All Forum Posts by: Greg C.

I am wondering @Henry Clark how you got your foot in the door when it comes to commercial real estate, and specifically self storage?

Unlike the residential side of RI, the financing structures and regulations are quite a bit more complex — or at least that is what it appears to my untrained eye. Do you have any introductory reading materials that helped you get started, or any reference materials that you might suggest for a newcomer. I am specifically interested in how a person or entity would go about getting a commercial construction loan when they are a new business venture with limited capital, and no commercial portfolio to speak of. Should I leverage other assets, bring in investors, etc. etc.?

Forgive my unusual answer, but I think this idea bears saying since it is not often acknowledged.

Some of the greatest YOY appreciation to be found in Ohio is not in SFH or MFH, but its land. Farmland to be specific. Even more so than other agrarian states.

This is because of the high Amish population. Amish families will have between 5-10 kids on average. And most will remain Amish. When the children reach adulthood and get married, they enter into the church and are expected to have a farmstead of their own. This makes ag land a hot commodity in OH, and has gien rise to auctions that see farms and farm homes sell for shockingly high prices. Many Amish also recieve subdivided land from their parent's estate, and these smaller parcels are not enough to support traditional Amish lifestyles. As such, there are hundereds of buyers eager for bigger properties.

All of this can also lead to big windfalls for commercial developers. Since many Amish men do not have enough farmland to make a living, they will instead work in light manufacturing or commercial ag. Amish *generally* do not unionize and they are a great pool of labor for businesses. This is why you will often see large and successful manufacturing plants out in the middle of nowhere in places like Ohio and Indiana. 

Depending on how liberal the Amish community is, many Amish are also interested in investing in single family homes and multi-family homes. Hence, there is an unexpectedly competitive market emerging in smaller ohio cities.

Real estate contracts and options are primarily regulated by states, not the federal government. So if any changes are to come to owner financing or other creative financing it would probably happen at the state level.

As someone from out of state, Jackson scares me as an investor. It has the outward appearance of a blighted market, on par with places like Gary, IN or Detroit, MI. The shear volume of tax liens that I saw on auction there a month or so back was stunning. Visually, it looked as though 50-60% of some neighborhoods were up for tax auction. Even now there are SFH available as tax forfeited properties for a couple thousand dollars. To me, this speaks volumes about the local market. I am sure locals would be able to sift through the area to find the gems in the rough, but I can see why out of staters need to yield caution.

To be honest, nobody needs a course or a guru to invest in land. There are lots of books out there on the topic and free resources. I have listened to Mark's podcast here on BP, and nothing he said sounded fishy or scammy about it in nature. 

The fact remains, that land has a low barrier to enter. Parcels can be picked up for a mere fraction of their appraised value in many areas. Like anything else, you do have to put work into it, and it is not 100% passive - but neither is managing tenants, contractors, or rental agreements. Making money early on requires sweat equity, no matter your field or system.

And land contracts are not the only way to sell land. OP seems to imply that most land is a hard to sell commodity, but this is only true if you lack imagination. Land can be flipped quickly without a land contract with the right connections. The book Investing in Vacant Land by John L. Pehrson explains many creative uses for land. It can be subdivided, marginally developed for recreational purposes, rezoned, improved, and be leased to telecom/advertising companies. All of these are profitable uses for land.

Also, even though getting a loan on raw land is difficult, it is also a low barrier investment. Profitable land can be cheaply bought for a few thousand dollars and sometimes less. Tax lien investing is also an option.

Hello Brandon,

I do not consider myself a wholesaler (although it is a minor part of my real estate strategy). My advice would be to get in contact with a reputable local attorney who can guide you through how assignments and double closings work. Also, consider joining your local REIA for mentorship and guidance from investors who are used to working in your area.

Wholesaling has become a heavily saturated field. Everyone and their sister thinks that they can wholesale thanks to the proliferation of real estate gurus promulgating this approach. There are certainly possibilities to be successful in this area, but these days it is larger wholesalers with people and systems in place who seem to be having the most success. Everyone else is left fighting for scraps, especially in big city markets. It is not something I am interested in anymore, except in some specific circumstances.

Then there is Wisconsin Real Estate Law. WI Stat § 452.03 (2018) states:

Except as provided in s. 452.137, no person may engage in or follow the business or occupation of, or advertise or hold himself or herself out as, or act temporarily or otherwise as a broker or salesperson without a license issued under this chapter. The board may grant a license only to a person who is competent to transact that business or occupation in a manner that safeguards the interests of the public, and only after satisfactory proof of the person's competence has been presented to the board.

Then you have this regulation:

WI Stat § 452.01 (2018) 

(2) “Broker" means any person not excluded by sub. (3), who does any of the following:

(a) For another person, and for commission, money, or other thing of value, negotiates or offers or attempts to negotiate, whether directly or indirectly, a sale, exchange, purchase, or rental of, or the granting or acceptance of an option to sell, exchange, purchase, or rent, an interest or estate in real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property.

(b) Is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or businesses, including businesses' goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or businesses. Five sales or exchanges in one year or 10 sales or exchanges in 5 years is presumptive evidence of a pattern of sales or exchanges.

This is an absolute death clause, if you ask me. Since it precludes you from making more than 10 sales in a five year period, even on property where you have an interest. But perhaps a local attorney could guide you through this regulation in more depth. It would seem that attorneys also have leeway to make real estate transactions under WI law, so they are a good place to start your discussions about wholesaling if you are trying to do it right.

You can also wholesale out of state, but keep in mind that each state also has its own rules and regulations as well. Wisconsin seems to have some of the easier real estate licensing education requirements, so it may be worth it to just go that route and wholesale 'legally'.

Hey everyone, looking for a little help here.

For those of you who buy tax sale properties, and eventually get a tax deed conveyed, how often do you do a quiet title action afterwards?

If I do not do a quieting action, on average, how much less can I expect to recieve on a property where I only convey my interest via a quit claim? If anybody can offer their personal experiences with this, it would be very helpful. I know that there's going to be a lot of variation from property to property and community to community, but I am just tryng to get a general sense of best practice.

I am set to acquire a few C properties via tax deed in the next month or so after going through the legal process, and possibly some B properties next year. I do not think that some of the properties have a retail value that is worth a quiet title action. In that case I am thinking it would be better to sell via quitclaim. I'm just not sure how low of a price I should be asking relative to a warranty deed.

Quote from @Arif K.:

Thanks @Andy Sabisch for running those sample numbers. I will likely put it on rent if the resale value is not where I want it to be. 

Thanks @Greg C. for educating me about this area. I just saw that the school district for this property, Homewood-Floosmoor HS, was highly rated and that got me interested. This information really helps. My agent also showed me some median sales price for homes in Hazel Crest, Homewood, Flossmoor, and Olympia Fields. I was surprised to see that Olympia Fields had a higher median sales price than Homewood, even though the school district was rated much worse. I wonder what else could be the reason for that.

Yes, Olympia Fields is a bit of an oddity. The schools are not that great, but the median incomes are pretty good. Also, you have a major Country Club there that has hosted PGA events in the past. Many people in town send their children to private school or they pay out of district fees to send their students to Homewood Flossmoor. It could definitely be a good place to invest as well. But you will want to be a little careful.

Hazel Crest has had alot of challenges with blight lately, and it may not be the best target relative to Homewood. 

Yes, Homewood is one of the most desirable communities in the South Suburbs, and a good place to invest. 

The neighborhood will play a role in your potential flip, however. You will want to ensure that the properties are within Homewood School District 153 and within the Homewood Flossmoor High School District. There are a few sections of town that are not. Also, the neighborhoods in and around the Downtown are generally seen as most desirable. Other popular areas are those around Willow School, Ravisloe Country Club, and Isaac Walton Preserve. 

Sections of Homewood that are West of Governor's Highway have traditionally been viewed as being a little less desirable since the houses in the area are farther from the walkable downtown/transit and that part of town has suffered from some minor blight over the years. Although there are definitely some good homes in the eastern part of Homewood, you will want to be careful. Also, some of the housing stock around 175th street and Dixie Highway is also poorer than average post-war housing, so do due diligence if you are looking in that area too.

I used to live in this area for many years, but I am not up to date on the current market since I now live in NC, but your rough strategy seems passable. Finally, I will tell you that Flossmoor (next to Homewood) could also be a good spot to invest, especially near the Metra Electric Station.

Hey Asad, @Matthew Bailey is right. His is the same good advice I have heard on BP podcasts and read on various blogs and forums. 

There will often be times that you have no choice but to pay for a list at places like AgentPro247, especially with tax delinquency data. However, depending on the county/municipality and their online GIS platforms, you can also perform free attribute queries to generate lists as well. In some counties you can even pull tax data and cross reference it with vacant lot attributes, which can generate some hyper competitive lists that are better than what you can buy elsewhere. As I understand it, many vacant land investors focus on tax delinquent properties or properties with absentee owners since they are more likely to sell for a low ask and these are two common attributes that are used to generate lists (among others).

I generate lists like this for a living as part of my 9-5 job, and in many areas of the country I can generate very advanced lists using offline GIS layers and other data sources (some free, others paid). Feel free to DM me if you need any help. Its not very good compared to many municipalities, but Hillsborough County does have a couple of online GIS viewers where you could start generating some basic lists.

For instance, you can click this link which takes you to the appraisers website:

https://gis.hcpafl.org/gissearch/

Then, on the right hand side, select the advanced search button (looks like a magnifying glass). From there you can apply some basic filters to create a list and export it to an excel file which you can then edit and upload to a direct mailer/yellow letter marketing website. The whole process is surprisingly fast and easy, and better, it is free. Of course, more advanced lists can be created as well by a professional using all kinds of data including traffic flows, parks and rec, crime, probate, etc. Then you can really target people in unique ways with some really hand-tailored messages.