All Forum Posts by: Michael Jones

Hey everyone. I've been investing in real estate since 2018 and I've got experience developing my own land on a few deals.

Currently, I own 23 acres of which I plan to parcel out 3 acres or so to build a food hall. The idea being, that I can build 10 or so food stalls and simply charge rent to the tenants vs being concerned with running a restaurant. I'd also serve alcohol and use that to drive revenue. A major attraction point will be a safe area for kids to play inside and outside so that parents can relax and eat and their kids can run around.

Does anyone have experience with developing a food hall or any thoughts to consider? This area will be easy access to major roads and is in a part of town that does not have enough restaurants but has plenty of homes.

I'm in Georgetown. Your best bet is hiring a local Realtor to help you. The market is simply too hot for you to move quickly enough on your own.

if you've got the risk appetite, you might look at East Austin in the areas that are developing and buy a home you can fix and then stay in. That will allow you to keep some equity on the bone. Otherwise, you're enriching someone else and your equity upside may be quite limited. 

Reach out to Diego Corso. Tell him I sent you.

I'd recommend listening to as many of the BP episodes that deal with smaller apartments. You'll gain a lot of insight there and some real world war stories as to what has gone well and what hasn't.

At a very high level, you're going to want to focus on NOI (net operating income). With more units, your ability to maximize cash flow and returns is greater than a SFR. For example, if all units are not separately metered for water, that's a great opportunity to separately meter them and charge that back to the tenant (if that's not currently being done). You'll also want to pay attention to market rents. Are you under or over charging tenants, now to the tune of x7. Even a $10 increase each year on 7 units will compound over time,

I'm not too worried about this yet. The data is so muddled with banks that pre-emptively signed up their entire portfolio for forbearance assistance whether or not they needed it that's included in this data. Specifically for TX, we have not been hit nearly as hard and all of the agencies are taking a common sense approach to work this mess out.

One key difference to '08 is that this wasn't a borrowers fault (other than not having plenty of reserves). This was a government mandated shut down and the government and agencies are going to make policies to reflect that to try to protect homeowners.

Sam, I'll help you get your first deal. A bank wants 20 to 25% down for non-owner occupied. Most brokers just want the deal done, so if you can get it done, get it done. 

Hey Sam - I'm on the verge of selling my first deal for $2.85M that I bought raw land for at $385,000. Basically just the scenario you laid out above. Happy to connect on this. You can do it. You'll swing and miss, but it's likely that they're not ignoring you outright.

Poem Turner on Meetup.com was running it for awhile. It's probably taken a pause with Covid, but I think they were doing digital meetings as well.

I recently created one of these, but it was in the Austin area. Mine was brand new, so not sure about converting.

I used Mike Carroll in Austin, TX. Easy to work with. These are relatively new vehicles in Texas, so just be aware of that.

@Mike Watkinson

You can and should structure all deals with a "feasibility period". You'll pay a certain amount of money for this option, but it allows you to eject for any number of reasons. You can keep it general or get specific, but it's very flexible.

This will allow you to make closing contingent on getting approvals and the beauty is that the seller is carrying the cost of waiting.

I've done this twice successfully.

In TX, they only have to pay you 25% of the PURCHASE price at auction, so you stand to get cleaned out. Additionally, consider if a hard money lender approached this person after you obtained it. They could give the money to the original home owner and you'd be cooked.