All Forum Posts by: Franklin Spees

Welcome @Michael White !  You've come to the right place.  Let us know how we can help.  Surf the forums by issue.  There's a masters degree of real estate info out there at your fingertips.  Best of luck.

One thing you might consider to get started would be to co-venture with a licensed broker colleague who is a very successful sales agent or someone who has no interest in managing property.  Build your business under them as a salesperson license, gain two years experience, splitting profits generously, then break off when you obtain your brokers license.  The keys to this strategy would be to find the right broker & and begin with a great real estate attorney to draft and organize an agreement between you to define the relationship, duties, responsibilities, profit split, liability, and a predetermined exit strategy.  If you do it right, the broker should be in the background only and your transition should be seamless when you branch out independently.  Best of luck.

I agree with @Steve Rozenberg  in that it takes money to chase money.  Sure, everything is negotiable in real estate and the management agreement regarding late fees can be negotiated as a split or all to the owner, but really those late fee dollars are like infusing additional capacity to us as managers to allocate resources of time and staff to promptly respond with notices, calls, and site visits (documenting all along the way if it were to go south).  The fact that the tenant is late by even one day and gets a notice and a call tells them there is a consistent structure in place and my rent has to be a priority.  This is the only way to achieve the respect and on-time rental payments in the long run.  We require in our agreements that we retain the late fees, but we also disclose it and explain why, which owners end up really appreciating.

@Kevin Hobbs you may have either stumbled on a multimillion dollar opportunity, or a multi-year headache ending in bankruptcy.  Land development is a high stakes game because it has so many moving parts and contingencies (discretionary processes like planning commissions and city councils, environmental challenges or community opposition, financing, etc.), which is why there is so much potential to make huge margins if everything goes the way you want it.  The challenge is that not everything is within your control.

That being said, development has always been a passion of mine, having consulted for some of the largest retailers, residential developers, working as a local city planning manager, and as a real estate attorney.  So in no way do I mean to discourage you, but instead want to offer one approach you might take to hedge your risk a little.

It very well might be that the city wants to up-zone or add healthy density to a particular area given its proximity to transit, a city center, or other strategically planned growth area.  I would further research with a competent planner at the local jurisdiction and see how this neighborhood fits into the larger picture.  Who controls the land around it?  Are they moving on plans as well?  What is the timing?  Are there significant off site or infrastructure requirements mandated as a result of the change in use and density?  What is the highest and best use?

Once you know that information, I would approach the owner. Look for ways to control the land with using as little of your capital as possible. Are they open to a JV? Would they give you an option until you get the land entitled?

Best of luck.

Welcome @Jim Edmunds .  You are looking in the right spot.  A treasure chest of information is already in the forums...and if you come across something new, you have have an army of expertise who will crowdsource your answer right back to you.

I'm also in the Fresno/Clovis area.  What are your investment goals for 2015?

I took a slightly different approach which you might be interested in given you already own and manage some doors.  My career in property management began with a 16 unit building my grandparents purchased and my wife and I managed during grad school.  We learned the ropes, joined the local apartment association, and took a few hard knocks to the chin.  Took a couple years to smack the naivety out of us when dealing with dishonest tenants.  But that building grew to several more.  Fast forward, got brokers license moved and started a new management company from scratch leveraging what we already knew, read, got certifications, hired employees, now we're pushing 500 doors under management.  It wasn't always full time, in fact I had another full time job while building the critical mass.  Getting a job might be a great way to learn under another person's experienced wing but just be careful not to stay too long.  Remember the flexibility and control that you were talking about.  It's only truly achievable when you own the company.  Best of luck.

Rent is currently $595, but of course the metric in using to calculate a return is using a simple COC and I had as little of my own cash in the deal as possible.

 $595 is the current rent for the 1 bedroom.  The real attempt here was to calculate the return based only on the money put into the deal, which of course was very little.

I knew this was going to be your thread Al, even before I clicked it.  Sounded a little too "catalytic" and creative for the average investor.  Love it.

I will say in Fresno, Clovis and many other CA cities, as @Brian Burke pointed out, water regulations have really tightened up.  In fact code enforcement can come around and issue fines for sprinklers on the wrong day or wrong hour.  A hose left on and running would probably be like a magnet.  Other issues to consider might be noise, nuisance to adjacent owners, and providing a commercial service within a residentially zoned neighborhood.  Not trying to knock it, but rather hopefully find ways to mitigate all the issues and make it a success.  

As sort of an experiment, purchased a $20k condo in Fresno knowing conventional financing was not available. Talked a buddy into self directing his Roth IRA to lend me $18k with a 10% interest loan which helped me achieve a decent COC return even after the HOA fees. Property has all but paid itself off with tenant rents.