All Forum Posts by: Tom McGiveron

well aside from being somewhat confused, i have a few questions.

1. where will you live if you move out and rent this place out?

there's a big difference between YOU having equity to buy another property and your business. if the business has some financials and good credit worthiness, then acquiring funds for another property may be doable.

2. what type of funding does your company have?

it is the company that is buying the property, not you

3. are you personally guaranteeing the loan on the property? - if not, then it won't effect your ability to buy more than one property. it will be the first property for YOU.

so craig,

i was wondering - what is the most effective way to draw a developer into buying a piece of property you own? what types of terms or lingo may be considered "buzz worthy"?

thanks.

nicole,

sounds like your motivated and i'm not posting this to rain on your parade, but a few questions:

1. what makes you think this is a good deal?

2. how do you know it is below market value?

3. what is market value for this type of home - # of br/ba/rooms, size of structure/lot, age of property, neighborhood home prices, etc?

4. if it's below market value - how much is it below market - over 25%?

you have to answer these questions, and be solid with these numbers.

that's where your realtor can help - and like chaser said - get a good competent realtor. you need good...again i emphasis GOOD CMA -or Comparative Market Analysis.

it sounds as if you're just starting out - you've got a LONG road ahead of you. if you don't know how to do anything, go to your library and start reading. get out a book or two and just read. you can email me as well.

one other question - and this is probably the most important:

what is your purpose for buying this or any other property? do you plan on living in it? renting it? rehabing and selling it?

start there and let us know.

wow, rob, you've got alot going on.

it's tough for me to judge anything, because i do not know you at all. i mean, if you can line up a car dealer, who's willing to lease it from you, you obviously can talk a good talk. that's good. i'm curious, if they're leasing it, what kind of agreement will you draw up with them. i mean, commercial leasing usually runs a few years? if they put cars there, they're not just going to want to pick up and move after 1 year, right?

also, i see how you have connections, and that's good. but for me, if it ain't in writing, it don't mean squadueche. know what i mean?

anyone can tell you something in conversation, but it's different when you show up and say, "okay, here we go."

just my opinion. my take from reading your posts is that you have experience in some form of business. attorney? CPA? just curious?

someone correct me if i'm wrong, but if you're really late on your taxes, you have to bring them currect before you sell or have in the contract that X dollars will be going toward paying delinquent taxes. this will of course complicate the sale as well.

also, i agree, you've got a property, why sell it? bring the taxes current, using all your resources - get it done. then do some rehabbing, live in it for a while or rent it out, either way, refinance and use the money to purchase another property. now you've got two. rehab the second, rent it out, refinance and do it again. along the way, manage your money correctly, don't spread yourself too thin (being a landlord is no picnic) on each property - leave some for op funds for each house.

there's alot that comes along with this, but it's a general idea of what to do.

visit this site:
http://www.keybi.com/

you've got a lot of questions. i've only scratched the surface about commercial. but i mean, your lender will require an appraisal - they'll set it up and get the appraisal they want. of course, you'll need one prior to this, i think, in order to have an idea if your comps are correct - see if you can get a preliminary estimate from an appraiser - you said you have contacts, use those.

as for putting a financial package together for investors, yes, you'll need one. that's quite a bit of money so i dont want to give you rinky-dink advise - the man who runs the site above is very informative. i would say, have fun with what ever it is you do. if it's not fun, then it's stress. who needs that?

lastly, your roi for investors is an interesting point. i mean, who knows what they expect. the roi you can provide from this investment, or any investment, is the roi you'll market to investors, period. if they like the roi, and all the details of management and the like, they'll invest. generally speaking, my gut tells me, that if a prospect does not offer somewhere near 12 - 14% or more roi, then you'd generally pass - just getting started, you really don't want to cut your margin for error too much. commercial relies heavily on cap rate, which is to say, the "cap rate" is what you'll hear most commercial investors talk about, alot.

good luck and post on that site above. Ron tells it like it is. he's good.

minna, what is the rush? you've got a rental currently and you own a home you live in. there are really too many areas to ask questions, but important ones are:

1 what is your equity position on your home?
2 what is your equity postion on your condo?
3 who owns these properties (you or company that you are a member/partner in)?
4 what do your loan amounts equal to, and how will you manage to pay them off at an accelerated rate, to cut down on interest paid to lender as well as increase your equity positions?
5 again, why the rush?

it seems you have a good job and you'll be coming into 10k in january??? add that to your current savings - 7k and the 2k per month from now until January - and that's 25k.

my two cents - watch out over extending yourself in debt. if you're going to go down that route, you need to buy right [well below market]. that takes an investment strategy which includes marketing, driving neighborhoods and finding "customers" or motivated sellers. buying right is essential to any rei strategy. take your time - it'll happen because you'll make it happen, heck, you've already begun!

best of luck..

i took the tapes out of the library again and gave them to my bro to listen to.

he is now my partner, working on his contractors license and thinking of buying his bosses business - with over 80 clients.

again, the book doesn't lay out specifics, but it gets you thinking. not everyone gets it, but those who really read it and start DOING, soon realize how poor they really were prior to focusing on their financial situation.

rd, pd, just helps get you going. the rest is up to you!

:superman:

i'll keep this short :lol:

what makes you believe these two markets are good?

how will those targets drive your strategy?

how much starting cash do you think you'll need?

what is this based on?

from my own experience, i have done so much preparation to the point where i know, pretty much, down to the nearest couple 100 bucks either way, how much i need to begin my business strategy. and, i know it's probably completely wrong... :lol: but it's something i can look at, refer to and know where i'm at, especially when i look at properties.

develop hard questions for yourself to answer, then get the answers - you'll build a solid investment plan this way.

i agree with juzamjedi, that rehabbing residential sfh is "standard", but without an idea of your own personal financial and workmanship capabilities, you're just diving into a dark pool head first. i'd like to know, or have an idea of the BOTTOM LINE.

for what it's worth...

it depends on what type of business plan you're talking about. if you're talking about a full-blown b plan with an executive summary and all the catagories offered from professional software, then i'd say that would be very difficult.

it depends on your level of knowledge about rei. are you just starting out?

i'll just guess and say that you are.

k, this means the best way to just get through it all is to have some long range goals and some short range goals in place, even before you start thinking about a "business plan".

you can't write one, if you don't understand the business. rei is not a traditional business. it's investing and relies alot on speculation. if you're doing rentals, it's easy to say, okay, my customers are my tenants and my homes are my inventory. okay, you've got 5 homes (inventory) and 5 tenants (customers).

now sell your "business"...you can't sell it, because there is no business, per se. there are two types of business, a lifestyle business - being self-employed and a business with saleability - one that has a system of operations, trademarks, management or potential for it, and basically a system of controls, customers and market share that make it worth something to an outsider who wants in.

rei doesn't really offer these opportunities, at least NOT TO THE NEW INVESTOR. the noob, really needs to learn about rei and then get that first investment property.

now, getting back to the long range goals and short range goals. once you know where you're going and understand, for real, the costs, benefits and risks of rei, be it in your local market or across the country, in my opinion - a one to two page business plan will suffice. it must lay out a simple plan, give you a sense of financial direction and be flexible enough to change when you run into problems down the road.

for instance, the terms "seasoning" doesn't often register loudly in the rei field, but it is something that you will face down the road. your business plan should take this into account so that you are prepared for it.

sorry for the long ramble - bottom line - just writing a business plan out of thin air ain't all that easy and something like:
buy
fix
refi
rent

won't cut the mustard. at least not in my experience. i mean, it's not a whole lot more than that when you break it down, that's why i said 1 to 2 pages. and heck, alot of investors may tell you you don't need one at all, just go out and start buying! your business plan will rely heavily on your strategy for buying property. this is a definite. KISS method a must.

good luck.