All Forum Posts by: Henry Clark

Not sure I have all the facts, but here are some thought approaches:

a.  If you had used the full $200k to fund your 50% capital and earned $70k in three years, is this good for you?

b.  If you had taken the $200k and invested in "doors" would you have made $70k cash profit or appreciation in the last 3 years?  Assume the same type of properties as your 4 "doors".

c.  What is the time frame you would exit a flip?  Lets go extreme and say 1 year.  Can you easily take that money off the table if you choose to invest in a rental later?

d.  The eternal question, how solid is your employer?  Its like a domino house.  All of their investments and debt are tied to your deals with him.

Everything you have is positive.  I would recommend you evaluate your "risk" along with potential "returns" to help find your direction.

Had to re type my response and make it nicer.

Two things jump out at me.

a.  Your an experienced Property Manager, per your background.

b.  You don't want to be duped.

These two things don't go together.  It tells me you have never been to San Antonio.  Don't plan to come inspect the property before you buy it.  And your trusting the Seller's Broker to find you a solid investment.

Here is my recommendation. Find my Self Storage 101 checklist. Convert it to your checklist for SFH. Have other people you trust challenge it and improve it. Matter of fact, put it out on BP and have people improve it for you. Don't do an investment now.  Take this checklist against 5 properties in your local area.  Improve it and your approach. 

Then definitely go buy a property.  Good luck.  Develop a system and keep improving on it.  Your system will be more important than the deals you make.  Keep challenging it, using it and improving on it. 

Also develop a second list with contacts.  This is actually your "Team".  Again keep improving on it and asking people who they recommend.

Lets say you buy a nice ranch house outside the "city limits" and its a great deal.  There is no zoning in the counties.  I can build whatever I want next to you.  Basically learn the market.  Don't trust anyone (Seller's Broker), until they have earned it.  You will need to invest your time.  "Water systems".  Learn about "Water systems" in Texas.  etc.  etc.  I would not buy in any market unless you plan to make several deals.  Its not worth learning the market and building teams for one investment.

If you go through the above process, then contact me and I will direct you to a path my brother uses to take $5,000 or $10,000 and turn it into $50,000 or $100,000.  Don't trust anything I have said to you.  Invest the time.

@Cole Bigbee  Thanks for the posts.  We are just getting back to our Contractor buildings, thus the info you gave us before and now will greatly help.

Regarding any topic there is always the one offs.  On door height, I have run into two unusual items to watch. 

A.  Location used Roll up doors versus Panels.  Even though the door opening was 14 foot, the roll up door grew larger as it rolled up and came down into the 14 foot space, creating a 13 foot 6 inch space roughly.  This is a pretty flimsy door for that size.

B.  An RV Sales and repair location near me, has a 14 foot door space but the ground outside is higher than the door floor opening.  For outside drainage there is a slight V at the door entrance.  Some of the larger class RV's with the AC units on top, can't make it into their shop.

@Cole Bigbee  Unless it is going to be a separate topic.  Using a 14 foot door height, what are your thoughts on the width?  10/12/14 foot?  We are looking at 12 foot wide, which will handle most shop trucks.  

Thanks very much for info.

Things are continuing to get knocked out. As mentioned before I have stayed with my "Local" contractors who have build all of my prior locations. These last two projects are a lot larger than my normal one building at a time, thus they have not been able to stay on the project, due to other customers.

Getting ready to put "monument" road sign in. Basically Clarkstoragellc with our phone number. Will be a 4x8 sign on both sides. My son and his friends will then build a rectangular retaining wall around the sign posts. Three foot high, and 4 by 9 feet rectangle. The two posts will be where the two orange stakes are. Then the wall around it. Then a Lily bed. Did a favor for my neighbor who has a Lily garden. Get to go get $300 of lily plants and will use for landscaping.

The fence and gate people are working. The black ornamental fence is up front at the entrance. Along the top of the hill in the second picture is the chainlink fence. This fence was supposed to be put in, last December. They are way behind.

The Building pad folks just put in another 40 wide pad this morning by 11am. We alternated 30 then 40. They decided to build all of the 40 pads first so the concrete trucks can pour from each side. This keeps them from manually having to move as much concrete.

Road guys are also pouring today. They will be completing the Circle around the lower units. Once this dries for 7 days, the people can make a circle versus having to backup.

Well the excel file layout and color coding didn't come through.  But you can look at action items 1 thru 10 at the bottom and see the action steps proposed and taken.

I will have to monitor these weekly.  When done, I have to contact the Iowa DNR and let them know complete so they can sign off.

Met with Dirt contractor on pond and DNR rep this morning.  Verbally and visually walked thru the plans below.  They had recommended a "Riser" on the 24inch drain pipe.  The contractor put it in, and then the water backed up and flooded the lower areas of the dig.  Convinced both the DNR and contractor to take this out.  We already had sufficient erosion/silt plans in place.

Waiting on Newspaper to send me affidavit I posted a public Storm Drain notice.  Then I can apply for my Storm Drain permit.  Ha Ha, they sent me their bank check list versus my affidavit, they ran my legal notice.  That's part of "developing".  Hopefully get tomorrow, then I can file online for the Storm drain permit.

Below is the Storm drain actions steps I plan or have done to date:

Have 5 lots left to sale.  Although we put in concrete driveway entrance pads, decided to complete the driveways into the properties, to help people visualize the property better.

Below is one of the entrances we put in place earlier last year.

Now we have filled in with further dirt and rocked the roads.  Also decided to put some boulders for shoulder support and for aesthetics.  Put some at the entrances to set it off.  Boys still have to move the small rocks into the sides.  This is a shared drive for two lots.  Did put an extra turn out, in case they want to build a shed there.

The next lot entrance shot, is for a single access entrance.  Decided to put a left and right turn in.  Again so they can do a house and/or a shed.  Because there are existing trees, trying to work them into the entrances and landscapes.

Kind of neat.  Two new storage customers moving in, while I'm writing this.       

This last lot entrance is also a shared entrance.  Lot 7 has sold, we hiked the price $20,000 since were adding the pond.  Lot 6 is still available, so we filled and graded so they could drive on the actual entrance.  We are using Crushed Recycled concrete.  1 inch with the fines.  Actually don't like this.  Normally use bigger "Clean" rock for a base.  As the ground gets wet and you drive over it, it mashes into the ground forming a base.  But my local guy has a lot of this crushed concrete and it is only a 2 miles away so decided to use this.

On the dam, we put 4 dump truck loads of broken concrete as rip rap where the dam water outlet and spillway will hit.  This is to prevent erosion.  It does not have "rebar" in it, which is not allowed by our DNR group.

Lot 6 we are spicing up.  Did the entrance noted above.  Then it has a great view down the lake and is one of more expensive lots.  One of our local store's had excess landscaping rock in front.  Decided to buy some of these limestone blocks.  They are normally used to make retaining walls, But we made into a sitting area with fire pit (tractor rim).  Simple thought.  The stones are rough, but kind of elegant.  Put Engineering fabric underneath so no weeds or dirt, mixing with the Pea gravel on top, which we need to finish spreading.

With the good always comes the bad.

The downstream neighbor filed a "Flood Plain" complaint.  Not a big issue, since dams always help floods.  Also I have seen the worst flood we had and it would go over this dam, and still be about 50 feet away from their house.

Another concern might be if we use up all of the water from the stream which won't happen.  All water will continue to go downstream except whatever evaporates from a 2 acre pond in a day.  Stream has about 2,500 gallons per minute flow.  We might lose 20,000 gallons per day in evaporation on this 2 acre pond, not offsetting for evaporation from the stream itself.

We previously checked with the County conservation group and the State DNR group and no permit was needed due to the relative small size.  Based on the onsite visit, the DNR person said anything over an acre is considered a construction site and we need to do a SWPPP permit and plan for Soil silt and erosion.  Have done this before on our latest Storage facility, so not a big deal.  Next task after this post, is to document an erosion plan.  Keep a log of action steps.

Contact your state Self Storage association and ask for their standard lease agreement.  If there isn't an organization in your state, pick a nearby state.

Don’t have all the info so adjust as needed. 

1.  Keep investments and cash around you.   Use leverage as much as possible especially with interest rates so low

2.  Manage your risk.   This is a personal decision.  Either shoot for aggressive in both the stock market and the rental or just one.   I would pull the cash selectively out of the underperforming equities.   

3.  If your existing rental has both enough equity and cash flow then use it as collateral for the new add.  Don’t use cash or stock

4.  Either way recommend you separate the legal properties.  it is a lot easier to do now, than ask a bank later to split.  Banks hate giving up collateral and you may choose to use one of the properties as collateral in the future with a different bank

5.  If you don’t have enough equity in your current rental   But you don’t want to sell your stock then open a separate broker account.   Move as much stocks into it as needed and assign to the bank as collateral.  Check with the broker and the bank the degree to which you can trade these equities  

@Jay Hinrichs

On the teak.  There are several older plantings in Belize, that were planted, but not managed.  10 to 20 years old.  I was asked to help manage a property but said I wouldn't do it for "pay", but a 40% ownership interest, if we took it through "processed" lumber and not standing timber.

Most people don't "Thin" thinking they can plant and forget and they will get more "Wood" and I tell them they will, but they want more "Lumber".  Explain 10 small trees don't make as much lumber as 1 nice tree, if they had thinned.

This person is thinking about selling standing Timber; but I have tried to explain if the trees are managed right, I can log onsite, sawmill on site, then haul out lumber to kiln dry, then planing and grading.  Market into India and China.  It will be worth around 250% to 400% more than as standing timber, and I can get the equipment to do on site easily.

Do you have any reference data showing the value add, as a log goes through processing?  Standing, logged, sawed, kiln dried, planed and graded.  Will be sold as Random length.

Thanks.