All Forum Posts by: Mike McGee

Seems the only decent property management company in the area is Milltown Realty.

What kind of work? I've got good electrician, HVAC, plumber, roofer and landscaper recommendations.

If it's more general work, try Brian Bourke with Intuition Painting & Design. (Apparently I'm not allowed to post his contact info, but you can Google his company name or PM me.)

He's mostly a project manager, but he has good subs: carpenters, drywall guys, etc. His carpenter named John is excellent. (Wish I had John's direct contact, but I don't.)

Tell Brian I sent you!

@Robert VanZee, sounds like you and I are in similar situations. I'm also an ATP with mostly jet time, getting back into GA for the same reasons. I'm talking to my tax accountant, but there's also a very good write-up on the various tax implications here: https://www.aopa.org/go-fly/ai...

There are some reasons to put the plane into it's own LLC, but there are other reasons why a sole-purpose entity like that could cause problems. If your tax person isn't familiar with airplane ownership, you could call someone like this: https://www.aviation-cpa.com 

I see this thread is a few months old - have you progressed any further on this? I'd be curious to hear what you bought, how you structured the ownership, etc. 

Need an HVAC repair person in the Quad Cities area for a SF house in Davenport. Any recommendations?

Thanks. The “must own for 1 or 2 years prior to renting“ would be the major deal-killer for me. 

@Deb S. Do most condos down there have rent restrictions, or no? Here in Atlanta, most condos won’t let more than a certain percentage of owners rent out their units. Most here have a waiting list to be able to rent, and even if you can, you are typically prohibited from doing short-term / vacation rentals. Is that not an issue there?

Thanks!

@Ben Rishwain That's true in the case of a traditional office building, especially one that has only a handful of units. But for these small, "executive office suites", there's not typically any moving of walls or any build-out at all. In rare cases where a tenant needs that, they would bear the cost.

It still may be the case that that MF carries less risk than office buildings, but a building with a large number of small executive office units would logically be less risky than traditional office space.

Also, I initially presented an oversimplified scenario just to compare the different property types. But here are more details of the actual properties I'm considering:

The office opportunity is a single building with 15 units, each about 600 sq ft, fully rented. The MF opportunity is actually two 6-plexes, about half-rented. (Half of the units need paint, carpet, etc. to be rent-ready.) The purchase price and cap rate are nearly the same for the one office building and the two 6-plexes. (Well, it would be once the 6-plexes are fully rented.)

Also consider what you have to maintain for each property:

Office: 1 Roof
6-plexes: 2 Roofs

Office: 4 HVAC units
6-plexes: 12 furnaces + 12 AC window units

Office: 2 kitchenettes (Fridge, sink)
6-plexes: 12 full kitchens (Above, plus range/oven, vent/hood, dishwasher, etc.)

Office: 4 bathrooms
6-plexes: 12 bathrooms

A couple more confounding factors: The office building is built in 2005 and located in a suburb of a major metropolitan area currently experiencing substantial growth. Whereas the 6-plexes are built in 1969 and located in a mid-sized midwestern city with a stable market, but not much growth. I would think the office building might appreciate more, but of course, I won't count on it.

Considering all that, would you still favor MF?

@Jeff Kehl Yeah, I'm familiar with Wework and similar co-working concepts. Executive suites are a mid-point between traditional offices and co-working spaces. I have thought that, if the market demands it, I could offer some co-working options with this building. However, I think that would be more management intensive, and currently this executive suite concept seems to have a strong niche in this metro area. 

They're smaller "executive" offices, about 600sq ft, each. Basically entry-level offices for small businesses with room to grow. Some tenants are renting 2 or 3 units, most just single units. Many businesses just need to establish some physical office presence, without the need for much room. I would think this would be less risk than traditional office space.

Any reason(s), other than the one I mentioned?

So far, all of my investments are SFR. Now I have a couple of opportunities: one is a multi-family residential property, the other is a multi-unit executive office property.

For the sake of simplicity, let's say you have two properties. One is a 12-unit MF, the other is a 12-unit executive office building. Say they both have the same purchase price and cap rate. Private money lender will give the same terms on either property, so financing is not a player. Which would you choose? 

As opposed to most office buildings, having so many units spreads the vacancy risk out just as well as the MF building. One possible pro for the office building is that businesses may stay longer than residents. However, most of the tenants are only on 1-year leases, so I'm not sure I can count on that. One possible pro for the MF building is that, if/when the economy goes down, many of these small businesses could decide they can get along without office space, whereas people will always need a place to live.

Thoughts?