All Forum Posts by: David Bohn

Hey Austin,

This type of information is tremendously helpful.  It seems to be tracking status of the areas, which if there's still momentum in those areas could help situate someone for future growth.  I'm wondering if there's a way a show other demographics and statistics that drive the growth to those areas.  For instance, new businesses, salary growth, etc.  The areas you specifically mentioned have seen growth due to those factors (Buckeye - industrial expansion; Surprise - TSMC plant relocated).  As a developer and land consultant, to have that kind of information at the forefront is incredibly valuable.

Hopefully that helps.

Hey.  It looks like you have this one pretty well dialed in.  I'm curious where your $450k number comes from and how does that compare with the current market?  Seems to be a deep cut in price if the market can bear the $695k asking price.  Hopefully you get it.

It looks like your strategy would work out great, especially if you can get it anywhere close to $450k.  It starts to lean out if the price goes up from there.

I'll leave the other question for a lending expert.

Best of luck.

This may be an unpopular perspective, but I believe long term hold is going to win out on short term 9 times out of 10.  Several things to consider: 1.  Volatility of the market.  You may make a quick return in a hot market, but the moment that market turns south (which it inevitably will) you will be scrambling to not lose everything you just gained;  2.  Taxes.  Taxes are higher flipping the property.  You don't have the benefit of maximizing cost segregation, long term capital gain, 1031 exchange, refinancing / lending, passive income vs regular income, etc.  3.  Gains in a long term hold can be refinanced and used for another property, but the gain is not taxed.

I originally wanted to flip homes and make quick gains when I started investing.  Fortunately it was during the 2008 crisis and we were forced to hold those homes we bought for like $40k each.  We still have them today and each one is worth closer to $400k.  We were trying to sell each one to make maybe $10k each.  We pulled the equity out strategically and bought more as often as we could. 

I would highly recommend long term over short on "most" transactions.

 I'm based out of AZ, specifically the Phoenix Metro area.  Our development group is BFH Group.  Would love to connect if you're ever in the area.

 It's good to hear from like-minded investor / developers.  We've been doing land development and entitlement for a little over 20 years, initially as a consultant (civil engineer & owner representative), and I have to agree there is a significant risk to land entitlement.  However, like any investment, when you are familiar with the process, markets, people, etc., you learn how to mitigate that risk.  We're now developing approx 1000 du at different stages.  It's been challenging to say the least, but the rewards have been better than any other investment vehicle I'm aware of.

We have been actively involved with the entitlement side of multi-family investing.  Our strategy typically involves tying up a property that we feel has a strong probability of entitlement for multi-family use.  There are several niches that we will explore and focus in order to be successful, but we have found that we typically see returns of 2-5 times of our original investment.

The challenge with entitlement is there's definitely quite a bit more risk involved as well as a very complicated process (hence the higher return).  We are fortunate that land development is something we've been doing for several decades, but each site presents its own challenges and rewards.  Just wanted to share a lesser known investment vehicle for Commercial / MF.  Good luck.

Many of the above comments are very spot-on.

Not sure if this comment will help, but maybe there's a way to get the best of both worlds if you can build this studio separate from the building and split the lot?  Just a thought.

Hey Steven.  The entitlement process is tricky most the time.  Even when we try to simplify by going through County versus City, there are still nuances that you'll want to make sure you cover before you move on your decision.   I'll put out the disclaimer that I do land development and entitlement in Arizona mostly, and more specifically to the PHX metro area, so I'm not as familiar with Colorado.  

That all being said, here in AZ, most the cities I work in are also in Maricopa County.  If it's a County island, there is an understanding between the Cities and the County that they will work hand in hand.  Some items to be aware of include, but not limited to:  zoning in County may conflict with the City, utilities that belong to the City infrastructure may require that you annex the property prior to rezoning or other entitlement, County development standards may be different or less stringent than City standards which would cause the development to be non-compliant when annexed.

I would echo the same as Bryant Brislin, you will definitely want to connect with someone that can navigate this process for you.  Small obstacles can become very expensive or time-consuming when you don't know the processes.

I hope this helps.  Good luck!

Hey William.  The first step would be to get an ALTA survey completed on the entire property.  Sounds like you may have utilities that tend to come with easements.  Those easements are typically defined by legal description which can be plotted located if they fall within your property.  When these are defined you will have a better idea of where the structures and other utilities can be located to serve the community.  You may want to request the construction drawings / plans for the utilities that were installed to help better understand their impact to your property.  Likely you can get those plans with a records request from the municipality where this property is located.

You'll need to get surveyor, architect, and civil engineer on board earlier than later.  They should be able to help you avoid any pitfalls with the process.  You may need some other consultants, like geotech engineer (soils report), site lighting engineer, etc.  These consultants should be familiar with the process, licensed and know what you would need in order to get your approvals.  This would include your timeframe and scheduling to help the owner assess their timelines as well.

I hope this helps!  Best of luck.

Hey Kelsey.  It all depends on what the underlying zoning will allow.  R-2 is typically designated for a residential zoning, likely higher density / multi-family.  You may be allowed another use besides residential, however you need to confirm that with planning department where this property sits.  The zoning will define the permitted uses (this will tell you if you can have an RV/Boat storage there) and it will define the density (this will tell you how many tiny homes you can add).

You'll want to make sure you don't conflict the existing duplex to a new use or mixed use where you might put the existing use out of compliance.  Without knowing more about where you are and what you want to do, I wouldn't be able to give too much more than to check the zoning ordinance to ensure what you want to do is allowed and if it is, what implication does it have on your property.

Hope that helps.  Best of luck.