All Forum Posts by: Eric K.

Thanks Joe,

It seems to be a polarizing issue. In my research I've seen many warnings that have been, "wood with water is never a good thing" and various warnings about insects. 

And the frequent "if built correctly" caveat before an endorsement. Any common telltale signs to look out for? Any special steps I should take to insure a problem-free PWF?  

Hey BiggerPockets at large!

A question for you all, should I run from a permanent wood foundation? House was built in 1987 and showing no visable signs of distress in the foundation. Hasn't been inspected yet. 

I might add, it's in northern Minnesota where the ground freezes solid. Should I run through there with a black light? Anything else to check? 

Thanks y'all. 

Dog Boarding

Retering/Moving to a warmer climate.

I went and looked at an interesting property yesterday, its a SFR with an established home-business. It's on a few acres of land and generates up too 50,000 with little over head. (At least that's what they claim)

Has anyone had experience buying a property/business like this. Are there any additional legal head aches? Or other red flags? 

Thanks for any input,

Eric.

Hey guys,

I recently got a purchase agreement on a bank owned mixed use property. A business owner next to the property mentioned that someone was willing to buy it for the list price, well above what I negotiated for.

Can I sell it before close? What's the best way to approach the potential buyer?

I'm looking at a mixed commercial that is currently vacant. One commercial and two apartments. There would be extensive remodel work needed for the apartments. Gross rents if fully filled would be 40,000. Asking is 120,000 and estimated construction costs at 75,000. No current tenants.

I did a commercial last year and this is in the same area. I was able to rent fairly quickly. And the location is a downtown in smaller but growing tourist town.

Pros: Good location, no zoning worries, residentials will lease easily.

Cons: The commercial space has a small storefront with a large corridor feel and may not lease quickly. Apartments need to be built from scratch.

Financing the property is not a problem but the potential negative cashflow with added remodel loans would become uncomfortable.

When doing a deal like this can I, ask the bank to delay mortgage payments for x amount of months? Anyway to get the upfront capital invest down on a deal like this?

Thank your for your time and thoughts!

I can't believe it has been a full year already, but here's how my deal broke down and I would like some feedback, as I'm gearing up to do another Real Estate deal. I'm looking at Residential this time however.

First off, I didn't go in trying to do Commercial Real Estate investment, but it is what happened. I was looking for a spot to put in an Ice Cream store, and stumbled upon a 7000 sq. ft. commercial building in my smaller downtown.

It is on the corner in the heart of downtown. 3000 sq. ft. was already leased at 2000 a month. I subdivided the front half and leased out 2000 sq. ft. at 1650 a month.

There were some complications and the roof needed to be redone along with some other issues to get everything up to code. In the end there was a sizable amount of work done. New roof, new heating/ac, new windows etc.

After the improvements I had limited capitol left, and opted to just lease out the final 2000 sq ft. at 1550 and forgo the Ice Cream store all together. The leases are not NNN, and I certainly could get more from the back 3000 sq. ft. but I can't negotiate a new price until the existing lease expires.

Gross: 60,850
Building Cost: 300,000
Renovation: 120,000
NOI: 18,000

I learned a lot and got very involved in the community, which has been a blast. However, the biggest downside was how much of my own capital I had to put into it, and the fear of not being able to find a tenant. I was very relieved when the last space filled.

A theater company almost rented it, but in the end I rented it as an office space, and lumped in part with the signing of the upstairs location lease. So they can use it as an office as well.

Thanks everyone, I'm going to talk to the Real Estate Agent I work with later in the week and see what he thinks. I'll keep you updated.

@Karen, Thanks for the response, the 7000 sq ft either needs to be fire walled off or sprinkled to be up to code. I am looking at leasing it somehow, not starting a business. I'm opening one in the spring at a different location.

@Marc, I talked to a developer and he wanted to put a Parking Lot down there and apartments ontop of the ground floor commercial space. But we ended up deciding that the basement ceiling was not high enough. There is a smaller parking lot directly across the street, but there is often limited parking downtown and is problem for shoppers and residents.

@Kyle I'll keep the thread updated. I'm interested in hearing what happens with your space as well. When I ran the numbers on the building I was not factoring an income from the basement so this would make the deal even better!

Yes, it's a smaller town. I hope it isn't a reflection of the market. Though it's possible. It has only been vacant for a month and during that month I cleaned up and remodeled from the last leasee.