All Forum Posts by: Katie Neason

In my previous life I was the Real Estate Development Officer for a Boutique Assisted Living Start Up company for residents with ALZ in Texas. The laws and licensing is state specific. It was a really hot market for a while as investor money flooded into the market.  We sold in 2015 which we felt like was the peak of the market. Since then lots of homes have continued to open, small and large, saturating the market. Occupancy has been a struggle with so much new inventory coming on the market and rates have come down. Our structure was we had a private investor who financed the real estate (effectively a built to suit) and then did a long term lease to us as the operator. We sold it (both the real estate and operating company) to an out of state non-profit that runs various senior livings. The new owner put a management company in place that runs it. You might reach out to the management companies and see if any of their investors are looking to expand. The asset is the real estate, so not sure if they will want to expand into a lease space, but maybe. The management companies will be easy to find by going to all of the websites of existing entities. You should be able to tell pretty quick which ones are owner run and which are management run. I would also call the regulatory agency (in Texas it is Department of Aging and Disability Services or DADS) and talk with them to find out as much as you can about players in town, who is expanding, etc. There are also DADS consultants that go into facilities and help them either build to code or bring the facility up to code. They would be a great source of who the market players are. If you are interested I can put you in touch with the consultant we used. Not sure if he does work in your state but it is a small world, I am sure he could put you in touch with someone. Message me if you are interested. Good Luck!

The difficulty of this totally depends on where you are located. Your city should have a master plan. If it does look and see what they ultimately would like to see there. IF your city has good leadership and is pro development, it is as simple as setting up a meeting through the city planning office. They will look at the site with you and look at availability of water, sewer and power and talk through what they would like to see versus what you would like to develop. We have meetings like this all the time on properties we are considering developing. 

I have done this. The timeline was just longer to maximize the refinance value. I purchased a vacant commercial building (about 6,400 sf) on Main St. (March 2016) and got an 18 mo construction loan that rolled into term financing from a local bank with a portfolio loan.  Did an extensive remodel that took about 10 months. Put 5 tenants in the space. The first 2 tenants moved in Jan 2017. The last tenant moved in March 2018, if I remember right. We seasoned it for a year and then refinanced it in Nov 2019 with a credit union, increased our reserves to $50,000 (About 8 mos of expenses and P&I) and got all of our initial investment out. It cash flows about $12,000/quarter. With that said two, 2 tenants are retail, and I am very concerned with their longevity and thankful for the reserves. 

We are currently in the middle of a second one. We bought a distressed office building with lots of deferred maintenance in a good location (near the hospital and a large junior college). It had 2 tenant and 2 vacant spaces. We are currently renovating the property ($250M rehab budget). We will have the vacant spots ready for lease in the next 30 days or so. Hope to get it leased pretty quick and refinance it. We used expensive money to buy and refi (we had to get the money together very quickly because the owner was facing foreclosure in short order) so we will start the refi process as soon as we get leases  in place. Should be enough value to get all of our money out plus some. Too soon to know how it will turn out. I post about it pretty regular on our fb page if you want to check it out. facebook.com/renovationwranglers. 

Find an experienced flipper where you live and partner with him. You will learn a ton and no classroom time  will get you the experience of one deal. 

Good luck and wishing you much future success. 

I am the GC. We pull permits in our company name. 

It is definitely a process that evolves. We act as our own GC on most of our deals and are able to pull our own permits. 

I would not worry about building his balance sheet, but rather put that effort into building your own balance sheet.  🙂 It can be difficult to add value as a non-real estate investor to someone already doing it. It would be a kin to you telling a football coach how to improve his coaching, even though you have never coached a football team. Even if you are right, it probably won’t be well received. 

Setting aside what is the “right” thing to do. If the intent is to flip I would pull permits. The home buyer is going to get an inspection report and all kinds of frivolous stuff will come up on it. Permitted renovations approved by the city are a good counter argument. As far as how often the buyer/realtor brings up permitted work, I would say less than half, but enough that you want to be able to say you follow city requirements. We typically do extensive renovations and enough of them that the city folks know us well, so “flying under the radar” is no longer an option. If you want to build a reputable business and earn grace from the city when you need it, I have found you will come out way ahead following the rules. 

We just built a small mixed use building in Downtown Bryan with 20 residential lofts and up to 6 retail spaces, we also have two other commercial multi tenant buildings with 9 spaces. I house hack our primary residence and we have a couple of other residential rentals we will like develop out in the future. We primarily flip houses and do infill development to earn income with the intent of turning it into cash flow assets we want to hold. The BCS market has been good to us but we are pretty nervous right now. Doesn’t help that we are bringing 20 doors online in a pandemic of a college town. Best wishes as you start. I think house hack is a smart way to do it. 

What are you getting it zoned to? A standard zoning or a planned development? If it is a standard zoning I am not sure why you would need “blue prints”. If it is a planned development, they typically want a fully set of plans, at least civil, site and landscaping plans. All of this is based on re-zoning in my market. I suspect it can vary wildly depending on jurisdiction. Can you set up an appointment with the city and discuss with them what is needed?