All Forum Posts by: Jace Holt

Hi Robert, I am in the area but I do not wholesale. Good to meet you. I can direct message you about the local investor meetup. 

@Jo Lexington I am a developer and I currently have a project in Driggs. This year, Teton county moved the minimum lot size from 2.5 acres to 5 acres on the zoning for "single family". Keep that in mind if you are trying to subdivide. 

I approached the county about putting a small RV park in the Valley. The code they adopted has a 40 acre minimum for 20 spots, 60 acres for 30 spots, etc. up to a minimum of 120 acres for a maximum 60 spots. On top of that, they said directly to me they don't want it and essentially said they would try to prevent it. Depending on what you would want in there, they also regulate why the occupant is there, the minimum number of days they can stay, the maximum number of days they can stay, mandated vacancy levels, etc. Keep that in mind when considering modular units.

It's an extremely beautiful area. If you are close enough to Driggs that the land is touching, you may consider an annex and have more options available. 

I'm interested to hear how this goes for you and I'm happy to help wherever I can. Feel free to DM with anything.

@Sam Kemper We had a bunch of applicants during the last year come to us like this with a pile of cash from the government with no job or low income. However, if your applicant has the income, then that's a non-issue here. 

I'm not quite sure how you find yourself party to an eviction without knowing it, but that one is up to you on if she sounds legitimate and checks the boxes that you have. You can take the emotion out of a lot of this if you have checklists and thresholds that remove the ambiguity of the case by case scenarios. Those situations create scenarios where lots of well-intended landlords burnout. 

If this is your first ever rental, you may consider going with a more "vanilla" tenant situation.

Looking on your favorite listing website for something that cash flows is not a strategy. Sure, that absolutely works in various areas of the midwest, but that is the absense of a stragtegy in a market that's anything hotter than lukewarm. If you create a deal, there are always opportunities. I do not have enough capital or time to do anything about 95% percent of the deals I find. 

@Greg Scott That is a great point on finding strategic partners for this portion. I'm sure some of the others in the different parts the project would be happy to have a part on that side as well. Thanks for the suggestion!

@Greg Scott Thank you for the response! The loan is an in-house product from a local bank for construction so no involvment from Fannie/Freddie. I will likely just pay a friend or business partner to sign or give some equity.

More simply put, are there any people who have made a buisiness out of using their net worth to sign for loans which they find low enough risk in exchange for money. I trying to see if there is an entire industry or groups that regularly do this.

I am doing a project where equity investors do not have to sign a guarantee. However the bank financed portion will require one or multiple people to guarantee the loan with a net worth equal or greater than the loan amount. I am offering a fee for the guarantors. I patterned this structure after some other larger operators I've worked with. 

My question: Is there a market place or groups or directories of parties who offer guarantees?

I have used directories for hard money lenders and other service providers so I figured I would see if there is something for this.

I would end that lease as soon as possible. I'm very put off that they are trying to flex on you like that to try to manipulate you. Do yourself a favor and don't listen to any advice he is giving you. This is a personality problem, not a utility problem. That being said, a system does help manage personality if you design it well. @Bill B. suggested somthing that helps which is they must bring you a copy of utility bill and trade you for the keys. 

Now that you are at this point, simply send a notice to cure or quit and hopefully they exceed the deadline and you can remove them. Again, don't pay attention to anything he says about knowing more than you. He is trying to manipulate you and that is the main thing I see that causes landlord burnout.

I had a tenant shut off the power after the they had already turned it on. When the contract didn't say they had to turn it on, we approached it from the saftey aspect that they need to be able to see to egress in an emergency and the only way we could ensure their safety was a funtioning light system. Additionally this can actually slowly damage the property. With the utilities on, the building temperature stays relatively the same. Without utilities, the temperature in the building can fluxuate widely every day. Over time, this can cause a frost-heaving-like effect on the materials of the building. I have had to repair a floor after it expanded and buckled when sitting vacant and getting very hot during the day. Pipes can freeze to if the heat isn't on (also have too many stories on that). But the reason doesn't actually matter. As long as it's in the contract and that's what you want, then you can enforce. 

You're not alone in this experience. I could write a novel about that one tenant and the lessons I learned too slow.

@Jake Wiley

Thanks for the reply and sorry for the confusion. I'll try to clarify. I am doing developments for which I am raising money. I also am operating a separate construction company which will do the construction for the developments. Because I am profiting on both sides I dont want there to be an issue with conflict of interest. The issue would be that if an equity investor makes a percent of the profit on the development, they need to be sure I keep the construction costs as low as possible. If they were making money on debt instead of equity, it wouldn't really matter because they make the same amount regardless of the construction cost. That is why I have the interest to place them in a debt structure rather than equity.   

This is directed at others who have raised investment money in the past. I've raised cash for equity in the past but I'm interested in offering private second position debt that behaves similar to mezzanine debt and completely replaces equity investors. What are some of the nuances of offering debt vs equity for private money? If either have second position on recourse (secondary to cheaper bank financing money), they behave fairly similar (depending on the offering structure). The difference is debt seems to be a simpler and cleaner investment because the returns are spelled out exactly but the upside is capped. What returns are private lenders expecting in today’s development market? Has anyone used mezzanine debt and would they like to share any experience or insights?

The main reason I am interested is I'm taking over more of the construction side from a separate entity construction company that I will own part of. I just want a cleaner line so it's simpler to say what costs belong with the construction company and making sure things aren't overbid. Cost-plus contracting can somewhat address that, but it's almost worse because there is no hard line in the bid. It is not presently a problem, I'm just trying to look ahead and prevent conflict of interest with this business structure.