All Forum Posts by: Mark Dante

Charles - Thanks for the reply.  My question, however, is:

a.  What kind of settlement fee (closing fee to the settlement company, NOT including title insurance) is to be expected, and

b.  Do those (on this site) who purchase foreclosed properties typically purchase title insurance.  (I hate to pay $5000 for title insurance for properties that I plan only holding for a year..hopefully shorter.)

thanks

Mark

Question:  My cousin and I are looking at a few properties in western Pennsylvania (just outside of Pittsburgh) .  I've called around and I've got a few prices from settlement companies, but I don't know if I've been quoted a higher amount because I am out of town.  For those who have purchased multiple properties and have used the same settlement company, what kind of settlement fee do you typically pay?  I'm seeing about $325 to $350 (PLUS title insurance).  Any recommendations for settlement companies in Pennsylvania?

Also, a separate question.  For those who purchase foreclosed properties with cash, do you always purchase title insurance?  I'm looking at some properties that are cheap (and its for a good reason - they need a LOT of work).  It appears that in Pennsylvania there is a minimum cost for title insurance.  For example, I looked at a portfolio of rehab properties  with an average price of $15K each.  Title insurance looks to be about $550 for each property.   If I purchase 10 of these houses, I'm looking at $5500 in title insurance on houses which I hope to only have for a year.  So for those who purchase cash for foreclosed houses, do you always get title insurance?  

I'm thinking of buying a .66 acre commercial lot for $60K and building 6000 to 7000 sq ft of storage. Automated overlocks, no onsite manager. I figure I could get 30 or so 200 sq ft units out of this. I've never done storage before.

Does this sound feasible, profitable? Or is it too small? I don't mind small if it runs itself.

Does anyone know what to budget per sq ft for a cement block storage unit?

Does anyone here know how much additional cost I am looking at by adding a climate control system to this project, and is climate control really necessary? By climate control I mean structure would be insulated and foundation would include heating coils to eliminate the moisture.

Thanks

First thing I'd do is check to see what the county/municipality zoning code says.  You may not be able to put self storage on commercial.  Where I am located, you need to be zoned industrial.  I'd also check to see what competition is like in the area.  Alot of people prefer to use a facility that has an onsite office simply for the perception that it is more secure.   Not to get ahead of ourselves, but you should think about re-sale.  When you go to sell, most prospective buyers want to be able to expand.  If you are fully rented (30 units at, say, $100/month) with no room to expand, there is little upside for a buyer.  

As for cost, site work could run as much/more so than the cost of the building (which is another reason why I'd go bigger than a space for only 1 building). 

I'd suggest scrapping climate control.  People will not want to pay for it, particularly if the facility isn't manned.

@Molly MacGregor A few questions, hope you dont mind.

What are the properties doing for security?

 - gates (with individual access codes) and security cameras.

How do people sign up for new units and does someone physically meet them to show them to their unit?

- physically meet them (though there are kiosks out there that some facilities have.

Automated billing with credit cards and what software is being used?

-  auto bill as much as possible.  And there are several software companies. I use Quikstor.  

What is involved with turning a unit?

-  Average tenant rents for 1.5 years.  Not much you do during that period.  Have tenants who have been here for years and wouldn't recognize them if they stopped me on the street.

How do you handle when someone stops paying or is late?

- evict them but you must follow the state statute. 

What is the biggest frustration with these units?

- not very exciting!  But allows you time to do other things.  Ours is a pretty good size (500 units) and even then we might not get but one or two phone calls throughout the days a few days a month.  (Now the first week of the month is a different story.)

Here's the situation.  We (landlord) are entering into a long term ground lease with a tenant.  The state charges a transfer tax onleases if they are 30 years or greater.  So in order to avoid the tax, we are going to enter into a lease for 29 years 11 months and then give them options thereafter.  We were told that setting a price on the option may result in the transaction being deemed a transfer. If that is the case,  how would you recommend a price be determined after the 29 years are up?  We have already agreed on the lease amounts up to that point.  Would you suggest having two appraisers each provide a value and then take the average?  

Edit:  When I mentioned appraisals, I meant to say that we indicate on the option (after 29 years) that the lease amount shall be determined based on the appraisals so as to avoid having a specific amount listed on the lease.