Hello @Chris Newman. I appreciate your thorough explanation and I read, and reread it multiple times, as well as the link to your post explaining your niche in even greater detail. Along the way I also looked at the SnoCo documents explaining TDRs and viewed SnoCo zoning maps. Obviously you took a lot of time to craft your reply and I wanted to make sure I was familiar enough with your ideas before writing back. I hope this extended study did not cut too much into your need for speed with the foreclosed property.
A few questions. First, you initially were developing a TDR niche and later realized how you could work in MB as well, thereby double-dipping on all the land hat you purchase. So is your plan form this point forward to purchase land that can be approved for MB credits (after you harvest the TDR) and is that what you mean when you say in some cases the land is worth more AFTER harvested? It seems you think MB is exponentially more valuable given that you said it makes TDR look like a "roadside lemonade stand" in your other post. Or is there some other means through which the land would increase in value after harvesting?
Secondly, a question about the transfer ratio of TDR. When you say 1 SnoCo Ag Sending becomes 8 Receiving when they're cashed in, does that mean the receiving end has actually purchased 8 credits? In other words, if a project required the receiving end to purchase 64 credits before building, would they only have to purchase 8 from sending and it becomes 64?
Third, I'm not sure I'm correctly interpreting the calculation of TDR credits for a sending site section in the SnoCo TDR bulletin http://snohomishcountywa.gov/DocumentCenter/Home/View/8118, or what you called a ghost plat. When it specifies one credit for each unimproved lot greater than 5,000 sqft, does that mean that the credit issued are the same for all lots bigger than that minimum size? 10,000 and 5,000 sqft both equal one credit? Also, I assume that since it specifies the lots must be pre-existing, you could not carve up the required 5 acres (or 217,800) into 43 separate lots of 5,000 sqft and sell each lot as 1 credit, or can you? Would that be how TDR credits for a 5 acre sending site are calculated?
Fourth, I noticed in your link to recent KingCo TDR sales, http://www.kingcounty.gov/environment/stewardship/sustainable-building/transfer-development-rights/market-info/sales-data.aspx, that in the recent sales, comparable credit types are selling for a standard price, $24,600 per TDR for rural/agriculture, $22,660 for rural/forest. But in the older sales, it could vary. Take for example 10/30 and 11/31 of 2007. Both were rural sending to urban receiving to cover 2 additional lots per TDR. But the November sale went for $26k per TDR compared to the $17.5k the month before it. With this being, as you described, a free market, I would assume that variance is normal. Why the standard prices as of late?
I'm curious, in your proposed JV, what are the various roles of partners you seek?You've mentioned outsourcing a habitat developer as well as utilizing your selected Everett law firm. You've mentioned training a younger brood of go getters to manage this venture once you find yourself with enough money that you can devote the rest of your life to sailing....I'm interested in further considering your JV proposition, and while I certainly can appreciate the idea that it could be a completely passive investment, I'd prefer to be more actively involved. I still have many decades of life expenses to cover, and while mailbox money is certainly valuable, I think the learning experience would be equally so. My assets at this point are cash and a knack for buckling down and learning about complex topics. What is your vision for the structure of this JV? Is there an area where one could devote time to becoming an expert in that would greatly strengthen the team?
To answer your question of why do I want to invest in residential properties, I was looking for something that would permanently generate income. I already have some cash and thus am less interested in flipping to gain a relatively larger amount of money over a short period of time. Living is expensive and it would feel reassuring to have some stream of income in place countering the ongoing expenses of life. In the scope of what I knew, long term holding of rental properties, if successful, seemed an option. Your plan of selling low-down seller notes, if successful, would also work.
I lived in Seattle proper (Northgate) for three years before moving to Bellingham. I like Bellingham, but still would like to move back closer, but not in, Seattle. Thus I've thought about close northern boundaries such as Shoreline, Kenmore, and "close east" areas you mentioned, Duvall, Carnation (though I have seen nothing there in terms of MFR that would bring cashflow)...My thinking was that I should get rental properties in the area I want to be, hence me asking you about Everett, Monroe, Gold Bar...in the first place. Areas that would all be a manageable drive from where I want to be, as opposed to Bellingham. I wanted to own long term rental property for the same reasons everybody else does. It was the way I saw up the mountain, to answer your question.
I'm sure I still have questions and thoughts for you. I'm responding now to strike a balance between the time it takes for me to digest your multiple dense posts along with their accompanying links and the need for speed mentioned in terms of the property owner itching to sell now.
Thank you very much for your reply. Sorry about the delay in responding, but I went over it many times. I gained an appreciation for looking for opportunities not only away from all the competition elsewhere, but in this case, aided by that very competition. Simply, if everybody is trying to buy something, figuring out how to sell it.
I responded to your post rather than emailing you in case any of my questions were shared by any other readers. If some of my questions are better addressed through email, mine is listed on my profile.
