All Forum Posts by: Greg W.

RAM Construction in Bloomington

@Account Closed Erik’s last post was what I was going to suggest you do, develop a relationship, especially with an older or busy person who needs your help doing whatever. Ask what they need help with, ask if they have other properties, ask if they know of other people with properties and learn as much as you can. Maybe they will sell to you later. Then get educated in something that will help you later on. Help a developer, property manager or broker (maybe commercial)? Go into a field that will help you learn; commercial broker, commercial lender, accounting, financing (banking/lending). 

It’s great you are starting now. Keep doing what you are doing but expand it. Storage deals are limited but that doesn’t mean you can’t do other deals, gaining experience and income along the way, until the next storage deal comes along. 

@AJ Smith If you do take a W-2 job, take the one that pays the most first to build up cash and/or the one where you will learn the most about the path you want to choose. Best if they are one in the same but if not, go for cash first. 

AJ, Michael’s post was spot on. Get a W2 job for a few years. Buy a couple of properties while there and learn the big company’s processes of doing business so you can apply those to your side-gig job. Once your side-gig earns you enough money, make the jump. 

Where are you going to be living? If you are staying on Bainbridge, are there any facilities that might be interested in selling there? Owner financing?

Nick, this seems to be a 3 part question and most of this response comes from a CPA friend who owns farmland in WI.

1. The sentimental factor and emotion are important to consider. If it would upset them to lose this land, there's no price that can compare. If they are still actively farming the land and want to grow or someone in the family is or will be, then hold onto it. Prices are as low as they have been in a Once you sell it, you will never get it back in the family. It's gone. If they just want rental income, then it's not a great investment, from a cash perspective. However, if they see long-term upside, it could be a good investment. But slow and not liquid. That said, you can borrow at super low rates right now and they should borrow and not pay cash for the land.

Now for the second and third parts; the comparison, which you started doing. You need to come up with a price value in 10 years. What will the land be worth in 10 years? Now compare buying it vs selling it and investing in the stock market. Which one wins over 10 years?

It does change it a bit he only needs to pay 450. The real return on cash is 40/450. The 300 he has as his share is a sunk cost.

You would have to compare 300k in the market at some return (7%?) vs 450 with some cash flow and hold for 10 years with a 2m sell price. If that's their holding period does that make sense? Land is a stable investment but not liquid. And what do they want to do with the land?

My grandparents farm came up for sale I had no interest because its didn't cash flow and I didn't think it could appreciate enough in short term. It didn't trip my ego to say I have 200 acres of land.

Start close to home with a nice B property; good tenants, fewer headaches, etc. just to get an understanding of how it all works. Buying a duplex, as mentioned above, and living in one side while renting out the other is a great way to enter the game with low money down and gain valuable experience. The Des Moines area should be a good place to start. Look where you would want to live and buy something there. Good luck!

As a property owner, my concern would be if the AC isn’t running in the summer to keep moisture out, would it allow mold to form? If the heat isn’t running in the winter, would the pipes possibly freeze and break? If either of these scenarios were to happen, you could potentially be on the hook for damages to the unit. Also, your lease may state that you are required to turn on the utilities in your name and keep temperatures set above or below a certain temp. Nothing prevents you from turning the temps to those required levels. 

Has demand fallen so much that you can’t sublet it at half price? Possibly don’t advertise to college students if there won’t be many on campus.

Courtney, I haven't done this before but, from what I understand is you could purchase a house anytime before foreclosure for what they owe. The bank probably would not sell for less than the amount owed and probably wouldn't negotiate unless it's a smaller local bank or credit union. In a foreclosure, the bank buys the property for what is owed. 

You would have to see if the house is even worth what is owed on it in the condition that it's in. Look at the ARV (what are similar houses in the neighborhood selling for)? What are the rehab costs for the house? If the amount owed (what you would pay for it) + rehab costs are less than the ARV, then you might have a good deal.

Back to do you even want it; is it in a good area where there is demand for remodeled houses or demand for rent? If for rent, what are the rents and would they cover your mortgages, taxes, insurance, repairs and utilities? If you sell, include the realtor commission and holding costs (mortgages, taxes, insurance, repairs and utilities). I hope this helps!