All Forum Posts by: Greg V.

Martin Z. I agree. I like half vacant to fully vacant as long as the reason is the current management. Forced appreciation, cash out refi's allows us to keep buying without needing partners.

First, I would start with a knowledgable commercial broker to get insight into what prices those owners may be looking for. The one we use had 4 adjoining properties listed about 2 years ago and was able to give us some background. Basically that owner is near retirement but is not looking to unload his multifamilies any time soon. They just wanted to see what the market would bring. They are going to be difficult getting to a price that makes sense for a complex knock down and new development. Other business owners, we know just by working in that area. Either they tell us or others what their plans are. One of the owners I just emailed and we'll sit down to discuss soon. Another one is a corporate owned lot that will be a little more tough to figure out but will most likely have to go through a broker to convey a more professional proposal. Without knowing your situation, I would use a combination of brokers, mailers, phone calls, etc. I would just be flexible in how you approach each one.

I'm starting the research on a similar project but only 20 acres. I've talked with the city and they are on board which was my first step too. I also am quietly figuring out the price that each parcel's owner would be willing to sell at. I checked with the state on set back requirements from the waterline. Next is an architect for a rough sketch with square footage, entrances, parking space requirements, etc. From there, it's rough cost estimates from our contractor. Then using market research for leases, we finally get the answer to see if it's in the realm of feasible. If it's close then back to contractor for a more detailed cost estimate. Then to the bank with the entire plan and start quietly buying the parcels.

I'm on the other side of the state from you and have a little experience in this. I've found that in our area, existing commercial can still be bought for half of replacement cost (cost to construct that same building) if the place is vacant and need of some TLC. The issue with existing banquet halls is the changing tastes of consumers. Many people are looking for a different ambiance either country weddings, downtown historic buildings, etc. If I were going into the event business, I would be looking for historic properties that can be repurposed. High ceilings, rooftop decks, woodwork, etc. However remodeling historic buildings can be expensive. I know Wisconsin has a number of historic renovation and non-historic renovation grants up to $500k that are run through the municipalities. They nominate one project per year to the state. It's competitive but possible

I'm not a hotel owner but I travel a lot for work. Is it just me or does it seem that most hotels are marginally booked? Maybe it's just my perception. It's tough to get good deals at the suites like Embassy, Homewood, etc (you can't beat free breakfast, free dinner and drinks 4 days a week, and a full fridge and hot plate in the room) but all other properties seem pretty empty to me. I feel like a decade ago the hotels were a lot more full and I always had someone staying in the room right next to me. It's like the airlines and the hotel business has switched. Maybe it speaks to the bifurcation of the economy in general. The upper end does well and maybe the economy hotels do well but the other ones in between like Hilton Garden, etc are challenged.

I would definitely agree. Try to be contrarian. I do that by both researching national trends and local. On the national front, I read financial papers and news sites and of course read Biggerpocket blogs and listen to the podcasts. For instance, I think everyone knows multi-family is hot right now nationally. I would be cautious to invest in that area, not that I wouldn't, just that I would be conservative in the numbers. Latest Zillow research shows rental rates actually decreased in the Minneapolis area. At the same time, you have to be an expert in the area. Find a good broker that specializes in commercial properties. Many realtors will say they know commercial but ask them to show you how they analyze deals. You'll find out quickly which ones know calculations such as cap rates. They will be invaluable. I believe right now the contrarian investor should be in office space. Factor in longer vacancy rates (and have adequate reserves) and negotiate good deals. I think 5 to 10 years from now, you will be in great shape. Of course, it's all local in the end.

Our area has a good amount of commercial on the MLS. It actually has more than on Loopnet. That's probably not typical across the U.S. I'm also looking for properties under $3M

From a local bank we can get 70% bank, 25% seller with 5% down or 80% bank, 10% seller and 10% down. We haven't had to use seller financing yet but at some point will.

Perfect timing. Last night, I was actually looking for a list of closing radio shack locations. Thanks!

I go through a local commercial broker. In a small town, you can look at which person has the most commercial lease/sale listings by either driving around or looking on Loopnet. They should be able to get you previous sales and current lease rates. Be careful by just looking at current lease or sale listings on Loopnet. Commercial is very specific to the property plus many owners list properties at ridiculous amounts and will probably never get them. I find those happen more on the commercial side than the residential. Maybe someone else has a better source but I've found that the information isn't as easy as residential where some of that info is on zillow or move.com for rents.