All Forum Posts by: Michael Jones

Pass. I just had a deal come across my e-mail in Temple/Belton (TX) where the home was built in the late 80's or 90's around the same price and it will be a much better situation with similar economics.

If you're going to be a long-term buy and hold investor, shoot for newer properties. In this environment, make sure that you have the cash to handle property issues. The tenant is Section 8 which can be nice, but I'd focus more on the property.

Are you long-term buy and hold? Do you care more about the cash flow now and less about the future value? Are you willing to build or renovate something? 

I've been a bull even with this virus running around, but things may end up taking a bit of a turn. You've got plenty of time to study your market and then get in on something. Check and see if your planning and zoning department posts a Vision of the future and that will help clue you in to where the current and future opportunities are.

Always, always, always set up different banking accounts. If you co-mingle the funds, courts can collapse the entities and state that there is no limited liability with those companies. The same goes for any personal funds. Make sure you treats those as distributions to shareholders/members and don't run personal expenses through those bank accounts. Easiest way to lose your wealth by violating that true separation.

Banks are nearly as nervous as they were before, so some aren't kicking the tires as hard as others. Developing a relationship with a banker will go a long way.

Here's an example for Williamson County.

Over the next few days, this list will mostly be cleared because the bank or owner will pay the taxes. Each county will likely work with a different law firm. This law firm handles several.

Just Google the county you're looking at with "tax sales" or "tax foreclosure".

https://mvbalaw.com/tax-sales/

Alex, I understand your dilemma. In high school, I started a computer networking and repair company and was making $60 an hour making my own schedule and being the boss (of me). For a time, I considered not going to college because I too thought I didn't need it. Ultimately, I felt I needed to go to conform to what was then, 2006, a clear cut path in life that I must graduate high school, to go to college, to be successful in life. The world was a slightly different place back then. Facebook was barely started, there was no Uber, there was no AirBnB, etc. 

When the '08 crises hit, and banks stopped lending money, and the economy completely shut down, I felt fairly grateful to be in school and switching my major to accounting which guaranteed me, literally, a job out of college. I've since moved on from that, but I still have my CPA license which serves me well in many capacities.

The point of sharing all that is that we never know what is ahead in life. We don't know what the economy will be like, or what jobs will be available, or what industries will be revolutionized through technology. There are very few people I talk to who say they regret their time in college. College is a maturing process and you can make some truly wonderful relationships. You can also waste 4 years of your life and a lot of money if you don't take the opportunity seriously. Another thing to consider, it will never be easier to attend college than it is when you're younger. You tend not to have family responsibilities and as you get older, your desire to sit still and learn diminishes even further - particularly in a heavily structured setting like college.

All that being said, it sounds like you have a definite vision for your life. There are MANY successful people who didn't attend college or who dropped out. Typically because an amazing opportunity came their way. If you're seriously considering not going to college, you need to obtain an education in what you are interested in by finding a mentor and busting your butt. There are plenty of people out there who are looking for someone to hustle. I literally heard someone ask to find help finding a mentee yesterday in Austin for real estate purposes. You won't need to go to college to be a successful real estate developer or investor. However, you may find that you need the job that college can offer in order to obtain the capital needed (not necessary if you're a good salesman and can put other people's money to work).

I've never had someone ask me whether or not my college degree justified or allowed me to do business with them on the real estate side of things.

Raw commercial is my jam.

What state/city is this in? That will dictate some of the advice given.

If you can tie this up with no or little out of pocket to you, then you absolutely should take it down. At worst, you can assign the deal to someone down the line and profit from that.

Your plan for purchasing SFRs and getting the equity out is way too risky. You just need to put a plan in place that will use other people's money. You can easily find debt partners that want a certain level of return and will be flexible. I've done this.

What's the price of the property?

I'd highly recommend limiting your exposure to giving away equity both for the building and your business. Running a profitable business is one of the hardest things out there and letting someone have access to that can severely limit your upside potential.

With the likely volatility in the stock market, real estate and notes will be attractive options. I would try to structure a deal where you receive debt from these investors vs. equity. The cash flow needs that you have will likely dictate what you can and can't bear, but be careful about giving away ownership/equity.

Check out PaylessPower for a short-term arrangement. You'll need to call the city. It won't matter to them how long you need the water.

@Rich Hupper for $500 to $1,000 you can get an architect to do some basic mock ups. They're going to want to use a survey or a plat map so that they're working within the dimensions of the land. This is also important to show the city and potential suitors.

I know you're wanting to act as GC, but as you're gathering bids directly from contractors, get at least two bids from a GC. It will be quite enlightening and you'll learn about some work that you didn't know needed to be done. That "unknown work" will destroy your budget and possibly your investment returns if you're struggling to increase the loan amount or you have to source immediate cash.

@Rich Hupper - you absolutely should begin finding tenants now. It can take longer than you think and you may be able to work with them on tenant improvement while construction is being finalized on the shell building.

The easiest/best way to do this is to speak with your local economic development corporation who will have a list of companies they are actively speaking with or missed opportunities because they didn't have a building in place to house the business. This greatly increases your odds of having the building pre-leased, possibly before construction has started. That worked for me on my latest project.