All Forum Posts by: Leon D.

Don't trust an appraisal that isn't yours, odds are good they're trying to tempt you with stories of "built-in equity." Also, how is rent being paid? By the actual tenants, or by government voucher? Do you have a plan if the tenants die or the city runs out of money to pay?

Something else to consider, depending on your local zoning: the building may be *required* to be a boarding home. For example, last time I looked into it here in Chicago, SROs (single-room occupancy, aka half-way home or boarding home) had to stay that way, unless the owner was able to vacate the building entirely and rezone, which of course required the city's permission.

The easy answer, is to not still own the building/site when the lease ends. Make lease renewal, site redevelopment, or re-tenanting someone else's problem. 

I stay away from them. Nothing to do with gas vs. electric, my issue is that you're buying an improved plot of land that has tanks that regularly contain tens of thousands of gallons of petrochemicals, underground. I don't need that kind of headache, from thinking about leaks to EPA Phase I's or worse. 

Granted, lots of people make good money developing, owning, and/or redeveloping these sites, but they're not for me.

Regarding maintenance, a few things to check up on and improve: landscaping, exterior lighting, roof, HVAC, parking lot (specifically potholes and restriping), signage, interior common areas. As far as tenanting, easiest (and free) would be Craigslist. Also, drive around strip malls that have professional tenants (or rather, tenants that aren't dry cleaners or restaurants). These will have small footprints (easy to move), and they'll be somewhat price-sensitive. If their leases are close to expiration, you might be able to entice them to move or even break the lease.

You want the LLC. I think what the attorneys are referring to when they say LLCs are weak, is the phenomenon of single-member LLC members (the owners) not drawing a line between themselves and the LLC. You need to erect and maintain the "corporate veil." For example, you should have a separate bank account for the LLC, contracts should be in the LLC's name, get the LLC its own credit card, LLC bills should go to and be paid by the LLC, don't unnecessarily pay LLC bills out of your pocket and vice versa, etc. Lots of people create the LLC but don't treat it as a distinct entity, which gets them into trouble later.

As @Jay Hinrichs said, could just be a typo. You'd have to verify some other way. Could also have been some sort of estate planning shenanigans or similar; assuming the price is accurate, no way to tell (also, doesn't really matter, it's just an outlier). 

The small orphan tracts are exactly that. Depending on the vagaries of Spokane zoning, at some point in the distant or near past, the lot owner split off a piece and gave/sold it to someone else. It's sometimes seen here in Chicago, and I'm sure plenty of other cities. If it's recorded correctly and legit, then you have to consider it just like every other parcel.

If you planning on forming a single-member LLC, you can handle it yourself. If multi-member, absolutely use an attorney.

@Richard Ball As they say, the plan is not the terrain, so I can only offer my thoughts from a few hundred miles away. It doesn't sound bad.

The buildings seem solid, if on the older side (be sure to stay on top of maintenance). But, the tenants seem appropriate for the area and the age/type of buildings, and they've generally been there a while, which shows that they'll probably be there a few years longer, at least. 

If the buildings are are close together (and as you said, close to the only ones on the block), you essentially control that pocket. If you spend a few bucks on landscaping, lighting, and other exterior/neighborhood-type improvements for each of the buildings, you'll raise the desirability of the area at least a bit. That'll allow you to raise rent, attract higher paying tenants, etc.

It'll be a challenge, but could be well worth it. Good luck!

Don't know the exact layout of the property, but why do you feel you need to kick-out the upper-floor tenant in order to rehab and occupy the lower floor? If you're trying to be considerate, it seems to me that kicking the guy out after eight years is much worse than him living through a few weeks of noise.

@Kevin Manz not quite. A bird dog points out a potential good deal to an investor in exchange for a fee. Kind of like a talent scout: they don't represent the talent, neither do they necessarily work for the agent. Instead, they look for talent and pass them on to an agency, and if the talent is signed, the scout gets a fee. The bird dog carries no risk: if the investor doesn't want the property, the bird dog just continues looking for others, since thy never bought or promised anything from or to anyone.

A real estate wholesaler contracts with the home seller, markets the home to potential buyers, and then assigns the contract to the buyer. The wholesaler makes a profit on the difference between the contracted price with the seller and the amount paid by the buyer. The goal in real estate wholesaling is to sell the home before the contract with the original seller closes. Essentially, a middle-man. The wholesaler carries the risk of getting stuck on the buy-side if the sell-side falls through.

Read more: What is the goal of real estate wholesaling? | Investopedia http://www.investopedia.com/ask/answers/100214/what-goal-real-estate-wholesaling.asp#ixzz43jRnT5ur