All Forum Posts by: Christopher B.

I don't disagree that golden parachutes shouldn't be handed out. Ultimately there needed to be repercussions for those responsible and there were not. You don't consciously tank the worlds economy to teach a few bad apples a lesson though. I think OP said it best, what changes came from that event that improved the financial system.. overall I don't see anything drastic. However, I am glad I didn't live through a Great Depression eating wild onion soup like my grandfather. 

"Tough love', like it and I do agree on this. Where were the repercussions? In general I am not a fan of bailouts, actions deserve consequences whether good or bad. I don't think we had the option to let them all fail in that scenario, catastrophic circumstances awaited. Shouldn't have handed out golden parachutes though.

Banks do a better job with loan requirements now but you'll get no disagreement from me that gov't leadership at that time failed to use the events of the crash as a catalyst for change that could improve the system. It's a tough line as well. I believe in a free market and don't want burdensome regulation but we must have regulation as well. 

I don't follow things as closely as I used to but it seems like the corps have learned they need to add some diversification into their supply chains. Wages are rising in China as well, they're focused on creating a middle class so manufacturing is moving around, including back to the US. We'll see what happens there. 

If we want gov't leaders to think past their next election campaign and on the bigger picture then we need to restructure term limits. Otherwise we will always be playing hot potato. Not many have the fortitude of Voeckler. We'll see if Powell can handle the pressure and do what's best for the economy long-term. 

I'm not a fan of bailouts but I'd love to hear what you think should have been done differently. This was a great case study for us during college while I was getting my degree in finance. 

 If QE was the wrong move in 2008 what was the correct one? Let the world revert back to medieval times? 

We're not on the gold standard, we have no real debt. Selling treasuries keeps foreign dollars from international trade here in the US which helps fuel our economy. There is no financial  requirement for us to sell treasuries to operate our economy and we could pay all of our "debt" with the push of a button though it wouldn't be the smartest thing to do so. 

Productivity is strong and wages aren't as out if line as people claim. Minimum wage in 1900 was $4/hr adjusted for inflation. If someone can't find a $15-16/hr job then they're not looking and they'd be making 4x the money people did then. So is the issue with wages low incomes or high spending? People have much more they can and like to spend their money on these days in comparison. Multiple cars, smart phones, internet, computers, streaming, etc

Since 1900, inflation adjusted housing cost is about flat and food has gone down due to advances in farm technology. It wouldn't hurt my feelings to see the top 1% pay more in taxes but there's not been a better time to be alive.  

We'll see about the commercial bubble. There is a lot of money out there right now chasing returns. Wouldn't hurt me feelings if the Fed raised rates.

No problem. I read your location as Seymour, not Sweetwater, my bad. 

The short answer for you is yes, a deal can be structured where you can get equity without contribution much or any of the capital.  

You'll need to:

1. Be bringing the deal to the investor which requires a level of knowledge in evaluating the opportunity 

2. Have the knowledge and skills to get, or at least significantly contribute to helping get the project completed

3. Putting in sweat equity. 

For example. I am looking at a commercial deal right now. I found the deal. Completed the market feasibility, which was verified via a 3rd party. I am putting together the plan which includes: the construction expenses, financing, pro-forma's, operations, etc. Unfortunately, I don't have enough capital right now to take it down by myself so I am talking to some investors on a partnership where they bring the cash and credit then I bring the deal, knowledge & skills to execute it, and some sweat equity as my company will handle the construction portion of the project. We'll most likely oversee the operations on the backside as well. 

I'll bring little to no money to the deal but take a substantial portion of the equity because of what I bring to the table. A structure like this is similar to what you'll need if you don't wanna bring cash in. It doesn't have to be that much to start with, anything can be negotiated, but you need knowledge and/or sweat equity if you want to avoid being limited to a wholesaler or bird dog on a deal you find.

That is awesome. Love the mindset, sounds like you're on a great path.   

There has to be balance. Embracing delayed gratification is important and that discipline will help you achieve your bigger goals. However, you can't grind yourself to a nub either. You need to create big goals with milestones you achieve along the way. Predetermine some kind of reward/celebration for yourself when you hit these milestones. Could be a vacation. Could be a steak and lobster dinner. Whatever you want but make sure to celebrate the wins along the way or you will burn yourself out. Mentally, this will help provide motivation. Having a small taste of the fruits from your hard work and sacrifice will turn you into a success addict and accomplishing your goals will become your crack. 

I did the opposite of this advice and just about burnt myself out. I was always "too busy." Gotta live along the way.

I'd check out Profit First. It is about cash mgmt for business but it also discusses the ideology and psychological importance of rewarding yourself along the way. 

Also read Miracle Morning. It's about taking time for yourself first so that YOU can be the best version of yourself and how that will make you better in all aspects of your life.  

There are people who can offer more sage advice than I, hopefully they chime in for you but I'll do my best to provide some insights. 

Without spending some money you're not going to get a highly accurate cost of development, imo. Start with round #'s and work to continuously sharpen them as you check-off due diligence items during your feasibility process. 

There are a lot of variables to determining the cost of development.. hard costs, soft costs, financing costs, holding costs, etc. Does the city have impact fees, is there a lot of clearing and excavation work, soil conditions, engineering, are utilities convenient, plans, surveys, etc, etc.  

I'd look for knowledge in these places:

- go to local real estate meet-ups and ask around. A multifamily investor may or may not be there but someone will likely know who the local players are. 

 - If there is a local commercial GC doing a multifamily call them up and schedule a meeting. Discuss the situation and work to get some ballpark figures on the hard costs.  Contractors hate giving ballparks because there are so many variables but it can be done.  

- call to your building/zoning department to learn about the process, what can be done, fees, requirements, etc. This will give you some direction. 

- talk to commercial lenders. They may have some insight on #'s if they've financed a similar project and they may have some people they can connect you with. This could be beneficial on numerous levels

- contact local commercial developers. Google, pay attention to signs, etc. They can give you big picture numbers and connections if not be interested in a JV themselves which would incline them to spend some time helping determine viability and maybe even a pro-forma.

- reach out to syndicators

- good CPA's are well connected and know the numbers. Call yours and see what they can share and who they can connect you with. 

Hey Shane, born and raised next door to you in Blount County and do specs myself. People that don't live here in these hills like we do can't fully understand the dynamics of us TN Hillbillies. 

As Andrew mentioned, lot clearing and excavation work, while expensive indeed, is a smaller % of the overall project and it'll be hard to find someone that will exchange equity for the work unless it's a larger development like the 50-250 acres you mention. If you have experience with cabins on the side of the mountain then there is even more value there as not all excavators know how to do that.  

The biggest value you would bring in this scenario is finding the deal. Your ability to "see dirt", as I call it, is valuable (especially if it's mountain work) because it's not easy but may not be enough alone. If you combined that skillet with knowledge of zoning ordinance and code then you'd be cooking. 

I personally do spec builds and development in Knox metro. For example, if you called me up and said 

"Chris, I found a sweet deal on 50 acres with amazing views for $300k, we'll need to rezone but there is precedent for it down the street so that shouldn't be an issue. I figure with road, septic, etc, etc we can do about 35 cabins, excavation is gonna take this long and cost this much, etc."

Combine that with doing the excavation work and you'd get equity in the deal. 

My .02 cents.