All Forum Posts by: Melissa Odom

I am waiting to hear back from another commercial broker today.  Hopefully, he will give me a better idea of what I am dealing with.   

Yes, all the numbers I have are based on my limited knowledge.  Need something more concrete.

That is what I have here except I don't have to buy the distressed property.  I already own it.

So, the answer to your question, in my opinion, yes.  I just need to figure out if the numbers can back that up.  Where do those numbers come from?  I have an idea, but nothing that is backed by concrete data. That is where I am struggling.

@Ronald Rohde

Thank you for your response.  The current rents are really low because the tenants are responsible for doing any and all repairs on their buildings (which in my opinion contributes to the poor condition of the buildings).  So, I don't think they would be able to stay.

There is currently no loan on the property.  I am thinking construction loan, but how to pay for it while the construction is going on is a different story.  

@Ryan Kelly Thank you for the response.  I had not thought of that since I am not buying or selling anything.  Do they charge a fee since there is no commission on their end?  

Hi BP Community,

I have a small family-owned shopping center in Wimberley, Texas.  It is in a perfect location (off the square) in a very popular tourist town outside Austin, Texas.  The problem is the buildings are in major need of repair...and because of this, rents are one of the lowest in town.  Speaking to a contractor, just to remodel 3 of the 8 buildings could cost around $750,000.  To rebuild would not be all that much more due to the work that needs to be done.  The lot is 0.25 of an acre.  

Some thoughts that go through my head......

Who do you contact to get current values, after renovation values to see if this process is even worth it? How do you get accurate numbers to determine ROI? I have ideas of the values, but nothing based on anything concrete.

If I take out a construction loan, how do I pay for the construction loan during the process?  I won't see any rents or income until after the construction phase is completed.   

If we do a full rebuild, are retail shops the most profitable?  There is one upstairs apartment that can be turned into a str.  Should I add one or two more?  Or should I consider the possibility of adding in a small restaurant?  What gives you more bang for your buck?  Which ones will still deliver in a down market?  Or should I create a combination of all three?

As I start down one path, I have more questions which leads me down other paths with even more questions. 

Any advice is greatly appreciated.  I have 3 long term rentals, but this is my first time with commercial property.  The property is mine and my brother's inheritance so I am looking at it as a long term investment.  

Thanks for your time and help,

Melissa
  

Thank you for all the great information! Hearing from all of you with experience makes me feel more confident that this is the right way for me to go.

Thank you for sharing your knowledge!!!

Hello,

I am new to real estate investing.  I currently have 3 LTR and soon will be remodeling a small family-owned shopping center in Wimberley, Texas.  My question is how can I leverage my 3 rental properties to cash out money for the remodel?  Doing a conventional loan for each property is out of the question due to my debt-to-income ratio.  I have recently been learning more about DCSR loans.  All three properties have positive cash flow - not a lot, but I am not losing money.  

One lender I have spoken with stated that the DCSR loans are not regulated. In my situation I can only borrow 70% of LTV. He also stated a 3% origination cost. Is this for all DCSR loans or can these items vary?

I have also been told by multiple people that I should create an LLC or Trust. Maybe one LLC for all 3 properties or one LLC for each property? And then I think you can put an LLC into the Trust. I know with conventional loans the property cannot be in a trust or LLC when you go to refinance. That seems to be different with a DCSR loan?

Just reaching out for some feedback from people with more experience than I have in this area.  

Thank you in advance for your time and information!

Melissa

 Thank you Jerrod!  I am still learning about all the benefits of BiggerPockets.  This helps.  :)