All Forum Posts by: Rob Harris

Real Estate Attorney or an attorney that deals with"businesses" will suffice. Ask regular intrigue questions re experience and types of clients they typically work with.  

Yes, you can do your own,,, I have in the past. But one thing I realized later then sooner is that laws change!! Also it's SUPER important that you remain at all times in compliance with Corp record keeping and each state had its own ins and outs and your went to make ABSOLUTELY SURE you are in complete compliance so the Corp veil is not pierced. If it is you in a bit of trouble! 

Definitely shop or get a recommendation. My first one I did in Texas the guy PORKED ME! I then got another attorney that did more of them for me for 1/2 the cost! 

Start off solid and definitely for the minimal cost, have them maintain your annual compliance. It's totally worth it if you are running and gunnin doing deals. No time to worry about that tedious stuff! 

Good luck

@Jason Lamb - No problem. Appreciate a Big Fat Thumbs Up "Vote" for the post! Lol 

Best of luck to you! :-) 

@Rob Carr - OH!! And you gotta learn first how to properly evaluate a deal (property) so you can truly evaluate if its truly a DEAL! 

@Rob Carr - if you have no back ground at all when it comes to the basics of real estate investing, I HIGHLY suggest you look at the reading list to familiarize yourself with the VAST array of opportunities or here. 

Got first know why you want to invest. Then your risk tolerance. Then what can can afford with your current capital situation. Then what TIME you have to dedicate to becoming a successful investor. Then what are your true strengths and weaknesses are. Then you def need to find a mentor (or coach) and start building relationships within local REI groups.. Then,,, then. Then. Then. Then. Then.....

Before you even jump on the game you gotta figure out what part of the game you are best suited for at this time and build an understanding of how to get to where you aspire to go. 

I know in not finding you any definitive answers, but your question(s) are extremely broad. Really need to nature you focus and grab resources to help you do that and then write/ develop a plan of action to get to where you wanna go. 

Not doing much of the above caused me to PAY a lot of DUMB TAX over the years! I unintentionally paid for a lot of lessons (MISTAKES) by shooting before assuming and doing enough EDUCATED homework first! 

Good luck to you sir!! :-) 

I've never been to Maryland or that party of the country. My wife actually did some Post Doctorate work there at Johns Hopkins Hospital for a few years and loved the area.  Hope to check it out one day! 

@Jimmy Nguyen, @Bill Gulley is on the money! Dodd-Frank is your hurdle..... Doing what you essentially described, Lease Option or Rent-To-Own Sales, can help you get through the legal aspects of what you are calling Seller-Financing.... Get a mentor to help you and always Check with an attorney to assure you are in total compliance.

I build new for rental primarily for the following reason: 1) I am a builder and have the KSAO's (knowledge, Skills, Abilities, and Other) means necessary to efficiently and effectively build; 2) I buy all my land substantially below market value (usually off-market); 3) any land I buy at market has an immediate value-add component that can quickly make it worth more that what I paid for it; and 4) Cap Ex is generally MUCH less for new construction which means a stronger cash flow up front, but you are always going to need to maintain a suitable Cap Ex account if you are truly going to hold for more than I'd say 7-10 years.... but everybody has their separate opinions and thought process concerning what the "right" amount to designate to Cap Ex is proper.....

 And note: infill houses in established areas of development is a pretty safe bet, but when you start getting into multi-units (more than 4 units), I would highly suggest you do a needs assessment and run the numbers on ALL aspects that will affect your true Net.

Now get to work! Go make the RIGHT thing happen! 

Been to San Jose, CR ,,,,,, COOL SPOT

I'll think a bit more on what I could contribute (but honestly even with your very general question) my first BIG question before getting to the design and construction part of it is, "have you conducted an exhaustive needs assessment" to see what is actually what's needed as compared to what YOU want to build...?

Lastly, From what I understand is that 'things' move VERY slow in CR,, trying to get permits and all the legal requirements meet even before you do can break ground. My research has shown a LOT of developers from our of the country, not accustomed to these extended time lines have gone broke do to substantial carrying costs..... If you are local or at least KNOW somebody high enough in the food chain,,, you definitely need to make sure you build a very generous Calypso reserve into your project... Just my extra two cents..,.

I am not in one of your specified locations above but I'll throw this out to you as food for thought. A medium income market house with cedar fencing; minus the land and landscaping cost, I can build for between $52-60/sf.

$50/-55sf = formica in rental units built close to the $52-55/sf

$55-60 = Granit Counters or 2cm Granite plus custom marble counters in bathrooms unless Buyer selects full granite option if the have time to do so prior to fabrication.

25 year 3 tab roof shingles/ 5:12 pitch/ brick fronts & mailbox with rear and side elevations hardi-siding/  9' plate line/ vaulted to 11' in great room areas and kitchen (open concept plans)/ Stained Concrete Floors/ Pre-Fab Cabinets/ Chrome Fixtures/ Wall have batt insulation/ Attic blow in insulation/ std vinyl windows/ Fiberglass shower tub units and also a garden tub with wall tile/ all Chrome appliances but no refer/  std 3.25 base/ std doors - nothing upgraded/ no fireplaces/ 10x15' rear patios/ 2 car garage/ traditional style homes....

Land cost here was cheaper when I first got into this market.  It have now doubled within past 2+ years. All of my research pointed to some serious land appreciation costs coming to this area. I still have an infill lot I purchased from tax assessors office I paid $1,075(all utilities to the site). When I bought it 2 years ago it was easily worth $6k retail.  Now I could sell it for $10-11k...... When I do finally build on this lot and sell the house, I see myself easily making $27-28K net..... Land within the city limits has sky-rocketed I my partner and I made some good move gobbling up a bunch of infill and another 22 acres or so of raw land.... one 18+ acre plot (which the city just annexed into the city!!!) with a house on it that is paying for this purchase and we are out of pocket about $400 per month.....

I sub out EVERYTHING!!!  Have a solid team on the ground that allows me to run 95% of my business from a internet connection. 

Hope some of this helped! 

My first inclination from what I have heard is I don't think you can make that happen, especially if you don't have history of doing such.  If you had a lot more money/skin in the game you would stand a better chance.....  "Hoping" you can get it rezoned after buying is a very expensive gamble.  You could always make the purchase contingent on such zoning, but you would have to do some really hard selling to the city why it "needs" this project done in the location.  --- One thing is that each municipality has it own zoning regs with stipulations directly applicable to there jurisdiction.  For instance, you might be able to get a piece for property rezoned form Lt. Industrial to Commercial,,,, and that commercial zoning designation covers a plethora of developmental possibilities.... They will have a bunch of different options BUT, you have a get an (SUP) Special Use Permit for building what you want to build.  In that process aside from the zoning change can be lengthy and all of this is open to public comment, in support of and why it's not supported.  And as I stated prior, if your project does not coincide with the cities master plan, it will be a hard sell to go against it. And even if it is a good idea, they know once they start approving planning outside of the master plan, that will open them up for criticisms, etc.... You can't expect the to go to bat for you, unless there is some HUGE benefit in it for them... 

So....

Even if you had the cash to buy said property and had, the 40k down (plus significant reserves), I still think banks would shy away from your deal.... A project of such scope, you would have to significantly articulate to the bank how you can do it without any problems,,, even though it's construction and their are always problems..... If you don't have the expertise to put them at ease you would have to show significant ties to someone who has and that they also have skin in the game.

Bottom line is that IF you have the capital capabilities and you have performed a thorough needs assessment (all that will have to be presented to banking institution and to the city) and you still come back to the question,,,, is the risk worth the return,,,,,, ???

There are a lot of things to learn when biting off a project of this magnitude, so I would encourage you to grab a local mentor to help you through the process.  A lot of moving parts will have to be thoroughly addressed... 

Have ran into this prior.  There an argument that you could replace use for use... But you would need to get that in writing from the city..? And I mean all the city offices that could kill the deal. Also check the master plan for that area of the city. If it was rezoned, chances are they man tell you no and how they were simply waiting for your old house to be sold off and or to become delapitated enough to where they could successfully through Heath and safety laws, force it to be demolished. 

Lastly, I would seriously pencil out the financials to assesses if the ROI is strong enough to support the new construction option. All items from IRR, to plans, to any utility upgraded you will be responsible for to meet the CURRENT "CODE" for all trades , dirty work aside from demo, drainage is ALWAYS a major concern and will require engendering, will you have to install and or improve of site land or hardscape, disability access requirements, and a number of other factors..... Just wanted to through some of there to get your top thinking about the real costs to handle such an embarkation. . Might be a better financial move to do a major remodal.... But bottom line is the numbers as an"Investor" should be driving your decision making...

Good luck!! 

Might also find out who's building larger projects that size and directly approach them, but by doing so you would have to be knowledgeable enough to handle a deal as such. 

Maybe add verbiage to contact with a commercial brokr that if you bring the Buyer the commission is "X" and if it comes from any other source outside your personal efforts , the commission is "Y"....???

Just food for thought