All Forum Posts by: Faye R.

Thanks for the thoughts, Joel and Damon. It's not typical in this area to get a percentage of income. I went into a lease extension negotiation meeting with the tenant feeling like a good guy for having cut him significant breaks on late fees and interest and also skipping annual increases for two years. He walked into it feeling like the original lease terms were not fair because he was responsible for upkeep and repairs. Also he was under the impression that I charged him 600/month more than the previous tenant.” (In reality it was a 260/month increase and I spent 35.5k on repairs and improvements before he took possession. But the conversation was so unexpected that I didn’t have the numbers with me.)

Part of me wants to tell him to hit the road. Current market rents appear to be higher than the 5% cap that his lease extension allows so it would be financially rewarding. But it feels important to attempt to justify the rent. He is a good guy with a residential tenant mentality whose business is struggling. Also, it’s a small town. His story doesn’t serve the community.

As a former restaurateur, I know that the patio allows him to do considerably more business. As a real estate investor, if the rent is the same with or without it, the logical course of action would be to build over it. So there is clearly value to the patio, I just don’t know how to measure it. Any thoughts on a percentage to “ever so slightly raise the base rent?”

Assuming going rates are NNN $1/sq foot for restaurant space, what is a fair price for the attached patio space? Small population makes comps with patios impossible. Local weather allows for patio use about half of the year.

Sq footage of restaurant is 1623. 

Sq footage of patio is 671.

Thank you! 

@Bryan Cork Beautiful. Thanks :-) 

@Bryan Cork Did the PenFed HELOC pan out as expected for you? I'm contemplating applying for two of them.

Does anyone have current recommendations for Kansas City please. Specifically:

Roofer

Plumber

Handyman for big but simple project (cleanout, paint, minor repairs) 

Tree trimmer that can handle very high trees

Thank you! 

Thanks for the feedback. I guess that I wasn’t very clear with my question because I do feel confident with market assessment. What I don’t understand is how to navigate seemingly vast distance between concept and hiring a qualified contractor. For example, do I start with following planning restrictions  to the letter of the law? Or is there a professional who will know what easements or variances are attainable to provide greater building density and/or more efficient public works- tie ins?

Would I go through this process before or after hiring an architect? And do I need an architect? If so, do I ask them to start from scratch one or is it possible and cost effective to purchase premade plans somewhere (where?) and then have an architect or contractor tweak them?

In residential language, I would explain my plan as building a single zero lot line home while setting groundwork to later build the second. I imagine this will involve public works considerations and figuring out some work-arounds with zoning. For example if =<50% residential is determined by tax lot instead of new building, I might combine the lots or adjust the lot lines.

What kind of professional knows about tax abatement incentives, systems development credits, etc? Are there special financing sources that could make it worthwhile to set aside some of the residential units for low income housing or put solar on the rooftops or . . . ?

I know that these aren’t simple questions. So what I’m really trying to ask is, are there resources that will help me learn the basics of mixed use development?

This is my first BP post!  I've got two parcels  (.37 of an acre total) centrally located in the pedestrian area of a small but growing town in Southern Oregon. (Pop. 6k but it's not the complete boonies as 100k+ people live in close-in communities.) About half of it consists of four individual buildings that are leased to various retail tenants. The remaining half has an unnecessary (per existing city code, though they are considering changing that) parking lot and two very old residential units. I would like to understand the highest and best use of the property as a whole and to come up with a long-term plan to get it there. I'm hoping that the long-term plan will allow for an intermediate step of replacing the existing residential units and developing the parking lot.

If there is one thing that I know it's that I don't (yet) even know what I need to know. The city is great but I speak only the most rudimentary planning language. They suggested that I hire a land use consultant but couldn't refer one. I'm waiting to hear back from my lender to see if she can. Is this the best first step? If so, how do I vet potential land use consultants? Are they some sort of magical unicorns who speak planning and contractor-ese and will provide a detailed, specific, and GOOD plan? Do they reduce my role to crunching numbers, choosing designs, and hiring and communicating with the contractor and lender?  Does this naive suggestion elicit uncontrollable laughter from the experienced developers who are reading it? 

Will someone tell me exactly what I need to research, understand, and to take on myself, in order to make a project like this successful?  (I do have a decent understanding of investing. I've bought, sold, and hold multiple SFR in addition to these commercial units. I don't have much experience with rehabs, contractors, codes, or planning departments.) 

Thank you!