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All Forum Posts by: Mike Russ

Mike Russ has started 7 posts and replied 24 times.

Hi Everyone - I have two vacancies coming up in a 4-unit building and I am contemplating testing the market to sell my building if we get a good offer.  We were planning to be buy and hold long-term investors but the short-term return (2 years) on a potential sale based on recent comps may cause us to pivot with our long-term strategy.  

I am seeking on advice on the best approach to market our property for sale without officially listing it.  I was planning to contact 2-3 local realtors and offer showings of the vacant units to investors they may have relations with and seeing where offers come in.  We may decide to hold if we don't get the price target we are seeking.  How should I negotiate commissions with realtors with this approach?  Also, is there a better approach to essentially test the market without a full blown listing.  

Thanks,

Mike

@Greg Dickerson - This is incredibly helpful.  All of this feedback has made realize I need to prioritize putting the developer at the front of my process and then work on structuring my approach around their needs.  I am going to pump the brakes on the possible land acquisition temporarily and start talking with developers.  

I like the two different options you outline on structuring the deal.  I would be open to either approach and need to do some research to work the numbers backwards with the profit targets you mention.  Would you recommend any specific references to determine the pricing inputs that go into the development side?  Is there a good reference to get a solid construction $sq/ft for developers and standard costs for utility extensions?  I have good comps for what new construction goes for in the area but I really don't know what the actual construction costs are.  The end goal would be to work my numbers backwards as you indicate.  

Thanks,

Mike

Thank you @Steve Morris for the reply and advice.  I will definitely make sure to have a condition in the contract that it is contingent upon the zoning change if I agree to purchase the property with the assumption the zoning change will be made.  

@Sue Hough - Thank you very much for the reply and guidance.  The developer relationship is definitely something that you highlight and I know we need to address before getting too far into this, I can get around it for the land purchase with enough of my own capital but in order to ensure I have a viable project it is a concern.  I have mutual connections locally here with a couple developers that I will reach out to.

I have big question marks on what developers would actually pay for the land as I divide it up into parcels and resell.  This has made my financial model difficult and uncertain.  Do you have any guidance on modeling property values converted from AG to multi-family residential?

On the zoning/permitting front, I have pretty extensive experience through my engineering background and connections to environmental firms that I feel good about the property itself but will need to rely on the developer for execution here.  Is it typical for the developer or land owner to lead the permitting process or is there a hand off after zoning is complete?

Thanks,

Mike

Hi - I am looking for some guidance or references on how to proceed with an opportunity that is potentially available to me in Dayton, OH.  There is a large parcel of land in a desirable neighborhood that is potentially being rezoned from agriculture to multi-family.  It has some hurdles in the zoning process with getting water/sewer extended but I think in the long-term it is feasible with the discussions I have had with local officials.  The property owner is ready to walk away and sell the property.  I have interest in buying because I believe if I develop a good strategy to work with a developer here once I complete rezoning, there is a lot of potential in the location.  I am curious to hear/learn more about what type of business approach is common or suggested when landowners work with developers and what I need to watch out for.  I have experience in buying/holding existing rentals in this area but I have not done development at this stage.

Initially, I was thinking about a model where we would potentially divide the property and construction in 3 phases once I complete rezoning and I sell to the developer 1/3 of the parcels at a time.  I make the profit on the land sale only for my efforts rezoning and let the developer handle everything else including road/sewer extension as they develop the site.  

Any other thoughts, suggestions, or references on what I should read/listen to would be very much appreciated.

Thanks,

Mike

Th

Thanks to everyone on this thread for your help! I tweaked a few items based on the feedback and posted an updated version of the letter below.  I am planning to send this out over the weekend.

Dear Owner XYZ,

My name is Michael Russ and I am looking to purchase homes in the Dayton area.

If you are looking to sell your property now or in the near future, please text, call, or email me using the information provided below.

I have experience in local real estate deals and can act quickly handling the entire process from start to finish. I strive to find mutually beneficial deals that benefit all parties involved and would appreciate the opportunity to talk with you soon.

Thank you,

Michael Russ

Contact Info

@Bruce Lynn Thank you for the response!  I have calls built into my process after direct mail but one thing that I struggle with is finding good phone numbers, do you have any recommendations on an affordable and accurate way to find good phone numbers?

@McKinley Crowley - Thank you for the advice, I like your recommendation to make this more firm by removing any sense of doubt.

HI - I am working on sending my first round of direct mail to tax delinquent property owners.  My objective is to purchase these properties for resale or potentially work out lease to own agreements with the existing owners that may be in a bad spot for whatever reason.  I would appreciate any critiques to the draft letter below.  I am not sure if I should directly mention that I found the property through a county records search or if I should keep it more generic, any advice from an experienced person in this area would be great!

Dear Owner XYZ,

My name is Michael Russ and I am looking to purchase homes in the Dayton area.

I am not sure if you are interested in selling your property at this time but if you are inclined to sell or think you may sell in the near future, please call, email, or text me using the information provided below.

I am a local real estate investor and can act quickly handling the entire process from start to finish. I strive to find a mutually beneficial deal that will work for all parties involved and would appreciate the opportunity to work with you.

Thank you,

Michael Russ

Contact Info

@Bryan Peralta Do your homework and have a plan in place stating what your goals are. Once you have your goals, figure out what your niche will be and network to find people that might be willing to give you an opportunity. There are people out there with cash but don’t want to deal with the hassle of operations. Someone like this may give you a small equity stake in a property in exchange for handling all of the operational duties. If you have a niche and are able to find good deals, the money will come.