All Forum Posts by: Jeff Kehl

@Thomas S. has it right. Most people live in a tiny house only in times of economic distress. Do some research. There was another tiny house trend in our country. Guess when? The 1930's in the height of the recession. Also, if you live in a very tiny house called a tent guess what we will call you? Homeless.

You can do whatever you want with your housing needs but here's my opinion. People will live in the biggest, nicest place they can afford and so they should.

@Caroline OConnor just to give you a different perspective...  when I see people paying crazy high prices for properties like that compared to what I'm used to, I just wonder, couldn't they build something cheaper?

So my only, possibly helpful advice is to talk with the local planning commission to see where they are allowing/encouraging duplex/mf development and to see if you could buy some land and build there cheaper.

In my area, you can buy some land and build two very nice single family homes plus make a profit for those numbers and we have better weather so it makes me wonder.

@Nicole Kimmel It's just really hard right now. Are you in a major metro and just starting out? I am in a small town and having plenty of problems finding competent, reasonably priced contractors.

The way I do it mostly is that I have done business with them for many years so they take care of me.

But, what I also do is to hire any new vendors I see for a small job and test them out. If they do well, they get added to the list and I use them more and more as long as they perform.

@Alex Rand if I was in that position I would contact as many commercial brokers in the area as possible and let them compete to help me with the property. Comparing the different responses you get from them you should get a good idea of the best person to help you. You will also generate a lot of interest/buzz for the property. Make sure to call everyone including national brokers, marcus & millichap, cbre, cushman & wakefield, jll colliers and also any local ones you get from a google search. Also call any local residential brokers that sell commercial properties. 

Ask everyone you talk to who is the best commercial attorney in town. You may or may not need them, just hire them if you're unhappy with the way things are going.

@Account Closed I would second the sentiment that more traditional education will probably not help you with CRE unless it's through connections you make with the instructor or other students.

I have an undergrad in Finance and had one class in real estate which was plenty of formal education for me. You can learn way more these days by listening to podcasts where they interview successful professionals in the areas you are interested in. Or by just attending networking events and talking directly with people.

And better yet pick your spot you are interested in and go to work and learn from them directly.

Having said that, I think if you're set on higher education, I think economics, accounting, marketing are all good areas to study.

And to add an oddball suggestion, study anything in Information Technology. After my finance degree I spent 30 years doing IT. And at this point IT is the future of virtually every company out there.

So, let me get this straight... you would like me to loan you money on an asset where you put no money in and I can't sue you to recover anything if things go bad?

Sure, unbelievably that is sometimes possible. But there has to be some type of extenuating circumstances.

For example, if a broker had access to all kinds of off market commercial deals that were way below market and were guaranteed winners sure I would do that.

But 999 out of 1000 people that ask that aren't that case.

@Xavier Kelley it's a bit hard to answer your question without knowing more about you, where you're from and what you're looking to accomplish with real estate.

I think buying a 4-plex with an FHA loan and "house-hacking" is about the best thing for young people who aren't married. However for people that are further along in life and with more family obligations it probably won't work.

@David Cox if you look back at my prior post you'll see that I am probably the biggest cheerleader on here for Rome, GA. I live and invest here and have for 10 years now.

I like the fact that we are just an hour from downtown Atlanta if traffic cooperates but the prices here have not run-up like they have in many areas around Atlanta because we're off 75. 

I also think we have been a bit of a hidden secret in that we have a historic downtown with great shopping and restaurants, mountains, rivers and hiking trails.

We also have a decent economic base. Further east of us like Calhoun and Dalton, while right on 75, they are heavily dependent on the flooring industry which gets hit hard in a recession (just look at their unemployment rates in 2008-2012).

Rome also got hit hard during that time but not as bad because we have 4 colleges and universities and 2 major hospitals. Also, there's a lot of specialty manufacturing here mainly European and Asian companies that they have done a good job of recruiting.

To be fair, I am majorly biased because I own over 200 rental units in the area. I am also slowly selling off some of my sfrs and smaller properties right now because although they are good investments the numbers are not nearly as good as in the past and I am trying to move into only apartments and other large properties.

There are some great property managers here but it can be hard to find decent contractors for a reasonable price. If you want some recommendations pm me. 

@Zac Kay to echo what Joel said above, age of building and construction costs are probably the issue of they wouldn't sell it so cheap. I live in a historic town where it's very fashionable to buy the old downtown buildings and fix them up with retail downstairs and loft apartments upstairs. None of the ones I've looked at make very good financial sense once I model them out. 

Your situation could be different given the low purchase price and the fact that you'll owner occupy. But definitely do your homework on construction comps, rent comps and vacancy rates for similar properties or you'll just buy yourself a headache.

@Jon Gorman it sounds like you've done very well without much commercial RE experience so first off congrats on that.

But, assuming you want to keep going and expanding in CRE here are a few suggestions.

You said you based your rents "what was just enough to cover the mortgage and personal loan and all operating expenses". That's not a great strategy longer term because you likely left out things like capex (new roof in 10 years),profit and vacancy. 

You should base your rents on comparable rents in the market. The fact that you are 100% occupied suggests to me that you are priced below market. Not a bad thing, just means that you should aggressively raise rents to get them to market as allowed in your lease.

Also, I agree with the comments above that you should try to move to NNN leases to reduce the hassle to you. Let the tenants take care of those expenses especially if that is common practice in the area.

To get there you'll need to get better leases.

To achieve better rents, leases and additional properties, you have two choices 1) Do a lot of research or 2) Find a good commercial broker who specializes in this in your area. I believe #2 is a much better option for you especially since your main gig is as a medical professional.

They can help you evaluate your current property's rents and leases and then find you additional properties to expand. You will likely make more money that way and have more time to concentrate on your medical practice.

You can find them by looking at similar properties for sale or lease on Loopnet or CREXI in your area and talking to commercial brokers in the area. You can also google 'commercial broker in location' to find them. Marcus & Millichap, CBRE, JLL, Colliers, Cushman & wakefield are national names that likely have local offices nearby.