All Forum Posts by: Michael Judkins

My wife operates a profitable salon located in a small 10,000 sq ft strip mall and is currently paying rent of $5k per month for 2,000 sq ft space within this mall. We have saved up approximately $250k of cash and have been mulling over investment options. One idea we like is potentially buying or even building a commercial retail space for her business so we are paying ourselves to rent the space instead of throwing money away on rent. Also the appreciation of the property and if we purchased or built a larger multi tenant property, there is the potential cash flow aspect.

My question is, would it be better to look into purchasing a unit within an already developed commercial property just for her business, or would it make sense to purchase a lot and build something from scratch? Obviously, buying a unit in a ready built space would be easier and cheaper, but the issue here is we haven't been able to find a good location and the existing spaces (been looking on Loopnet) are all not quite right (too old, bad location, wrong layout, etc). Purchasing land and building the space would give us much more flexibility, but Im not even sure how much cash we would need for this. Is this even an option we could consider with a down payment of 250k?

I did find a really good lot off a busy street in a growing area on 1 acre for $600k but then how much would it cost to build? Is $250k enough to buy some land and build a small property using a commercial loan? Is buying land and building from scratch too ambitious as a first foray into real estate investing?

Im getting into buy and hold with the primary goal of cashflow and long term appreciation. Does there exist an online tool which shows you a feed of properties in a given area ranked by potential cashflow? I know I can do this by hunting and pecking on Zillow and looking at the mortage payment estimate vs the Rental "Zestimate", but it's time consuming and doesn't surface opportunities at a high level. Ideally Im looking for a tool which would automatically send new investment opportunities that have positive cash flows, good forecasted appreciation rates, etc and based on my parameters. 

Pflugerville is a booming suburb that is poised to have tremendous growth in the next 10-20 years. That said, its not really a typical or desirable area for AirBnBs since it is far away relatively from Austin where most vacationers want to be. Not to say you wont get any bookings, but its just not really that sort of place. You need to drive everywhere to get places, its not close to any of the large events that attract tourist like SXSW or ACL or COTA, is full of chain restaurants and strip mall type stores (lacks the character of downtown). It's more suited to families seeking long term rentals IMO, and you are up in "the burbs".

Hi Ivan, thanks for the advice, Im leaning towards putting the funds back into mutual funds until I can have a bigger down payment. Was not taxed on the 401k because it was invested into my C-corp (look up ROBS funding).

The $70k in cash is tied up in a C-corp that I am the sole owner of and they are from my own 401k (funded via ROBS financing). The original business idea (an internet business) failed, and now Im left with $70k from liquidating the assets. My choices are to either roll it all back into my 401k and wind up the c-corp, or invest the funds into real estate (short or long term rentals or maybe crowdfunding some other type of asset class), roll the dice with another online venture (which is my wheelhouse but after losing a bunch of money this last time Im hesitant), or something else like stocks or bonds. Im currently 43 years old. If you were in my position, what would you do and why?