All Forum Posts by: Glenn D.

Hello all,

I have the opportunity for my 1st small development deal and I need help, ideas and advice.  I have the opportunity to buy 22 acres in a great residential area and I want to develop it. I haven't purchased anything this big and have never developed land into a neighborhood - please help. I only have about $11K that I can access quickly without reaching out to other investors so please tell me how you would do this, what do I need to look at, what are the pros and cons of developing.

What say ye BP!?!?!

@James Rodgers,

I was an appraiser in CA and owned my own appraisal firm there so I speak from some experience.  Here are a couple points.

1. Many agents and apparently your agent too, are no where near qualified to perform an appraisal or give you a correct market value. Her utilizing SFR square footage is a prime example.
2. It is true that you have to compare apples to apples and when you cant find a Gala apple, you find a Fuji and adjust. BUT you can not compare that Gala to an Orange. The are both fruits, but value is way different as in comparing a SFR to a Multi-family.
3. There are 3 primary means in coming up with a properties value.  Sales/Market comparable, Cost and Income. This is very important because a wrong value can mess you over hugely. When there are very few market comparables, an appraiser will probably go with the income approach.  

So best bet is to contact either an appraiser who is familiar with the area and multi-family units and see if they will give you an idea.  Another avenue is to contact a commercial lender and they may have a Cap rate idea for your area.  

Hopefully your hard work will come across plentiful opportunities.

BP Family I NEED your help. I have the opportunity for my 1st small development deal and I have never done one before.  I need your mentor-ship, advice and possible joint venturing capital for the right people.  It is 22 acres in a great residential area that I can buy for a very inexpensive $300K

A little back ground on me:  My wife and I have been investing for years but all small single family fix and flips, buy and hold, BRRR etc.  We only did 2 deals last year, one fix and flip (Lease option sale) and one buy and hold, and currently have 5 properties including our residence.  So we are not big timers YET.  

Now I have the opportunity to buy 22 acres in a great residential area and develop it.  I haven't purchased anything this big and have never developed land into a neighborhood - please help.  I only have about $11K that I can access quickly without reaching out to other investors so please tell me how you would do this, what do I need to look at, what are the pros and cons of developing.

Thanks in advance - you guys are awesome.

@Travis Colsen

It has been very mild the last 2 years so this winter is not making a lot of folks happy, but my family and I love the snow so we are enjoying ourselves.  

I would say that yes, your lending background should help you understand the environment and give you an upper hand, some insider knowledge.

Grand Investors!

For all of the family here, I want to invite you to come and socialize, get educated and MeetUp with fellow investors in the great frozen North.  If you are close to Grand Forks, ND or East Grand Forks, MN it will just be a quick trip to find other investors that would love to invest in you.

Winter is hear but as always - This too shall pass! And like seasons Great Deals in real estate investing do not stay around long.

With that this meeting we will focus on 2 things:

1 - Finding a great deal in Foreclosures - Steve Leventes will be our guest speaker to expand our knowledge on Foreclosures.

2 - Getting prepared for capitalizing on those great deals. i.e. getting your finances in order, finding funding sources, building your investment team and more.

6:00 PM - 7:00 PM - Potluck social hour, meet & greet

7:00 PM - 9:00 PM - REI Deals discussion & Education

As always I look forward to seeing you again.

Glenn Out...

Helping our neighbor is why we're here.

Hand Up Investors

[email protected]

Grand Investors Meet Up Group: http://www.meetup.com/Grand-Forks-Real-Estate-Investors-Meetup/

@Travis Colsen,

Welcome to the game!  It is exciting and frightening all at the same time.  I see that you are with Well Fargo, but I will not hold that against you - lol.  The good thing is that with your experience you have seen the lenders side of the coin.  Now you will need to turn the lazy susan and look at it from the other perspective and realize that they can work together but the goals are not necessarily the same.

1st I would suggest looking at the different parts of the market and see what part of the pool you want to get in at. There is wholesaling, flipping, house hacking, BRRRR and more I'm sure. If you need cash - wholesaling may be a good way to build capital. If you like to get dirty and get a quicker pay out flipping may be your taste. If you want to take it slow and enter at the safer, shallow end, house hacking (fix and rent out parts, while living in it) is great. Or if you have the capital and want BRRRR it out for passive income and some ROI then this may be a great balance.

As with investing in stocks, you have to look at your comfort and knowledge level.

May your hard work, cross ample opportunities.

Glenn

@Bridget Chase

Great questions so let me point you to the tools section of BP.  Check out the House Flipping Calculator.  It is a great tool.  A little confusing at first but keep reading and asking good questions.

This will help you start the process of discovery and determining what your maximum offer may be.  As for Unknowns, I gather your talking about miscellaneous things that you didn't think about that come up.  That depends on how well you know flipping and by the tone of your question, you are just starting out.  So I would put in a good cash margin for "uhh-ohhs" and "who whudda thoughts" like 20-30% above what you think it may cost.

Doing your homework and getting a mentor is a great place to start.

May your hard work cross great opportunities.

Glenn

@Patrick Collins,

Many people are quick to point out fault, but it would be great for you to at the same time give some solutions.  Do you have any suggestions for your questions?  

1. "better off teaching you the flaws in your business plan" - can you give some pointers on a better business plan?
2. How could you have protected your investment better? 
3. How could you be using your time better?

Constructive criticism is much better than just criticizing.

My2Cents

Glenn

@Tony H Truong

I am glad to see you getting in to the game.  As for is it rude, no, this is business and you must do your due diligence.  As for contractors, I say definitely let them understand that you are looking at multiple contractors to see who you feel that you can work with and trust to do a good job.  I go so far as to even ask for references.  I look them up on the Better Business Bureau etc.  I ask for business licenses and insurance.  Along with this be truthful and let them know that you need their professional and ethical assistance on this project and don't want to be ripped off. 

As for how to start, I think that would be a great question to interview the contractors.  Ask them how they would proceed and how they can stay on budget and or save you money by how they would do it.

I hope all your hard work meets great opportunity.

Glenn

@Marla B.

Welcome to the BP group.  You are a very nice parent and I would say that starting to look now and on BP is a great place to start.  You may have already thought of these, but here  are some additional search avenues that you can use too. 

• I would start by putting Winston-Salem into the BP search field.  The results will come up with People who are there, companies etc.  
• Facebook - ping all of your friends to see if there is anyone you know and trust out there.
• Google is also a good place to start with connecting with a real estate agent and having them do the work for you.

As for what to buy, I would consider buying a multiplex (2-plex to 4-plex).  More rental income means less payments out of parents pocket.  And the biggest thing I would do is teach your child about all that you are doing so that they can do it them selves too.  The whole give a man a fish or teach him how to fish.

Good luck to you,

Glenn