All Forum Posts by: David Klick

Hello.

I have been researching a local tax sale.  My lawyer has basically stated that this is a wonderful low risk venture at this point.  Here are some of the specifics of the property and what I am seeking:

- Seeking a $50K loan, secured by the tax sale property
- Offering 1st lien position on property
- AVR $150K+
- Purchase $15K or less, with $35K in repairs
- Willing to use a free/clear property as additional collaterial ($75K+ value currently) if needed
- Looking for high single digit interest rate, on 30-year amortization schedule with 2-year ARM and no pre-payment penalties
- Tax sale, so must use private money for 1st year.  After that, I would refinance it into my personal holdings.

Is this a reasonable request?  I would most likely live in this property for the first year then turn it into a rental property.

Thanks for the feedback!  Welcome to any and all suggestions to make this deal happen.

Howdy all.

I was a part of this site many years ago.  Things have been going great.  Wanted to drop back in and say hello and see what is new in the biggerpocket world!

Looking forward to reconnecting with the board, and learning about the who's who of my market again!

Talk soon!

David

@Derek Carroll Most excellent post. Thank you. I will follow up with you via PM to learn more. Thanks for sharing, and I apologize that your computer refreshed on you, how frustrating is that?!

And thank you for answering the original question! :) I believe we might be closer then anticipated here. I will share the details of my associate whose sole purpose is raising capital for the "Skin in the Game."

Regards,

David

I don't understand your question. Are you talking about the loan, or the construction schedule per month?

@Karen Margrave: Gotta love being with an Architect. She's the best and a real big driver on this project too!

It's about 158 acres.

Here are some of the gross numbers.

It's a process! I'll keep you posted as it unfolds over the next year or so for funding.

EDIT: The box it was inserted into, didn't stay formated. sorry about that guys!

Exactly. It has nothing to do with avoiding work.

That's like saying that driving a car is LAZY, and one should only ride horses and buggies as they did 100 years ago.

Technology is here, and there are PLENTY of ways to stay connected to your tenants, including birthday cards, Gift Cards for when they pay early each month, Xmas cards, etc.

Don't cut off the nose, to spite the face. Welcome to productivity and results in the 21st century.

@ Joel Owens

Great points. I also am working the residential side. I am also a business owner in an international floor coatings company. I view this large commercial project as a third way of diversifying my future.

The payout will be much more then $1M if it goes through. To me, I would take this payout as seed money for a much smaller development company that specializes in $5-10M dollar projects, which I would also own. I just happened to know a key player in the deal here, and it's unfolded.

There's no denying that a development will occur on this property, it's just up in the air who will be the lucky one to land it!

Any and all advice, as you all have been giving, is truly welcomed.

We also use ERentPayment.com. Great site. Great customer service the one time I had a question.

Not an option for my tenants. If they want to rent with me, they will pay through this service.

Charles,

Do a search. Long list of people who have explored this list that is advertised here. It's not a legit place to find money, is the general consensus.

I'm sure that a HML in your area would be willing to sit down and discuss your business plans and goals. you most likely can find one on here who will help.

Good luck!

@ Karen Margrave

Karen,

Thanks for the questions. I haven't done a great job of explaining everything, as I was really just asking where one finds investors of this size at. Here are some additional details about the project:

I have been born and raised on this land. The city has desired for the property to be developed for the past 10+ years. Two previous developments have fallen through, one because JC Penny's backed out last minute, and the other because it was being hodge-podged together and not controlled under one name.

You are right, I don't have a ton of Developer experience, but I have handled projects well over 50 million in the past (Not owned, but Project Managed). This would be about 2x that size by phase. And I have contracted out (Again, nothing signed yet, just verbal agreements once we get funding) with a builder/GC who has done multiple Mix-use developments in the past 20 years as well. They would be running the entire show, I would just run the steering committee essentially.

I don't have money into the project at this point, besides months of development time. The Architect who developed the initial plans is working on "If we succeed" basis (She is my GF as well :) helps!) Additionally, the land is not purchased yet, that would be part of Phase 1. The City, once the land is purchased, has already verbally agreed to rezone everything for us and assit with tax breaks etc.

The people who put the money in, would control the project, but they have signed a Non-disclosure/Non circumvention agreement by me, so they can't do anything without my involvement.

While the project is big, it isn't that big when broken into phases and I have all the ties fro being born, grown and raised here.

At this point, if we find funding, the rest is already lined up. My GC who does this day in and day out, will essentially take it from me from this point on. Since I have the City connections, the real hurdle is getting funding. It is a completely viable project, and multiple market studies have been done proving it is. There is an excess of $93M a year in buying demand in the 3 mile radius alone around this property. Given the mixed-use development of Retail/Residential/Office/Hospitality, we will be able to tap into that demand quite heavily.

The real hurdle now, will be finding a company who can fund this.