All Forum Posts by: John Canchola

Congrats on your residential portfolio.

In my opinion, tapping that much into your portfolio is risky for me because you are speculating on an empty building not producing income with a long-term tenant. You are setting up yourself to risk. Finding the right tenant for commercial space is nothing like finding a tenant for a house. You will now be paying on a new loan you took out against your residential portfolio and hoping you land a tenant that will be permitted by the city redevelopment department to approve the tenant that wants to move into that building. KEEP IN MIND city redevelopment departments have a lot of red tape to go through and this can take months before your prospective tenant is at the mercy of the City to be approved and then follows up with your tenant checking off all the requirements boxes the city department needs your tenant to get completed before moving in /opening up its doors for business. In the meantime, you have two or three residential tenants move out, three water heaters go out or HVAC...all of a sudden your in a cashflow crunch. Don't bite big if you you THINK can't swallow. I'm coming from exact personal experience.

Thank you all for your responses. I have decided to go find another Broker that is a go-getter. 

Hi Rhett

Thank you for your response and heads up. We did a thorough inspection and yes you're correct, at first we were told there was only two tanks. The contractor found a third one. 

Quote from @Ronald Rohde:

Quote from @John Canchola:

Quote from @Ronald Rohde:

Whats the zoning? commercial as in retail?

 Hello Ronald

Yes sir...its zoned C-3 Commercial and is allowed for retail. Existing on this 2 acre parcel is an abandoned gas station with a 2,400 sqft convenience store and 3,400 restarurant. I bought just over a year ago on a NNN lease corporate tenant that filed Chapter 11 on us 7 months into our new purchase and left us with alot of fires to put out with the State of Oklahoma and other local governments. Its been a nightmare and now I am trying to make lemonade out of lemons. I hired a local commercial real estate broker (NAI) to help lure in some developers or franchise brand retailers but I am not getting many updates since we've been in the listing contract for the last 7 months.

I decided to start hustling and start making phone calls and sending emails to national brand retailers that already have some freeway locations in different regions on the OKC map and see if they are still expanding to other locations.  I am offering Seller Financing with flexible and favorable terms due to recognizing today's interest rates is not pushing many developers off the fence. 

Next week the 3 underground tanks are getting removed, soils tested, and if cleared for phase 1 or 2 then backfilled. If it happens the soil is contaminated, the State of Oklahoma fund will pay for the cleanup for soil clearance. Glad this happened to be in OK and not CA.

The reason I am not going to operate it as another gas station is due to the bigger brand competitor (QuickTrip) is in the middle of developing a big new convenience store gas station 500 feet away. Therefore I am looking at this as an opportunity to capture the vehicles now pulling off the freeway as an advantage. 

I am selling the property with terms to Seller Carry or partner up with a developer or if the franchise brand wants to build to suit with a ground lease then I am all open to any of these options.  

 You gotta list it. Do you have a huge sign on the property?

Ronald, thank you for staying engaged in this conversation and offering your input. 
Yes sir...I do have it listed with a broker and I paid for several large signs and placed them on the property. As of today, the contractor just notified me that the 3 underground fuel tanks have been taken out, the large pits are now backfilled and samples of soil have been sent out to the lab for testing.

Quote from @Henry Clark:

Recommend you use Loopnet.  Look up properties for sale or lease and identify the most active Realtor for that city, for your type of development property.  Ask them for 2 or 3 commercial developers.

If you're near the corners, your traffic count is the 85k. Gas, fast food, etc.   If you're in the middle between interchanges, your traffic count is the local street count.  Shops, oil change, tire repair, etc.  Also depends if you're on the way going out or coming in and how far to the next city, example Edmond or Norman.

 Hello Henry

I appreciate your feedback. I will follow your suggestion to find an active local agent and see if he/her can provide 3 commercial developers.  Presently I do have a franchise commercial RE broker (NAI) but I do not feel he is hustling for the $80k commission he is contracted to receive for just marketing my property on their website and told me he made some phone calls. I think he is working with a small circle of brokers in the City and is complacent with his minimal duties. I just get that feeling. He didn't even have a For Sale banner nor even suggest they would provide one. I ended up encouraging this banner idea to him and he agreed. I paid for the banner and the installation. 

This is why I love this BiggerPockets site because it brings like-minded real estate investors from different fields who come here to seek and provide opportunities to others and not be complacent in life and grow their experience and portfolios. 

Quote from @Ronald Rohde:

Whats the zoning? commercial as in retail?

 Hello Ronald

Yes sir...its zoned C-3 Commercial and is allowed for retail. Existing on this 2 acre parcel is an abandoned gas station with a 2,400 sqft convenience store and 3,400 restarurant. I bought just over a year ago on a NNN lease corporate tenant that filed Chapter 11 on us 7 months into our new purchase and left us with alot of fires to put out with the State of Oklahoma and other local governments. Its been a nightmare and now I am trying to make lemonade out of lemons. I hired a local commercial real estate broker (NAI) to help lure in some developers or franchise brand retailers but I am not getting many updates since we've been in the listing contract for the last 7 months.

I decided to start hustling and start making phone calls and sending emails to national brand retailers that already have some freeway locations in different regions on the OKC map and see if they are still expanding to other locations.  I am offering Seller Financing with flexible and favorable terms due to recognizing today's interest rates is not pushing many developers off the fence. 

Next week the 3 underground tanks are getting removed, soils tested, and if cleared for phase 1 or 2 then backfilled. If it happens the soil is contaminated, the State of Oklahoma fund will pay for the cleanup for soil clearance. Glad this happened to be in OK and not CA.

The reason I am not going to operate it as another gas station is due to the bigger brand competitor (QuickTrip) is in the middle of developing a big new convenience store gas station 500 feet away. Therefore I am looking at this as an opportunity to capture the vehicles now pulling off the freeway as an advantage. 

I am selling the property with terms to Seller Carry or partner up with a developer or if the franchise brand wants to build to suit with a ground lease then I am all open to any of these options.  

I would like to consult with an experienced developer who has experience developing small lots. I have a 2-acre lot on a busy freeway (85k cpd) with convenient on/off access.

Awet Hagos - can you tell me what banks are financing at 30 amort for investment properties? (single-family homes and up to 4 units). I have only found the typical term across many banks such as - 20% down, 20-year amortization, and around 5% p/i. 

@Michael P.  
" That is like watching WWE wrestling to learn how to fight in a street fight "  Priceless statement!

Good read. Thank you