All Forum Posts by: Dylan Shea

Good afternoon all - I'm putting together a plan for hotel-condo conversion projects along the west coast of Florida, where I'll mainly be looking at taking down existing older hotel/motels in the 6-20 unit range and depending on the project, either gutting and remodeling or scraping and developing. I would love any recommendations on contractors people have experience with, or know personally, who could work on such a project. Any suggestions would be greatly appreciated.

Nikolas, the market is tough. Many many trades that available are overpriced and do sub-par work. I've completed a few renovations in the last few years here - some on my own and another subbing it all out. That being said, I have sorted through a lot of them to find a few good ones. I also have some good numbers on rehab costs in the CFL area. I've recently relocated to SW FL and don't plan on doing much here in the near term, and am happy to give you some contacts. My best guys are the ones you'd want for fix-n-flip (light) type projects: paint, drywall, tile, stucco and trim.  Let me know what you need and I'm happy to forward. Best of luck.

@Jody Hodges, that isn't the best area, as noted above... but not so much because of the crime, although that is an issue, but from a numbers perspective, houses in that area were going for 30-50k just 2 years ago, and now that investors have gotten wise, they are making minimal repairs and reselling for much greater amounts. A good way to tell is to look at the prior sale price and find what it last sold for (Zillow has this info and the County Property Appraiser usually does as well). This one sold for 32.6k (granted this was back in 2014), but that number is definitely the top end for that area. I don't back on appreciation plays, but would never buy where I know there won't be any appreciation, unless that cash flow was just amazing. This would not be the case here. 

@Ryan Guffey - you can do it! It's all about priorities. I have a family of 7 - wife and 5 boys (6 to 16yrs old ), work an 80hr a week job, and have renovated a duplex and built a spec house in my spare time over the last 3 years. Do I take time for myself? Not much. I run/lift a bit, but other than that I've gotten use to working from 5 or 6am to 12pm or 1am, then doing it all over the next day - pretty much 7 days a week... One piece of advice I have to give is with a family or significant other - it's all about expectations and the story. If you can weave a storyline where they understand why you're doing it, how long it might take, and where you'll be when you're done - they'll be more likely to follow or help you get there. I'm always explaining and telling my family the story of where we've been and we are going. I keep painting the big picture so they don't get lost in the woods.  And of course you can house hack. We moved all 7 of us into a 1350 sq/ft duplex (which equates to less than 200sqft per person) and we were able to reduce our housing cost to just utilities, because the other side paid the mortgage and all other taxes and insurance (principal, interest, taxes and insurance = PITI payment). That duplex catapulted us. I'm an attorney and my kids were always saying - "Dad why don't we live someplace nice?" And why do you drive a 15yr old truck? But then I'd go through the story line again, explain assets and liabilities and they would say "oh so I could do that too - and not have to work the rest of my life?" That's when you know you're doing the right thing. Also I would use any opportunity to combine the work and family time. I would take my boys (even the 8yr old) and do work with them on the house. Not because they were helpful - but so that we actually would spend time together. It's a great teaching tool! That being said, now when we discuss it, and they know how close we are to financial independence, they're like - wow! We did that together!?! Thanks, Dad! It's an amazing feeling for me, and the are developing the work ethic and vision so hopefully they can do it much sooner than me. Feel free to reach out if you need anything!

@Matt Wipper - no not yet. But I'd be willing to work with you to put something together. I'll IM you and we can get something on the calendar to meet and discuss.

Jimmy, it's pretty much about the numbers. If you need the money longer, want the lower interest rates and have the ability to qualify, then use the portfolio loan. If you don't have much of a track record/can't qualify/your only option is to pay the higher interest, points, etc., then go with the HML. Just know that it's imperative you get in and out quickly. Read the fine print about what happens if you need an extension, or can't pay the loan back in the short time frame that is customarily a key deal point in HMLs. Happy to discuss with you in greater detail if you need it. Just IM me.

JPD - happy to send you what I have. See my IM.

That's great Ryan - thanks for the response! Christoper - are you guys close to having any kids? When my wife and I did our first fix and flip back in 2006, we were just starting out and we lived in a portion of the house while we fixed up the other half. My wife has stories of washing dishes using a large tub, and taking cold showers with water borrowed from our neighbor's hose, during the time our water was off to redo the plumbing! We lost everything a few years later as we got too too speculative in 2008. So when we started climbing back up the hill almost a decade later, we made the commitment to house-hack/fix and flip with a duplex. We squeezed a family of 5 into a 1400 sq/ft duplex - but the other side paid all our expenses (PITI) plus some of the utilities. My kids all have memories of dad coming home after work, only to head to a new project where we would do the construction ourselves from 6pm until midnight. The positive thing is that the older kids have a great work ethic, know the value of money and buying assets, and that duplex has catapulted us towards financial freedom. For me - it's all been worth it.

Kristyn, Greg gives good advice. Another point to make (as Greg alluded to), is that the PSA usually will have a section related to the development/rezoning, where Seller and Buyer agree to the terms of a diligence period prior to Closing to allow Buyer to take the necessary steps for the applicable rezoning efforts. Buyer will require Seller to reasonably cooperate to achieve the desired rezoning, and the intended use will often be spelled out in the contract. Most of the time Seller will know if they have been receiving a special tax exemption because of the current use (most often agriculturally related) and Seller will then need to consider if the new rezoning and intended use will cause a loss of that exemption, therefore triggering a collection of "rollback taxes". 

Agree with the above. Having a focused direction will be most important. Many people new to the industry are just enamored with the idea of "CRE" but there are many different facets or ways to plug in, as noted above. As usual, personal relationships are the most important. Take brokerage for instance - with an MBA and passing your RE agent license exam, you'll have the ability to jump right into the large commercial brokerage groups - like CBRE, Colliers, JLL, ect., but your eventual success will be most benefited by a strong and supportive mentor who you can train under. Also, for many of the gigs that have the highest earning potential, you will likely be on straight commission (or commission with a very small base). So you'll need to have the ability to live very frugally or have some savings to support yourself until your pipeline has some deal flow. Some paths are direct stepping stones, whereas others are not. For example, if you're interested in development, don't start in leasing. Not that it can't be done, but you might as well aim for where you want to be. Also, what market are you interested in? If it's Florida (Orlando or Tampa) I'm happy to put you in touch with some great people who could answer your questions in more detail and with more specific knowledge. And ... the usual caveat - this is only my 2 cents looking at it as an outsider from the legal CRE perspective. Hope this helps.