All Forum Posts by: Edward Briley

Yeah, but when you see major department and grocery stores closing and the new tenants are thrift shops,  it doesn't appear to me that the commercial real estate market is doing very well.  Even being able to purchase some of these, "corporate quality" centers for 10 cents on the dollar, does not even give me a good feeling.  Many of these are prime locations with heavy traffic flow in busy retail areas. 

I guess I am trying to convince myself that buying commercial may be worth it.  I don't know, the more I see, the more I want to run away. 

Matter of fact this year on the Virginia Beach Ocean Front strip, I know many of the stores will be empty in the prime season.  Already I am seeing Oceanfront Myrtle Beach Condos for sale for less than $100,000.  This even scares me more.  At the same time, I know buying in a down market, may be the best investment anyone can make.  For this reason I am asking the question.  So, what do you all think? 

Well the ones I have been looking at have no tenants in place.  Matter of fact one was a gas station built in the 1960's.  The location is busy right off a major interstate on/off ramp, however, the area is not the best, and it still has the original tanks in the ground, which will have to be removed.  The area it is in has no other choice than increase in value, and any monies I will invest will get a decent return now in today's market.   However, overall I am not sure by seeing that the number of commercial places I am seeing at present - even in high end areas - are not being leased, mainly because of the asking price I am assuming?

So, overall I am just trying to find out on how the commercial market is doing, before I make a leap into any commercial  property.  It is sad when you see business places for rent that are on the border neighborhoods of million dollar homes, and they are not being rented, and have been sitting for rent for well over a year or two.  I am seeing the same in large retail complexes as well.  I found one really disturbing.  $600 for a 1000 sqft per month for retail across the street from a major shopping mall.  This gave me pause alone, to check into on how the commercial real estate market is really doing? 

My thinking now that buying rural land may be a better investment?   At least with that I can do with it is I please. 

I am about to sell another flip, and I have been deciding rather or not to buy a commercial property to flip, for the reason that the banks are wanting too much for dilapidated housing that has all turned too competitive to compete. 

I am seeing some commercial properties now that can be bought with owner financing or ones that are dilapidated that seem to be good deals.  Is it the right time to buy commercial or should I wait for a while longer until the 7 to 10 leases expire on properties? 

Of course I know, location, location, location....

I am just curious about the commercial property market at this time on rather it is a good investment or not? 

Oh, and by the way,  My Realtor tells me it is because of the school district it is in.   I want to tell you there are waterfront homes for sale for under $200,000 not far away that are in the same school district.  However, rentals are booming in the area.  I am a flipper, not a landlord.   It is sad to tell you that homes in another school district are for sale less than a block away from a comparable $200,000 home, for over a million dollars.  Same waterfront view, same street.  Matter of fact a few of them.  Isn't it a shame that a school district would dominate the cost of homes that significantly?   Needless to say those million dollar homes have not sold, and most are now "For Sale by Owner", even though they are in best school district in the city.    Water front homes that do not require flood insurance are few and far between, however, many of these do not.

One more thing, a city council women lives two doors down from the home I am trying to sell and has two children, that attend private school, because the city has a voucher program for that area.   Why would she and her family live there?  The houses are increasing in value, newer, and you get a lot of bang for your buck at present, so until the home sells, I will pay the real estate tax, utilities and sit on it.  I may not be asking enough for the home is why it has not sold.  When my contract expires with the broker I have it listed through, I will sell it myself within a short period of time, I am sure.  I just find it sad, that a home that nice and beautiful is not selling.  The only reason I bought it is so I could make it a nice home for a family, that was inexpensive to own and maintain.  I would be surprised if the appraisal came back on the home for less than $125,000.  The homes that were used is comparables were either foreclosures, or houses needing a lot of work.  The last home on the block sold in 2011 for $69,900.  It needed a lot of work in which the owner performed.  The reason not many have sold on the block is because most of the residents bought the houses new, and have stayed there or sold them in the mid 90's.  Of 25 houses, 2 are rentals, and one is vacant, because the owner is in a nursing home.  

The lowest price home for sale in the area that is a comparable is also a foreclosure the bank is trying to sell for $60,000.  It is a little smaller, and needs a lot of work as well, and on a street that is much lacking curb appeal.   They may be waiting for mine to sell, before they will take a lower offer on it, I don't know, but I have made a few offers on it they have refused.  With the work the city and investors are doing not far away from the home, that I can see its future value of this area going through the roof, mainly because of its location.  It is located within walking distance of one of the areas largest employers which is pressuring the city to upgrade it's surrounding neighborhoods.  Good paying industrial jobs are located on both sides of the neighborhood. 

The comps show it should have a selling price of about 90 thousand, in which it is for sale for that amount. 

Well the truth of the matter is that I don't know what it is actually worth for a rental?  I will tell you this, an appraiser should be able to tell me with just a few calculations.   IMO it should be worth around $150,000 dollars, but I have it up for sale for a little more than half of that, but would take that half of that for it.  It is odd that it hasn't sold yet. 

How much would you pay for a property that was in like new condition, 3 BR 1 Bath brick home, hardwood floors throughout, with exception of kitchen and bath which has new ceramic tile.  The home has brand new replacement windows and a maintenance free exterior and was built in 1981. Everything new, from the appliances, HVAC, roof, custom built kitchen that was built to be landlord friendly, along with many other extras.  The property should generate income no less than $1100 to $1300 a month.  There is no doubt that this property will have at least a 10% appreciation per year over the foreseeable future. To add, I will sell the property 10% less than assessed value for the right offer.   It will  appraise for much, much more. 

Just how much is the property worth? 

 The truth is that sub $30,000 properties are found all over, and even in your own backyard.  The thing is that many that are looking for these properties think that they can buy one in million dollar, or upscale neighborhoods.   This is not likely to happen.  The "Dirt, Lot, Land" or whatever you want to call it, is worth much more than $30,000 in these neighborhoods.  You describe many of the neighborhoods is "war zones" or "depressed rural areas".   Believe this or not, either may be a good investment.  Furthermore, if you are investor, who is going to clean up these areas?  Who is going to bring an economic future to these areas?   Investors, that is who does it.  So, when you see these distressed properties, you have to think, "What can I do to make this area better?"  And of course, how much would it cost me, and how much time will it take?  Check out the comparables, and the assessment values of these properties.   You have to know everything.  You may be surprised that many want to live in these communities, and are looking for a good home deal.   The worst thing an investor can do is put lipstick on a pig.  When I buy a distressed, single family, I expect to put at least another $30,000 into the property to make it desirable to a buyer.   $30,000 profit for a $60,000 investment is a good return.  Matter of fact, $30,000 profit is even great for $100,000 investment if you can do it in within a years time.  Time is money.  If you expect to double your money on a real estate  investment, it is not likely to happen in a short length of time.  How do I flip a property?   I pay cash for the property and use Visa, M/C, Lowes and Home Depot credit to get the job done.  Many smaller businesses give me a credit line up to $10,000 for 90 days, at which time I pay off with a major credit card.  (Hint: It saves on credit card interest).  It helps them and helps me also.  If I sell the property before the 90 days I pay them off in cash. 

 I gave your advice to a friend of mine about 10 years ago.  I wonder how many homes he has built since? And he works a full time job, and I am now retired. 

 Not that bad here, but at the same time I don't know the amount, because in different areas, the cost is different, because a lot of the land here is very close to water, not only that - the Chesapeake Bay to be exact.  With this being said, I expect about half of what you are quoting.  I have a phone number that I can get exact amounts, however, I am not ready to make that call yet.