All Forum Posts by: Henry Clark

Quote from @Harry Grewal:

Quote from @Henry Clark:

Quote from @Harry Grewal:

Quote from @Henry Clark:

Quote from @Harry Grewal:

Henry I would love to learn more about what to look for in terms of nastiest property

Look up loopnet.  Zone in on your buy box.  Price below $X, lot size, location, then look at the oldest first- more flexible on price, also something is wrong with it.

 For example in the middle of LA there was a horse stable for sale, near overpasses, etc.  Remember Nasty doesn’t mean dirty.  Just other investors can’t see potential.  They see a horse stable business. Subject to zoning I see self storage, parking, tow lot, semi parking, etc.  

In Omaha I saw a church for sale.  That is Nasty because most buyers can only see a church.  It’s in both a great area location and also street location.  Flat top roof not tall steeple easy to convert. On 6 acres of ground, plenty of parking.  Subject to zoning could be apartments, self storage on extra land, sell lots, etc. 

Wet spot.  I see free dirt from other construction sites filling up and now a great lot location.  

Hill.  I see fill dirt for sale.  Then a nice flat lot.  The best of both worlds is the wet spot and a hill nearby.  

Look at what is available.  Then figure out how to make money.  Excuses mean more profit.  

 Hi Henry I'm actually in escrow in a 95 unit in Missouri and today is the last day of due diligence. Would you be free for a ten minute review of my analysis?

 You can reach out but MFH is not my background.  I would just provide generic questions below.  Also it’s your last day.

1. I would have had an appraisal done. This would have included 3 approaches. A. Cost to build- which should be double now, if this property is more than 5 years old., B. Sales comparables which would be higher in the past due to lower interest rates earlier., C. Value based on NOI and cap rates. Dont trust anyone's financial projections. Do yourself.

Within that appraisal they should have had comparable rental rates, occupancy, etc.  That is the important issue

2. Capex

3.  Occupancy and rates steps to stabilize.

4.  Competition- for the same type and price point are there any new locations coming in board.

5.  Make an offer that works for you.  Buy your profit up front.  Then walk away.  

DM if you want to discuss. 

 It's a self storage facility not mfh

 DM me. Have a computer nearby so I can walk you thru a market analysis real quickly.  

Also find out what the 10x20s rent for.  This will tell me if it is an A/B/C location. This is a good size to start with.  Only do if you plan to scale though. 

Quote from @Harry Grewal:

Quote from @Henry Clark:

Quote from @Harry Grewal:

Henry I would love to learn more about what to look for in terms of nastiest property

Look up loopnet.  Zone in on your buy box.  Price below $X, lot size, location, then look at the oldest first- more flexible on price, also something is wrong with it.

 For example in the middle of LA there was a horse stable for sale, near overpasses, etc.  Remember Nasty doesn’t mean dirty.  Just other investors can’t see potential.  They see a horse stable business. Subject to zoning I see self storage, parking, tow lot, semi parking, etc.  

In Omaha I saw a church for sale.  That is Nasty because most buyers can only see a church.  It’s in both a great area location and also street location.  Flat top roof not tall steeple easy to convert. On 6 acres of ground, plenty of parking.  Subject to zoning could be apartments, self storage on extra land, sell lots, etc. 

Wet spot.  I see free dirt from other construction sites filling up and now a great lot location.  

Hill.  I see fill dirt for sale.  Then a nice flat lot.  The best of both worlds is the wet spot and a hill nearby.  

Look at what is available.  Then figure out how to make money.  Excuses mean more profit.  

 Hi Henry I'm actually in escrow in a 95 unit in Missouri and today is the last day of due diligence. Would you be free for a ten minute review of my analysis?

 You can reach out but MFH is not my background.  I would just provide generic questions below.  Also it’s your last day.

1. I would have had an appraisal done. This would have included 3 approaches. A. Cost to build- which should be double now, if this property is more than 5 years old., B. Sales comparables which would be higher in the past due to lower interest rates earlier., C. Value based on NOI and cap rates. Dont trust anyone's financial projections. Do yourself.

Within that appraisal they should have had comparable rental rates, occupancy, etc.  That is the important issue

2. Capex

3.  Occupancy and rates steps to stabilize.

4.  Competition- for the same type and price point are there any new locations coming in board.

5.  Make an offer that works for you.  Buy your profit up front.  Then walk away.  

DM if you want to discuss. 

OP skip the rental units.  As people have mentioned to scale your talking a full time job with a lot of aggravation.

Go with your sales and acquisition background.  Jump to commercial projects.  Don’t build or rent houses that has a lot of risk.

NNN properties, self storage, boat rv parking, country subdivisions, etc all near you.

$350,000 per year lifestyle.  I’m not saying to reduce.  Look at that and see how you can make money off your lifestyle in Real Estate. 

OP look at your buy box, REI strategy and approach.

You’re in Texas.  You should be printing money.  

6 acre lot in the middle of town on the highway.  Bought for $8,000 sold for $200,000.   Just mowed the grass.  

10 acre subdivision lot bought for $10,000 sold for $50,000.  Just mowed the grass.  

Looked at two lots with our nieces.  
One had a highline over it, and with set backs you couldn’t build on it.   Could put cargo containers and parking.  Price $25,000 they could have developed and rented.   They would have $500,000 appraised equity in 2 years.


Same road as above.  Dirt road they would have needed to rock for about $10,000.  Lot had the dry stream water flow going thru the middle.  Another $5,000 gets them a 1 acre pond at the end of the property.  Split in 2 lots.  Sell for $100,000 each.  25 minutes from Dallas.  

They both are nurses and didn’t pull the trigger.  They like you are looking at making $200 per month renting.  

As others have noted above you have more control and can create value yourself either finding the deal or creating the deal.  

Quote from @Harry Grewal:

Henry I would love to learn more about what to look for in terms of nastiest property

Look up loopnet.  Zone in on your buy box.  Price below $X, lot size, location, then look at the oldest first- more flexible on price, also something is wrong with it.

 For example in the middle of LA there was a horse stable for sale, near overpasses, etc.  Remember Nasty doesn’t mean dirty.  Just other investors can’t see potential.  They see a horse stable business. Subject to zoning I see self storage, parking, tow lot, semi parking, etc.  

In Omaha I saw a church for sale.  That is Nasty because most buyers can only see a church.  It’s in both a great area location and also street location.  Flat top roof not tall steeple easy to convert. On 6 acres of ground, plenty of parking.  Subject to zoning could be apartments, self storage on extra land, sell lots, etc. 

Wet spot.  I see free dirt from other construction sites filling up and now a great lot location.  

Hill.  I see fill dirt for sale.  Then a nice flat lot.  The best of both worlds is the wet spot and a hill nearby.  

Look at what is available.  Then figure out how to make money.  Excuses mean more profit.  

Nice stop in OKC. Happening town.

@Nicholas L.

What Nicholas said.

I would also develop a list of buyers and what their buy boxes are.    

You’re in Indiana.  
Leaves are falling.  Pick a 10 block neighborhood.  See who hasn’t raked their leaves.

See who hasn’t shoveled their snow after day 3.

Look on the tax GIS map and find the owner.

Find someone who can do AI searches on the GIS database.  Look for properties that have past due taxes more than 3 months, one that always pay late, ones with multiple listings ids say 15 or more, go through the obits from 1 year and beyond- not recent.  Now go get the listing.

Each of the above have an angle.  If they are not keeping up they need to sell.  If they passed away, stepped up basis,  multiple properties then a landlord- getting old they will want to sell- their kids won’t want them, etc etc.  You just have to be hungry and creative.  

You can do your LLC in any state. If you use in another State you just have to register as a foreign entity with their Secretary of State. That name can't be used in those states if already used so pick something a little off. Your LLC name can be meaningless, but then you can operate under a commercial name. Operations as xxxxxxx.

Your Operating agreement is the most important feature. Use the lookup with my name and LLC operating agreement.

Incorporate what if you die, what if you or a partner want to sell how do you value, opening bank accounts, contract signing, etc.  etc. 

Have to come back next summer.  Wow. Bourbon st cafe.   Crawfish etouffee was great.   Beats Pappadeauxs hands down plus less expensive. Headed to Texas usually wait for seafood at Pappadeauxs.  

Right off the “canal”.  San Antonio you better Pick up the pace.  

Quote from @Becca F.:

Quote from @Henry Clark:

Having been thru the corporate world, I came to understand wanting to be financially free, in charge, reaping benefits beyond salary which was good. 

To get into REI we didn't use BP or other forums. But BP is built on churn. All of us responding support churn for different reasons. Mine is boredom between Self Storage and Country subdivisions. Also responding has sharpened my deal analysis.

If I was to talk with all of these potential investors.  I would tell them what I wished I had known. 

1.  Join the military.  My entire extended family is military.  Would do it just out of pride.  But with BAH base allowance housing. $15,000 to $50,000 tax free annually.  You’re guaranteed to be a millionaire after 20 years plus have training, retirement, benefits.  Plus you got to see the world.  

2.  Texas property tax sales.  Just land.  Don’t go to the auctions.  Make offers on off sale properties. 

3. Primary residence capital gain $250,000 exclusion. Buy the worst house in a great neighborhood, do rehab, ADU, lot split.

4.  Nasty.  Invest in properties others don’t have the vision.  Not necessarily dirty.  

None of these are $200 per door in a C neighborhood.  

So understand the desire for financial freedom.  They just need to run the numbers.  Also to risk adjust the returns.  Build a Scale model and see what it takes to get to your number.  

Start small and Make Your Big Mistakes Early.  

On #3 I agree with buying primary residence and building an ADU. House hack if possible. ADUs seem to be really popular in California, depending on location. San Jose it's the first city where you can sell an ADU as separate property, not sure how the land value is divided up from main house. This is what I see younger high W2 earners in the Bay Area doing.

For #2 buying land- is that only specific to Texas? Does this work better for certain states than others?  Hold onto the land then sell myself in a few years or 20+ years and let my kids inherit it, when I die, take step up basis and sell it. I just Googled this and it said an average acre of land in Texas in 2023 is $4670, depending on location and more if near urban areas. Are the property taxes on the land very minimal? What are other costs associated with buying land? 

I know CA investors buying in Dallas and San Antonio, specifically apartment complexes and an Austin investor (who lives there) buying land to build retail. Wow... no zoning in Texas? I've never even been to Texas and I can seen the appreciation and economic growth - might need to take a trip there 

 The Texas property tax sales comment is specific to Texas.  They are the most friendly.  Key is to make offers on the offlist properties. Don’t go to the auctions. 

Shout out to you Oklahoma City posters.  At Bricktown for a late lunch. Oysters looked to good to pass up.  Everyone have a great Thanksgiving   Have to come back here for a long weekend and catch a baseball game.