All Forum Posts by: Michael Jones

I'm literally building a 10,000 sq ft facility now. It's 70% rented to a single medical tenant for 7 years. Base rent is $22/ft for the first year and escalates $.50 per year every year after. Passing through triple net on top of the $22. Make sure that your lease is triple net and pushes repairs to the tenant.

Be advised, they can require some extensive tenant improvements depending on what type of tenant you attract. You can negotiate all that in the rent.

Execute a letter of intent. You can make this as broad as both parties are willing to accept. You may be moving forward based on their indication of intent to occupy the space.

Jason - this is a bit of a specialty for me right now and I'm actually completing development of a 10,000 sq ft facility that I acquired in Jan 2018.

It was listed on the MLS as a 1 acre parcel with a manufactured home. I knew the highest and best use of this property on a commercial corridor was going to be office of some sort. I acquired the land and began speaking with various economic entities in the area. They confirmed that they needed more space, so I felt comfortable moving forward.

I got connected with a Realtor that specializes in medical commercial space. Within a month or two of working with this broker, I had a 7 year tenant leasing 70% of my space before we turned dirt.

I'm actually in the process of writing a book to capture the basics of getting started in TRUE commercial space and would love your feedback in the future. I think commercial is one of the best asset classes because of the long-term nature of leases, less wear and tear on the buildings, and the ability to pass along costs via NNN leases. By the time my first lease expires, and they have an option to renew, the building will already be half paid for because I'm choosing 15 year amortization.

The best thing that you can do is find what are known as "Economic Development Corporations" in your area. They may not be called that specifically, but they are a semi-government organization that works closely with city council to make sure that they are encouraging and helping economic growth in the area. They are aware of businesses and other opportunities that want to come to the city and they can help connect you with the companies that need space. This is how I was able to move forward without speculating very much. You should also get familiar with the planning and zoning maps that your city offers so that you can see where they are projecting the growth to go and how you can plan to be in the growth path.

Do NOT buy something from a national home builder. I've observed how these homes are built and even been involved in the construction of a few similar homes. They cut corners in the sake of time and profit. I would recommend a gently used home if at all possible because your future maintenance could be substantial depending on what they cut corners on, sub par materials used, etc.

I definitely try the path of progress approach. You need to couple that with something that will at least cash flow the property, otherwise you're making a major gamble and paying for it, but getting the progress right leads to MASSIVE gains with enough time.

Hey group,

I was looking to develop a 2.5 acre commercial parcel that I own on a fantastic artery in town, but as I've gone through the process of architect renderings and meeting with the city, I think the property is too small for highest and best use. There's a glut of office and medical coming within a 1 mile radius of my property and it makes sense to go another direction.

Based on the demographics and needs of the area, restaurants are sorely needed, but we also have ZERO facilities for kids and their families in town. In a suburb just outside of Austin, this means most families are travelling around 30 minutes for entertainment.

I'm considering selling the tract of land that I own to use those proceeds to pick up a larger parcel not too far away. 

The big question is: what research/materials would you recommend reviewing when looking to either build and lease out a kid friendly building OR taking the jump into actually operating or co-owning a kid oriented business. With the parcel I'm considering, I could fit a trampoline park/gym, a family oriented arcade restaurant, and/or a science driven interactive facility. 

Hey Cory - would love to connect. I'm actively searching for and developing commercial property in North Austin/Georgetown. Let's stay in touch. Would love to mastermind a bit. Tons of opportunity.

For commercial or residential?

Good morning Atta. Unfortunately, a request like that is way too broad and almost no one will give you an answer that is very helpful. I'd say generally, you're looking to put 20% to 25% down as an investor, but you might be able to put as little as 10% down if you're going to owner occupy. Each bank is going to have a risk appetite and will be willing to lend based on the facts and circumstances of your individual scenario.

This is a situation where you're going to have to do some leg work and speak with commercial real estate brokers as to who they would recommend working with and then call local banks. Sometimes local is best.

Hi Patrick - we're a correspondent lender in TX. We started as a broker and then became an independent mortgage bank. Happy to walk you through the details of that, but it likely would only make sense if you had sufficient deal flow. Otherwise, remaining a broker is likely your best option with all the volatility, margin compression, and competition right now.