In Oregon it requires a significant learning curve.  Covid has hit them pretty hard.   It is (and should be) tightly regulated.  The need is there.  

There are a number of business plans out there for this type of model:  https://residentialassistedliv...

We have a HUGE mansion 17,000 sq ft in our small town that could support a number of people but it is zoned single family (Soon to allow up to 4 units on it)   Oregon may be a great place for this.   A main home and then 3 of these put to the site?  boxabl   They only cost $250 a month and figure $40K-$75K for the infrastructure, SDC's and incidentals-  Great way to house hack and ad rent revenue.

https://www.boxabl.com/reserve...

I think I am going to reserve 3 or 4 of them.  They would rent out in my area for $700-$1000 a month. 

@Samuel S.  What prefab companies are you looking at?  Another option is panelized since you would be replicating the same product, same foundation, same floor system, same truss system.   I have been lookin at www.treenada.us but they are a local company doing builds around Oregon and Washington. I am looking at Boxbabl.com  Since Oregon is allowing ANY single family lot to be turned into a 4 unit build site.  The problem with 4 units is many cities will require a fire suppression system that adds $$$ to the bottom line.  VERY few construction companies are preparing for this opportunity so please do not tell anyone;)

Bring your team to the Pre-App meeting  (Now done via zoom in Oregon)   The team should be your civil engineer (hopefully local w/ experience in with the agencies)  (they have experience and can let you know when the difference between what is required and what the city/county is trying to get you to do)   Get as much data from the Civil as you can before hand- sewer location/distance, storm water, electrical, gas, roads.  Have these ready and even have your engineer do a few trail layouts.  This is a great place to build your team- invite your RE, survey, architect and potential excavation company.  You get to see how they work and if they are their to build relationships not just a job.  (if you plan on doing more of these)  You are only as good as your team since no one can do it alone.

@Steve Mandelbaum @Matt Whitney I am going to have to go with Matt in this one. Gold is great until you need to move it. Yes you should still own it. Bitcoin and crypto are just being legitimized and accessible to regular humans. PayPal, square, Robinhood now make it as easy as clicking a button to own. Goldman Sachs is biting, old insurance is buying. Ask any Venezuelan if having bitcoin as 5% of their wealth would have helped them. - Let me get my aluminum helmet for 1 minute. I think all US paper currency will be outlawed in the next 3 years (some story about the Chinese selling $ quality printing presses to N Korea that make better currency than we do). All cash turned in for digital dollars- (scary). (Remove helmet). I am back- Propert will be inflation resistant and will take care of you if you are not over leveraged.

LIHTC convert to affordable housing.  They may be able to offer $200,000-$300,000 a door to convert.  3 story  30 units.  Since it is affordable housing your rent is guaranteed.    (This is a long unlikely walk- but fun to imagine) 

Technology Convergence

I think the parking lot days are limited-  With autonomous vehicles- things are going to change in the next 10 years.  This book as a bit of a guide.  We are designing apartments around the fact that parking lots will become gardens, green space, available building space, solar or ?

I have been looking at a hybrid model that takes the project into 2 parts. The cost of building is getting more expensive.  We can allocate a portion to the affordable housing and utilize this to support the infrastructure for the market rate product.  This creates a blend of housing and helps contain some of the costs.  I have seen some Portland projects come in at $350,000+ a door and have also seen some Salem projects projects at $175,000 a door.  I think by adjusting some of the fees that could be attributed to a a affordable housing project (Developer fee) (lower) the reduced cost toward total infrastructure requirements would be reduced.  Additionally, having a team that understands the nuances, paperwork and process is a requirement.  

Took me 1.5 months to read- BUT this was GREAT considering what I was doing-

https://www.amazon.com/gp/prod...