All Forum Posts by: Dom Nico

Brewery was one of the first things I thought of, and would be a great idea! But there were 2 things that made me wonder if it would work:

- Lot might be too small. I haven't seen breweries on lots quite this small. Plus, if they want tasting room, etc., there are additional parking needs.

- This is an industrial area with no lack of available space that already has suitable buildings for a brewery.

If I trade property I own in exchange for a property owned by a non-profit organization, what do I need to consider regarding taxes or anything else that could impact the transfer? How should we structure the transfer, deeds, etc.? No money will be exchanged, just my 2 lots for their 1 lot.

Plans for the property I'll be receiving are still up in the air. Might sell, might keep and lease or develop. Not knowing the final plan, I'm not sure if 1031 is a good option. I'm still learning. 

Someone told me to treat the transfer as 1 for 1, and then treat the 2nd lot separately as a gift donation. 

What's the best option?

I'm seeking recommendations for types of businesses either to encourage/court or to consider myself or with a partner. Recommendations can be short-term uses to bring in revenue while considering long-term plans.

The land costs almost nothing to own, so selling is an option but I would much prefer to keep it and generate income from it. Exception would be that I'll consider selling and using proceeds for BRRRR (and currently this is the best idea I have).

Ideally I'm looking for minimal cost to me. Open to developing the land myself, but in most cases that would require finding a partner, so I'm prioritizing zero-to-low cost options.

Recent fee appraisal puts value around $140k. Separate BoV concurs with near-$150k range.

Subject lot is approx. 100' street frontage by 150', rectangle. Vacant, flat. All utilities. Sidewalk, no curb cut yet. Zoned commercial. Most commercial, mixed-use, office, multifamily res, and small industrial uses permitted. Potential to add as much as 7,200 sq ft from adjoining vacant property, but have not spoken with owner.

Will be meeting with the planning department to discuss further considerations, such as height restrictions, etc., as well as types of businesses they're hoping to see more or less of. Also will be reaching back out soon to commercial brokers for further insights.

Industrial area undergoing redevelopment. Half mile from Interstate, 1 mile to CBD. Area has mix of older retail strips, motels, banks, gas stations, some QSR, a few independent restaurants, services (barber shops, etc.), and retail, warehouses, factories, and a business incubator for entrepreneurs. 

Just a couple of lots down from an intersection that averages approx. 30k vehicles per day. The main road out front gets 20k/day. For morning/evening rush hour traffic, the property is on the outbound (evening) side of the road.

Lot's too small to attract most chains. Probably too small for multistory self-storage. Well-suited to professional/medical offices, small restaurants, small retail. Assuming a building footprint of up to 5000 sq ft, use could not support the need for a lot of parking (probably <20 spaces).

Not interested in auto maintenance and other uses that require disposal (and potential runoff/dumping) of large volume of hazardous materials.

Long term, I'd prefer something that contributes to the improvement of this area (e.g. a used car lot might be OK for a couple of years just to generate income, but I'd want to find something more beneficial after that). Area lacks coffee shops, laundromats. Uses that cater to commuters would thrive. Uses that also target the business incubator residents/visitors and remote workers might work, e.g. many years ago I'd thought about doing a sort of subscription-based co-working space - something of that sort may do well initially, but may be much more successful in about 5 years as the area continues to redevelop.

Current resident population within 1/2-mile is lower-income. Families, seniors. Not walking distance for more affluent and younger population of CBD.

 What hold costs? It's vacant land. The current properties cost near zero to hold, and the commercial property will cost the same. 

Greetings.

A non-profit has offered a land swap for a residential property I own. My lot is vacant, in a depressed area. I've considered building and renting single or multifamily, but do not currently have the resources for it, so I'm taking offers on it. This non-profit has offered a commercial lot appraised at about 3x the value of my lot. I'm surprised by that value and would have thought the actual value is closer to the assessed value of around 1.5x the value of my lot -- the neighboring lot is identical but has a building and businesses on it, and is appraised at just $100k more than what their appraisal shows for the unimproved lot. 

The commercial lot is also vacant, on a commercial strip (mom n pop retail, banks, gas stations, etc.) 2 lots down from a moderately busy intersection in a redevelopment zone. Approx. 100' frontage, 0.5 acre. Avg daily traffic ~20k vehicles.

I'm not in a position to build anything (no build experience, little cash on hand, slim chance of large loan approval), but could look into selling it later. I'd also be open to a ground lease, but I'm not sure whether it meets the conditions that would make that a likely scenario. Would like to see what other options are out there for something like this. If not the swap, the non-profit might instead offer as much as 1.25x the value in cash, in which case I might consider selling or could just keep it for now (taxes are virtually zero).

Does anyone have insight or suggestions on commercial real estate that could help inform this decision?

At just 3 years, depending on the window company they might still be under warranty. 

Thanks, AJ. So you're suggesting that if I keep looking I can find a good team with a lender that will work with me under the current ownership?

It was a little frustrating because I'd been in communication with these lenders from very early on, sharing all details with them from the start and repeatedly remarking on the Trust ownership, and stayed in contact with them throughout the discovery process as I firmed up everything on my end, and now I have the plans, the contractors, the OOP funds, and basically everything else ready to get started within 1-4 months, but I'm back at square one re: loan.

I have a property I've been planning to rehab and rent out. I've spoken to several lenders, all of whom have been very helpful in educating me a bit, as someone new to this, and have been eager to work with me to get this done. However, in all those early discussions they failed to mention the fact that the property being owned by an Irrevocable Trust would be a barrier to them lending to me, and I'd naively assumed that the Trust would be treated similarly to an LLC, etc.

So here's the situation. Recognizing that I'll need to discuss options with an attorney, I'd like to have a few alternatives to bring up and talk through with them. Please let me know if you have any suggestions or insights into how to work around this, or how to revise the ownership to get things moving... or if you know of lenders that will lend to a trust.

Property is a single-family residence in need of $65-75k rehab. Has $60k remaining mortgage balance. Was the residence of a family member who recently passed. Before death, property was transferred into an Irrevocable Trust, of which I became Trustee upon death. My goal has been to borrow money for the rehab, rent it out to generate income for the Trust's beneficiaries, and then do a cash-out refi to recoup my down payment and any other out-of-pocket expenses.

I believe there are limitations in an Irrevocable Trust, which would prevent me from simply deeding the property to myself or possibly even to an LLC if I create one, even if the end result is in pursuit of my fiduciary duties to the beneficiaries, as Trustee (i.e. making the home inhabitable and generating rental income for the beneficiaries). Or can you think of ways that this could be done without going against those duties?

I'm working alone here on the money side, as the beneficiaries are minors/youths that can't really assist financially.

Appreciate any suggestions!

(clarification) The general plan is to rehab the single family home to rent, then build on 1-2 lots that I already own, and then to begin seeking out new properties to rehab and rent. So I'm still trying to work out the math for those first couple of steps.

If I'm thinking of getting into the BRRRR game with properties I already own, and based on various math scenarios my cash out when it comes time to refinance might be a bit tight, what are some strategies to keep the cycle going?

I have a 2nd home (inherited) I'll be renovating as a rental. Bare minimum, it'll cost $75k to rehab to rentable condition. Has a lot of work needed beyond the cosmetic. $50k is still owed on the mortgage. 

The home could fetch $1500-2100/month rent when completed. In an arm's length market the home could be valued at $175-210k after rehab. Could it be feasible to refi at a higher amount as a rental?

I have another property I'd like to put a duplex or other multifamily on after that. New construction. I don't (and won't for a very long time) have many other funds to work with beyond what goes into the first rental. Cost to build could be $250-300k.

How should I maximize the cash out when I refi the first rental? What would be your strategies? What kinds of numbers would you aim for to jump into the new construction next?