All Forum Posts by: Henry Clark

OP

20 minutes of driving thru Memphis on a Friday morning going to Pensacola.  35 miles per hour people were weaving in and out doing 60.  Pulled up to a full red light and 4 cars blew thru it.  Might have been in the wrong neighborhood but it was a Main Street.  Sure there are good parts to Memphis.  I grew up in Louisiana and lived in some rough neighborhoods, but this was over the top.  

OP.  Describe the piece of ground, size, zoning, current use, how “fast” will this property sale ant the right price, property you would buy how fast can you buy?, etc.

Stop by a 1031 Qualified Intermediary and have them walk you thru the rules and timing.  Ask them about cost and also ask about a Reverse 1031.

I have done one reverse 1031.  Although it did kick the can forward.  Was stressful with the timeline on the sale.  

Good luck on your transition  

OP

I vote yes to the following.

1. WHY? REI. Have a forum section on WHY? Shout out to Nicks Boathouse in Pensacola. Eggs Benedict with crab. Best Green Fried Tomatoes I have ever had. Paid for by REI both money and time.

2.  View count on posts.  Other forums do.  You do on blogs.   Helps me tell which topics are more interesting.  I have found most BP members don’t post.

3. Podcasts- use more of the posters on the forums. To me they have street cred. If you post 100s or 1000s of post the BS shows thru. Or you're the real deal. I have watched 3 podcasts in my life. Of the mm BP forum users I will watch more of the BP posters who have given freely to the community more than other REI celebs.

4.  Improve the lookup function.   Even if I type my name in and the post title I wrote it won’t pop up near the top.

5. AI baby. Is REI or the S&P 500 best. This is an old topic that keeps recurring. Which it should. Start having an AI response even if it has a disclaimer this may be wrong. Or what is the best REI market. Everyone should know, it's where you live. AI a response then let the conversation begin.

Monetize- after day 3 of a post reference paid for material or advertised material.  Or podcasts.  There is so much material on BP now.  Direct the person so the connection is made.

As a former Controller and CFO I always prioritized profitability and Customer experience when viewing our companies directions.  Learn to monetize the above comments.  As a PE firm you have a 3 to 5 year horizon.  Glad to help you improve my experience on BP.

Keep pushing the dream of WHY?

OP. If I lived in town.   Raking leaves in the fall and bagging.  Charge for hall off.   

Cleaning gutters in the fall.  Charge $100 minimum and xx over linear feet.   Charge extra $70 for two story.  Charge xxx for three story.  

Raking leaves use a yard sweeper.   Charge by the bag.  

OP.  We do Selfstorage and country subdivision development.  No issues as long as your lender is part of your team.  Don’t chase 1/4 point.  

1.   They already get our finance records and tax returns. 

2.   They have records of all our wealth, assets and debt.

3.  They already have a deal analysis.   Even if the project changes.

4.  Timing we use a working line of credit to move fast.  

5.  Downpayment is on the investor.  

6. Terms- since commercial 3/5/7 balloon. Since we have history we ask for a 7 year balloon. Even if the 7 is a little higher interest rate we take. Our LTV by then will be in a very positive position by then. Takes one less risk off the table. Most Syndications that got in trouble already forgot the housing crisis and ARMs and set their deals up for failure with the rate hikes.

7. Conservative deal analysis- we do our expected deal analysis.   Then we show stress tests on occupancy and capital spend.
 
8.  My biggest screw up has been forgetting interest during development.  Corrected that by adding to our standard deal analysis.

9.  Local competition.  Always show competition rates, occupancy and potential for their growth.  

10.   Plus we send quarterly updates even though not required.  

By doing the above our lenders are very comfortable with us.  Make them part of your team.  

My brother at his house in Italy.   This is due to my relationship with our banker to do a deal for him.  Make them your team.  

OP

Depends on where you are on your cash position.

If at the start go low cost.  In Texas look at all of the “Offlist Sales Tax properties”.  Get started with $5,000 to $10,000.  Do your thing

If you’re trying to do lots.  Look on mls or loopnet.  Look for the oldest listings.   Look for Nasty properties.  Also Look at farm sales or auctions.  

Sweet spot between homeowners, farmers and developers.  Look for 20 to 80 acres.  Homeowners normally won’t buy larger acreages plus build a house.  Farmers want larger acres.   Developers want larger acres.

Nasty is relative.  Look for something with a lot of hills, trees, valleys or ditches.  Preferably more than one access side for entrances.  Less driveways to build.  

Leave the trees.  Make a bunch of ponds. People like trees, water, views, walk out basements, isolation.

Check on water.  Road access. Smallest acres you can subdivided.  For this as mentioned above would not do less than 5 acres.  

Recommend you stay away from building any structures.

Use the lookup on our two posts.  Silver Springs subdivision and Journeys End.  

Your target is a minimum 100% cash on cash return or don’t do it.  Over a 3 to 5 year period.  Ask your local RE agents about the market for this product. 

Make sure you have water.  Buy someone a six pack that can do water witching. 

OP. Please use the magnifying glass lookup.  Search S&P 500.  Read all of the posts.  

If this is your first investment and you were to lose money.   It is a better investment than a S&P 500 index fund. 

OP

Stay local.  Ask a large Commercial Realtor who they recommend for Real Estate.  Then ask both the realtor and the accountant who they recommend for legal and commercial banking.  Since you’re in Texas.   Move your personal accounts to Frost bank.  Meet and start getting to know their commercial lenders.  Tell them your plans.  Also ask them for the team above. 

Shout out to Pensacola BP folks.   Great

Place.   Down thru Tuesday dropping car off for our son taking 3 month Navy training.   Let’s hookup if you want to talk Self Storage or Country Subdivisions.  Or Teak plantations.  

Y’all have a great lifestyle down here. 

OP we are past our number so the following is just for scaling considerations.  

I have one town I would build 20. 300 unit Selfstorage locations. At $10mm with Comml loan at 25% LTV or $40mm investment. Would hire 1 person for $100,000 per year to follow my instructions for 4 years. Would sell all of these starting at year 3. Would get the original $10mm back plus $30mm less taxes, say $20mm.

Then I would go to the East coast and take the $30mm at 25% LTV or $130mm asset. Around 3 major NE cities. Do the same thing with 2 hires this time. Sell again. Get the $30mm original plus $90mm less taxes say $70mm.

Now I would take the $100mm and divide into 3 investment approaches. 

A.   Would take on the large Self Storage REITS at the major West coast cities SD, LA, SF, WA, OR with a new disruptive business model.  Develop a $500mm business.  Sale after 3 years.  Have the previous 2 managers manage. 

B.   Would track down two guys I know in the Music business.  Take his idea and get Ticketmaster to back.   Develop a $1bl business worldwide.  Sell 2 years later. Hire prior business manager to manage.

C.  The last $33mm would invest in Belize Teak plantation development.  Harvest 25 years later and process for wholesale for $500mm and sale into the India, China and Europe market.  Have my current plantation manage.

I would be on this island all this time doing FaceTime with them.