All Forum Posts by: Oscar Toledo

it was difficult. I spoke with a couple of property owners who were willing to disclose that information. I also hired a consultant who worked for Clear Channel advertising at one time. The attorney who reviewed my contract was also able to confirm the typical lease rates.

Oh, one thing I forgot to mention is be sure to include how and when the lease rates will increase. We based ours off the annual CPI which is a gauge for inflation. 

I would say only if you plan to use the property for another purpose or if the property is really cheap and fits within the building guidelines. However, in austin, you are at the mercy of the permitting process, so there's no way to guaranty that your sign company will be able to procure a permit for the billboard.

Also, austin is NOT allowing any new billboards inside city limits. Same for cedar park, round rock, and other suburbs. A sign company will have to tear down an existing sign to put a new one up. Also, any new signs can be no larger than the one they tore down. This always applies UNLESS the city tears one down to expand a highway (ie, 290). And in that case, they have more flexibility. A sign company gets one credit for a sign that is torn down and have up to 3 years or so to erect another or they lose that credit. 

Lastly, no sign can be within I think 1000 feet of another sign or I think 500 feet of a residence. I think they can build within 500 feet of another sign if they use the credit described above. They are trying to change these rules now, proposition is up for a vote in May.

Note that some signs in austin violate some of these laws. In those cases, they were built and grandfathered in before the laws were in place.

Hope this helps!

Yes of course. I am traveling right now otherwise I would take a look at my contract. For now I'll try to go off memory.

1. Ensure you specify exactly where they will be allowed to erect the sign. One property owner said he didn't do that, which gave them free reign to move the sign anywhere on the property. He couldn't sell the property because no bank would give a loan on it with that in the contract.

2. You may want to mention that you will not permit any adult content or advertisements for a competitor (we will be operating our business next door). You can also ask for 2 months of free advertising, if you pay for the skins.

3. Ensure they have an insurance policy and put you on it as an additional insured.

4. Most companies want  a twenty year lease. We are going for ten with one option to extend for ten years. Gives us more flexibility.

5. Mention operating hours and specific easements or service procedures so there aren't guys putting up signs during you or you tenant's business hours. 

6. It seems as though the going lease rate is 15%-20% of the monthly revenue that the sign generates. Some property owners were able to add a portion of the sign company's revenue (say, 10%) as a bonus, but sign companies are getting away from that model because there are just too many billboards any too much number crunching. They would rather just give an extra 2% per month.

7. Ask for an artist's rendering of the sign so you can see how it will look on your property and ensure it does not interfere with your signage.

8. Most importantly!!! Have an attorney review you contract and make changes. The contract they sent us was one page long, and our attorney added 3 more pages.

8. I'm sure I forgot a few things,so I'll update when I get home.

Good luck!

Yes, I spoke with other landowners about their leases and they gave me great insight and advice. I also spoke to an attorney who specializes in billboard lease contracts. I think we negotiated a pretty good deal!

1800 to 1900 lipan trail. 5 lots in eanes. 90k each, maybe a deal for all 5? New gated part of Cuernavaca. That area is only getting better.

Hi Dustin,

Congrats on your house build, sounds exciting. I am in the process of building a commercial building for my business. No surprise, but Austin is a very difficult place to build these days. I figure once we crack the nut on building in Austin, we may have our niche. Keep us posted on how it progresses.

If you are looking at investing in 3/2s and larger, if I were you, I would focus on school districts. There are so many families moving here and they all gravitate towards the better schools. The best deals, in my opinion, are in the less expensive Eanes properties(Cuernavaca area-very green centric), and the southern Round Rock schools in NW Austin. Visit greatschool.org or check out this map:

http://www.zillow.com/austin-tx/schools/

Again, just my opinion, good luck and keep us posted.

Regards,

Oscar

We own some commercial property on a very busy highway. 250,000 cars pass by everyday. We recevied a proposal from a billboard company to build a full sized billboard. the research has been conducted and a written lease has been written and presented to us for 1k/mo, 20 years + 20 yr option, with 10% rate increases every 5 yrs. We are very interested, but what is a fair rate? I think that billboards here run $5000-10000 (maybe more?) a month here because it's so busy, but I'm not really sure.

From what I'm told and from what I've researched, you can expect to recevie about 15% to 20% of the gross monthly revenue that the billboard company gets. I am also going to required annual increases in rent based on the CPI index, among a few other things.

Does anyone have experience with this? I don't want to have any regrets.

Thanks in advance for your responses! 

Mark,

I'm looking for a commercial loan for a small commercial investment property. I have 4 commercial properties but am looking for more.

Because we did a 1031 exchange, we had to purchase the new property using the same owners and ownership as the sold property. We had the option to do 100% owned LLCs to buy the new property, but we are using an SBA loan to build on the new property and the 7a SBA loans don't allow multiple LLCs but they will allow multiple owners if in their own name....see told you it was complicated. we spent a month trying to find a loophole. 

Thanks!!

Oscar

Yes, we are very lucky. Things worked out well. Of course, we did put some time and $$ into the renovations, but would still come out ahead if we sold. We have about 15 k of work left to go on our house, which we should complete by winter. 

I'm not sure if I'm too keen on the condo setup, the houses would be a bit close together. I think it's an all or nothing deal for my wife and I. Peter makes a good point, ask for the moon, and if we don't get it, ah well, so be it. We'll consider that.

Anyway, thanks for all the superb advice, you guys are too kind.

Regards,

Oscar

Wow!! Thanks for chiming in everyone. Great responses. Unfortunately, it is only one lot. The previous owner had 10 acres in 1972 and then decided to subdivide the lots but kept the biggest lot for himself, hence the one acre. Most lots in my neightborhood are .25-.5 acres. The guest house was actually a 5 car garage that he converted into a house.

Anyway, yes, I think my wife wants to stay but I know if we had an offer she would at least weigh out the options.

The true capitalist in me would take advantage of the opportunity, reinvest the 500K and buy another 400K house with 5% down. Also, my fear is that prices will come down a lot quicker than they went up and I'll lose this opprtunity. Probably won't happen soon (Austin in #1 in real estate, economic and population growth), but you never know.

Anyway, thanks again for the responses. I'll post our decision later.

One more question... I've used a credit union with great success for previous HE loans before, but not sure if anyone has any other more flexible options I haven't thought of yet.