All Forum Posts by: Herndon Davis

There are 4 basic ways to screen commercial tenants. I personally call it SFRC

Strategic – Ask basic question concerning their mission, vision. Where they seek to be in 5, 10 years. Current profile of customers/clients, how they market/advertise, and the busiest time of day and seasons for businesses. Are they seasonal and earn 50% or more of their revenue during those times? What are their peak times of doing business during a normal work day? What are their current and projected business hours

Financial – Request P&Ls, Cash Flow statements from the past 2 years. If they can’t won’t provide, then that’s a red flag.

Reputational – Search online reviews like Yelp and others. Review their blog, website, social media. How do they present themselves to clients, customers and to the world. Also check BBB and check the county course records for previous and current lawsuits, judgments, etc.

Client/Customer Experience – Send in secret shoppers at different times to observer their services, professionalism, etc  at their current location. Also do drivebys of their current business to get a vibe of client, where the neighborhood their currently in.

I hope this helps.  I"ll be reposing this in other forums as well.  Feel free to PM if you have questions.  Houston based here!

Yes, Katy, Cinco Ranch, Spring Branch

Austin is growing quickly.  It's the high tech mecca for Texas. It is NOT new undiscovered territory.  But there's still room for growth given the expansion of major Tech companies there.  You won't be adhead of the curve on that one but you can still find deals there but hurry up!

 I've written about this.  Search my Blog or Profile for the article.  You build carefully an out-of-state Team.  The location you select is KEY

As everyone before me has stated, all of those steps will happen in the discovery phase once you put the property under contract. Just make sure your realtor writes into your contract that your offer is pending/contingent upon your due diligence after which you have the option to either can pull out the deal or renegotiate based upon your findings and your EMD (earnest money deposit) refunded by the Title company. This is NOT an As-Is sale!!! Be very clear on that upfront.

Also something I've started advising folks is to do a preliminary Title research on your own OR go ahead and order a full title report BEFORE you even put in an offer.  This can provide insight that can be helpful in how to structure your offer not to mention to catch potential red flags BEFORE you put in an offer, do the due diligence but only to be stopped by Title issues.  Either way you're going to spend the money, either up front or on the back-end.

Yes they're called Non-QM (Non-Qualified Mortgages) and I've written extensively about them as well as their advantages and disadvantages. You can search my profile or Blog and find the there. It's a GREAT alternative to Conventional Lending but they are indeed more expensive loans. 

Sounds like its time to change Property Management companies.  

1-YES always request a BEFORE and AFTER photo or not authorization of payment.
2-Don't let them charge you extra for taking a freakin photo on a cell phone that costs nothing to do.
3-Book a flight down there and make a surprise visit.  Get it straightened out and have them show you the property and where the problems lie.
4-While you're in town shop around for a new PM
5-Revisit your current PM, give them notice and tell them you expect a smooth transition and that you plan to revisit to ensure that it does.

I absolutely HATE this is happening to you but here's what you do!

1-Book a flight to Memphis
2-Rent a car and drive to their office and make a surprise visit and sit there until you get answers and troubles corrected
3-Stay in Memphis a few days, interview and select another property management company
4-Go back to the previous rental office and give them notice. 

Tell them you expect a smooth transition with the new company and you will be flying down to make sure it happens.

I'm interested in diving in to Broward County and Ft. Lauderdale area for real estate investing mostly buy-and-hold but not opposed to flips if some come my way.  Any areas of town you would suggest?  Are all the good deals gone?  Any areas of denitrification that are up and coming to look out for?

If the property can compete at market value rent with the properties that surround in its "As-Is" state,  then yes, slap on a coat paint, replace the carpet, shine the hardwoods, buff up the walls and replace the wall sockets and the door knobs.  HOWEVER, if the property can't compete, then do NOT attempt to rent it out.  Take the time and renovate one side, live in the other.  Then move out as you renovate the other side.