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All Forum Posts by: Jeff Kovac

Jeff Kovac has started 3 posts and replied 25 times.

Post: First commercial property, looking for input for development of best use

Jeff KovacPosted
  • Real Estate Investor
  • Glacierview, AK
  • Posts 25
  • Votes 2

Thanks so much for all your input. Read posts earlier today but this is first chance to respond.

Thank You to Karen, Paul and Jeremy, this information was exactly what I needed! 24 hours since the post went up and already making progress.

Spent part of the day plowing snow and part chasing information from your suggestion.

Paul - Thank you for the quote. I've done "Something" on many other occasions and have achieved... mixed results. But we will keep learning and moving forward. Also, thanks for the confirmation on the math.

Cant go the jewelry rout, in real estate terms I believe you would say... we have a very small equity position.

Progress on The Team -
Real estate attorney - harder to come by than relaters around here (refer to the above post) but I've got a lead on one - we will see where it goes.
Architect - One in the family, (he is just down the road in Mesa).
I've spoken to the planning board in the past and will revisit that topic.
Setting up an informational meeting with the Banker.
Line on a CPA

And my wife, I cannot say enough about my wife. We have a small business that she works to keep us funded. I help out about 3/4 time and do the paperwork which allows me to chase the property. For 10 months we lived in a 30' travel trailer parked in a fairly busy trucking yard just to get a toe hold here. We're all in.

Jeremy and Karen - Started today to make inquiries for a feasibility study. Closest option is about 200 miles away. They are a bit out of this market I think, but its a start.

Thank You all again, I appreciate the time you have taken with me.

If any of you are ever going to Alaska let me know, I'll put the coffee pot on.

Post: First commercial property, looking for input for development of best use

Jeff KovacPosted
  • Real Estate Investor
  • Glacierview, AK
  • Posts 25
  • Votes 2

Thank you for the reply Karen,

Allow me to explain, because of the Energy Boom we seem to have two types of real estate brokers here. First is the original relater from before the boom that worked property in a ranching and farming community. Very little commercial development taking place before the boom and those that have a handle on commercial are keeping themselves so busy there tough to track down. I'm sure there out there - maybe one will read this post and respond. Our second type of relater has moved in with the boom. My experience has found them to be knowledgeable on commercial properties but mostly from there home area. They are all buried under so much activity and overloaded with inquiries that there is just not enough hours in the day to return all the calls. That is partially why I came to this site.
By the way, I,m trying to figure out how to set a lease price. Is the purposed lease payment based on the return you want to receive from the value of the property? simple example 100,000 property with a 12% return = 1000/month land lease. I cant locate any market examples for comparison.

Thank You

Post: First commercial property, looking for input for development of best use

Jeff KovacPosted
  • Real Estate Investor
  • Glacierview, AK
  • Posts 25
  • Votes 2

First commercial property, looking for input for development.

I offer the following as back ground and would ask for your input.

Energy booms create many types of opportunities, and after working in three, Alaska, Wyoming, and North Dakota, we have firsthand experience of their cycles and trends. As we were working our business (not real estate related) in early 2011 it was hard not to notice the scale of real estate activity and the potential that this boom was generating. Since then we've had several near misses with property and have learned some hard lessons. In early 2012 we began to see a following trend developing in our area and made a short list of the attributes a property would need to be of value. We located a parcel of commercial property that fit the criteria and secured its purchase. Wiser from our first experiences, we did a few things differently and we are now in the final stages of closing.

That brings us to my current situation which provides more questions than answers.

Here is what I know:
Property will be Commercial – supply is low - demand is high
Located in an area with quick access to all main travel corridors
Parcel is 1½+ acre
Property has a permanent easement for access through a large, well established and shared entry with a new restaurant (In operation 5 months and drawing 300% of original projections)
One of three new hotels is across the street (Open approx. 6 month and booked for the foreseeable future)
Property is ready for the shovel
City plans to pave frontage road
Property has all city utilities
Property will be purchased using an llc (one silent partner - I am majority owner/managing member)
The property will be debt free at closing

**As an additional note - I am purchasing the parcel from the owner of the restaurant and have an agreement with him not to build a competing restaurant on my property.

I’m sure there are many others but it seems I have four basic options:

#1 – Land Lease
#2 – Build to Suite
#3 – Lease Purchase of some type
#4 – Flip for prophet and move on

While many would quickly say that all booms will bust (and, for the most part that would be correct) there are nearly always areas within that Boom that, for many reasons, attract and sustain the highest and longest growth patterns – This property is located within an area fitting that description.

As this property would provide ample parking (a problem in this area) and quick access to residential and multifamily developments as well as being positioned near the intersection of the major traffic patterns I believe this property would be well suited to a national or regional store front or perhaps a financial institute or office building. All are needed in this area. Unfortunately I'm not quite sure where to start with this type of project. If these are a no go, I am not in a panic as the property will be debt free and I can continue down the list of other commercial possibilities that could fit here as well.

Because of this, it would be my first inclination to explore all reasonable options that would allow for a buy and hold strategy.

I will answer all inquiries as completely and accurately as possible.

Thank You, in advance, for your time and consideration.

Best Regards,

Post: North Dakota rental property investment

Jeff KovacPosted
  • Real Estate Investor
  • Glacierview, AK
  • Posts 25
  • Votes 2
Originally posted by Jeff Kovac:
Hello Mike, have you made a decision on your property in Williston. I'm located a short drive from there and would be glad to give you some local insights. Send me a message if you are interested.
Regards

Post: North Dakota rental property investment

Jeff KovacPosted
  • Real Estate Investor
  • Glacierview, AK
  • Posts 25
  • Votes 2

Hello Mike, have you made a decision on your property in Williston. I'm located a short drive from there and would be give you some local insights. Send me a message if you are interested.
Regards