All Forum Posts by: John Bowen

What screening process do most prefer for small commercial tenants? We require a personal guarantee along with a credit check for the guarantor.
Seems at the 3000 to 6000 square foot level seems most are start ups, or have out grown their first building.

Anybody recommend a good tax attorney-tax planner in the Houston area?
The quarterly taxes from my main business are killing me. I have a very helpfull CPA. He is helpfull about adding up how much I owe.

So where do you typically find leads on multi family units?
Seems the good deals we have found on SFR and commercial have been fairly easy to find slightly outside of mainstream RE channels.

Went through a very similar deal last year on a hurricane damaged forclosure house that had been that way for almost 3 years. The day before closing we drive by and there is a big sign posted in the yard about a city hearing to tear it down along with postings on the door.

Called a time out on closing and called the city building official. He stated if the city had a repair plan and timeline approved prior to the hearing that it would recommend repair instead of demolishing it. No problem had that on my computer and emailed while on the phone. He had me take out a few things like landscape and such to stay under the 50% damaged FEMA guidelines. Told me as soon as we owned the house he could approve the plan.

This was a VA forclosure involving a bank in Florida and an asset managment call center in India. Told them I was reducing the offer 30% if they wanted to close. They said no. This went on until 3 days before the hearing. Finally their American problem solving woman gets involved. She called me, called the city, and then called back. Offered 15% off. We said no. She agreed to the 30% close the next day.

Ended up making $10K off that city posting and my plan didn't change except the start date was pushed a month.

50K does not go to far here. Maybe watch older parts around Pasadena La Porte areas. Good industrial areas with a lot of employment. Rent units there stay occupied pretty good. We have several in Seabrook, but they tend to be 100K properties.
If you are leveraging 50K you will be fine. 50K all in it may have had wheels under it at one time.

We are quite pleased at 1.4% here South of Houston. Mostly buy based on purchase price and ARV. Try to end up with 25 to 30% equity after rehab and such. This normally allows to refiance and get almost all of our cash back out. We target long term value and normally refi for a 15 year note. Not really looking for any short term positive cash flow at this time, just properties that easily pay for themselves.

The permit process around here can be a mess. One hurricane damaged house we rehabbed the city was very helpfull with permits and coaching to keep it within FEMA guidelines. They did chastise me several times about electrical work until I had a licensed electrician pull a permit.
Funny thing is our company had just changed out their emergency generator for the main city office with no permits or anything. Nobody thought twice about a diesel mechanic wiring up 480 3 phase. But don't change the wall outlets in your rent house.

Interesting read.
I have never pursued HM in an RE deal. My one brush was when I was starting my diesel engine business. The deal smelled bad so I made due with out it.
I deal with mostly small banks here in Texas and have found the lending enviroment still pretty friendly. I have noticed as we complete more deals that it gets a lot easier and the terms get better as long as the math works.

Anybody recommend a good commercial lease attorney in the Houston-Galveston area? We recently purchased a commercial complex with 4 different ownerships in the last 4 years. The leases are a mess with different ones for each tenant and different clauses and ammendments for CAM, T&I. Some standard TAR and some written by a law firm I believe.
The "property managment company" Had some pretty screwed up books.

I want to find somebody that can review the leases and tell me exactly what each tenant should be paying and when. All kinds of adjustment periods, 95% occupancy clauses and such.

Thanks

We did a bit of research last year and consulted a couple of lawyers regarding it. The general finding was the series was not really worth the extra effort. I think it's so new most legal folks don't have any experience to go with.