All Forum Posts by: Gabriel Garcia

Michael, I completely agree as that's what I'd normally like to see as far ad COC.The only reason I am considering it, is because it is in an up and coming area plus construction and appliances have a one year warranty. Speaking with the realtor they are willing to come down about 10k and I'm thinking I can get my closing cost cut in half which makes the deal a bit better. Thanks for taking your time and going over my potential deal.

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Property is a new build with one yr warranty on construction. HOA covers maint on common areas but would be responsible for grass cutting, water, sewage etc hence the "other expenses" number on the spreadsheet. I normally would like to see a higher COCROI but it meets the 50% rule and not as bad cash flow. Due to the area where im at the county did not want to put separate meters for each individual unit for whatever reason. Management has other units in the area and said the water figure is comms to the other units she manages. There is also a 300 management transfer fee which she is willing pay half. These units are vacant as of now but does not seem like it would take long to get rented out as they were just finished a couple of weeks ago. They are in an up and coming area of town as well. I normally would average about 8% on on criteria but lowered it to 5% considering they are new builds. I feel a bit nervous as i dont think we have felt the full affects due Covid and trying to be some what cautious when running my numbers but not overly where no deal would work. I appreciate any feedback. Thank you all for your time

I would be all in for 1.42 mil give or take and he would be in for about 2.1ish mil with expected appraisal of about 3.6-4 mil from comparable businesses.Expected monthly income of about 40k with 15-17k for the note and would do a 60-40 split on the remainder.

So yes 40% give me essentially 40% of construction and land. The deal was I invest 400k originally and pay 40% of the remaining 550k which is roughly 220k which in the end comes out to around 620k. He would be responsible for 60% of the 550k. The property apparently appraisal is 1.5mil. We would both be paying down the remaining debt 550k. I would be responsible to pay 40% of it. So if the property is valued at 1.5 do you think it's fair for me to be paying 40% of apparent appraisal instead of 40% of the original loan he took out a few yrs back. Should I haggle over this? The area is I would say one of the best locations in town. On frontage property. There's a huge hospital across the street amongst many other stores. Walmart and Sam's less than a minute away. Very popular up and coming area. 4 schools within 5-10 mins. 

Hey Patrice, so the development cost are around 1.7-2 mil. Time frame for construction would be about 6-8 months.  Verbal agreement with bank to do an interest only payment for the first yr. 

I would be getting 40% of everything.  We are working out details as we speak. The problem is I currently work  offshore and can only get as many details as long as the weather isn't bad and I can keep a connection. As far as I know the property is his out right.  Once we get an agreement we would go into the next phase which would be the construction side. Once I would become a partner in the llc we would then get a construction loan to begin for approximately 2mil. According to his sources,once everything is done it would appraise between 3.5-4mil. He does business with my sis-in-law. He does have other business around the area. He had a preliminary agreement with a bank and possibly a restaurant that would like to rent once construction is done. If everything were to go well and rented out possible cash flow between 7-9 k a month. 

I have been offered an opportunity to invest in commercial land with the intention to build a plaza on it.  Approximately 3acres of frontage property. He wants me to buy in at 40% which is roughly 400k. He originally bought the property about 9yrs ago for about 850-900k. He has all the plans laid out of how he would like the plaza.  Everything from the soil testing to the parking spaces. He put in another 30k or so. So comes out to about 930k all said and done. He still owes 550k. I would be paying 40% of the 550k still owed. I would be all in for 620k for 40% ownership. Obviously 620k is not 40% of 900k. The reason for the 620k is because apparently it appraised for 1.5-1.6 mil which would then turn into approx 620k(40%).I have not seen a copy of the appraisal. I plan on getting my own appraisal. My question is say it does appraise at 1.5mil should I haggle over how much he wants from me 620k for the 40% when even though he got it for 900k. If I were to pay the 620k he would have paid off the loan and would have all his money out and I'd be left with a 620k loan. I feel like he is charging me  on the equity he thinks he has in the property and not the loan he got for it. Is he right in doing this and am I over reacting.  I don't mind paying 40% of the 930k but doesn't seem right to be paying 40% on 1.5ish mil. I would be paying 40% on the appreciation that he thinks is about 600k. He paid 930k all said and done and its hard to believe the property gained 600k which would come out to about 1.5ish mil in 9yrs granted it is in a pristine location.  Should I haggle to pay 40% of the original purchase price or get an appraisal and pay 40% of that...

Thank you for your input.  The appraisal was done approx 6yrs ago approx at 1.3mil and 3.4mil once construction is complete.  Planning on building a plaza and renting out. As far as the appraiser I would like to get 2 different ones from a different county as to not coincidentally know the person whos property is being appraised.

An opportunity has presented itself to own commercial real estate in south tx. Property apparently appraised at 1.1mil. Partner still owes 550k left.  He would like for me to buy in at 400k approx 40% and then pay 40% on the remainder balance (550k). He is asking 10% earnest money (40k)with a 10% penalty were I to pull out.  Drawings and engineering have all been done.  Plan is to build a plaza and rent out. I work out of state so have not physically seen the property.  He has done business with friends of mine and they speak highly of him. Is 10% to much without seeing the property? What stipulations if any should I put into the earnest money?