All Forum Posts by: Jeremiah H.

It sounds as if your current properties are all local to you. That seems to have worked to this point and you seem a bit concerned with long distance land lording. I would take less returns and stay local rather than chase higher returns but add the long distance factors. 

If your goal is to retire in 16 years from your current job and have your real estate paid off at that point then I would continue to invest until you find the point where your debt equals what you can pay off by your retirement date. At that point you live off the cash flow the rest of your life. 

But more than likely plans will change between now and 16 years from now. As successful as your real estate has been to this point you will soon get to the point where the time spent at work won't be worth the opportunity cost. I'd be very surprised if you made it 16 years with this job. 

Good luck in your future. You've killed it to this point.

I'm in Tavares area and would be interested if this happened. 

I used to live in Irmo, SC and I love that area. I would invest in properties you can drive to. I'm scared of the Texas market even though it super hot currently. If you stay out of the bad areas of Columbia I think there are plenty of opportunities in your area to make money. 

Returns are much better in Florida in my experience. I give advice based of what I would do. I would sell that property and reinvest that money in Florida. I'm in Central Florida and getting 1% monthly rent back on your purchase price isn't hard to find and with any work higher returns than 1% are readily available as well. You're currently getting .56%

I'd rather own my properties in my immediate area, especially when returns are much better.

Sub Dividing was covered on Podcast 82 and 119. 119 was the podcast with Graham Mink, professional hockey player. Podcast 82 was with David Krulac that has done 800 deals and covered land sub dividing.

Is in in Orange County? 

Thank you. There is more due diligence to be done, to this point its a block structure and the roof is 10 years old and its rock solid. The market in my area is good for this type of property. The buildings can be used for such a wide variety of uses that I see absolutely no issues with keeping them rented if I keep the rent rates where I'm thinking.  

One of the things I'm conflicted about is how much to raise the rent on the single unit tenant to the point where it closes the 59% gap on the 4 four unit building. If he leaves as a result I'll split that building into 2-4 units but be able to increase the rent roll. The cost of splitting the unit into multiple units is minimal. They were built for flexible uses.

I didn't ad this into the original post, but my dad and grandfather built these building 30 years ago. My dad is still alive and is very familiar with the structure and how they were designed.

This will be my first commercial property deal. I currently have the property under contract and feel good about the returns, but I'd love to hear what you guys think and how you would break down the deal.

Two identical buildings on one piece of land. One is split into four units, the other is being rented as one single unit. The split building is being rented for 59% more than the single unit building. I've run my numbers based off the single unit tenant staying, but splitting the property into multiple units would be much more profitable.

All units have been full for 8+ years due to the rent being far under market value. The owner is an absentee landlord by his own admission. Renters are currently handling all their own repairs due to the low rent. These buildings are block structure, each with their own bathroom, no furnished heat or AC but some tenants have added it themselves. Very little maintenance issues due to the simplicity of the structure. All of the tenants are on a month to month contract.

Cap rate is 10.19% with the low rent rates. I believe I could increase the rent 22% and still be under market value and likely continue to keep these tenants. Raising the rents will move the cap rate to 13%.

Financing will be done through the seller at 25% down, 7% APR, 30 year amortization with a 5 year balloon.

Cash on Cash is 29%

I'm a passive residential investor. I don't have much experience with commercial other than renting for my own needs. This seems like a homerun in my world. Have I missed anything? Any glaring concerns?

Thank you so much!

This will be my first commercial property deal. I currently have the property under contract and feel good about the returns, but I'd love to hear what you guys think and how you would break down the deal. 

Two identical buildings on one piece of land. One is split into four units, the other is being rented as one single unit. The split building is being rented for 59% more than the single unit building. I've run my numbers based off the single unit tenant staying, but splitting the property into multiple units would be much more profitable. 

All units have been full for 8+ years due to the rent being far under market value. The owner is an absentee landlord by his own admission. Renters are currently handling all their own repairs due to the low rent. These buildings are block structure, each with their own bathroom, no furnished heat or AC but some tenants have added it themselves. Very little maintenance issues due to the simplicity of the structure. All of the tenants are on a month to month contract.

Cap rate is 10.19% with the low rent rates. I believe I could increase the rent 22% and still be under market value and likely continue to keep these tenants. Raising the rents will move the cap rate to 13%. 

Financing will be done through the seller at 25% down, 7% APR, 30 year amortization with a 5 year balloon.

Cash on Cash is 29% 

I'm a passive residential investor. I don't have much experience with commercial other than renting for my own needs. This seems like a homerun in my world. Have I missed anything? Any glaring concerns? 

Thank you so much!

 I would consider selling the property if it was mine. If you didn't already own this house would you buy it to rent it out? The likely answer is no, so go ahead and sell it and if you want to have a rental house use that money to buy a better rental property.