All Forum Posts by: Matt Skinner

Talk about a quality problem.  First of all let me congratulate you on your success in life; not because you're 25 with a great job and a pile of cash, but because you are wise enough to seek advise.  

I own apartments in Texas and I would say that market is topped out.  It's never had higher prices, it's never had a higher demand, and vacancy has never been so low. These are all signs of "top of the market".  

I also bought notes SFR's in Indy 5 years ago and foreclosed to make my own turn key rentals. I think Indy could be approaching it's own historical top as well.

Both Indy and Austin were great markets to buy five years ago.  But don't buy stocks or real estate when they hit their all-time historical high. 

If I was you I would follow Gordon Cluffe's suggestion; buy a home with FHA, get your buddies to pay the mortgage by way of rent, and live there while you ride the appreciation of the OC market back up.

Remember, California has not made it's full recovery from the crash just yet.  In fact it is way behind the curve compared to Texas and Indy.  

If you can make anything cash flow (or break even while living in it) in so cal, you will reap the benefits. I've had houses go up $100k in a year or two in so cal - which would never happen in Tx or Indy.

Keep playing your cards right. 

And have fun. 

PS: I live and work in So Cal

We are developing luxury homes and buying large Multifamily here in so cal for cash flow.  

While this may sound like it would limit  assignments...  (Wait for it)

RPA-CA Revised 11/14 DRAFT -- section 22 pg 90 of 10 "ASSIGNMENT: Buyer shall not assign all or any part of buyer's interest in this agreement without first having obtained the separate written consent of the seller to a specific specified assignee. Such consent shall not be unreasonably withheld. Any total or partial assignment shall not relieve buyer or buyer's obligation pursuant to this agreement unless otherwise agreed in writing by seller." 

The key phrase is  "Such consent shall not be unreasonably withheld"

It has always required consent of the buyer to assign.  Now the contract will state that the seller better have a damn good reason if he/she wants to say no, 

I heard the authors of the revision talk about the new contracts yesterday and they were saying ithis language is specifically for the situation that @karen described. 

I think this will be good for wholesalers.  

At the end of this month the CAR (California Association of Real estate) forms are changing. One of the changes, purportedly, is a clause that will make the standard Purchase and Sale Agreement for single family residences, ASSIGNABLE.

Wholesalers, how do you think this will change your business?

Agents, how do you think this impact traditional buyers in the market?

Out of state investors, are your standard contracts already assignable, if so, how does this help/hurt your business?

Thanks @Michael J.  We are in the development business so I got several referals.  But the company we hired is actually a property management company in the North West that specializes in self storage and their forte is setting up systems and then training the owner/operator (work themselves out of a job) to run their own facility.

I bet most owner/operators (like me) will just keep them on...  

Oh, and @Troy Smith -  we subscribe to Costar which is a national database for apartments.  It's only for multifamily but you can pull cap rate surveys, rent surveys, solds, listings, etc on it.  It is super powerful.  I dont know how any serious investor could be in apartments and not have Costar.  It's very expensive though...  we pay about $700/month for it.  I'm sure there is something similar for self storage which is probably where the feasibility guy got some of his info.

@troysmith while what @Paul described is often what we do on an existing building in a market I'm more familiar with, I hired a feasibility consultant for this project. 

The feasibility study told us things like type of construction, market rent, concessions, etc for every other storage facility in the area.  

What we learned is that this market has only about 3.8sf of storage space per capita when the average demand is about 8sf per person.  

In the second phase the feasibility consultant would do all the financial modeling with different scenarios; climate control; onsite management; 24 hour access, etc so we can get an idea of what the highest and best use will be. 

I wanted to get a sense of Stabilized market value before I sank more $$ into this study and I thank you guys for helping out. 

Thanks @Michael Wagner.  Jack pot!

And @Patrick Hagens, that's exactly what I was hoping for. 

thanks Jay.

It's downtown grants pass.

All self storage in the area is operating at full capacity./occupancy.

I can build the facility for about $30/SF ($1.2m) and the units rent for about $.70/SF/mo ($336,000 gross scheduled/potential).

Trying to get a handle on my operating expense ratio. Any suggestions what percentage of my gross potential rent I should plug in for expenses so I can proforma my NOI?

I own 1.75 acres in southern Oregon that I want to develop into approximately 40,000 SF of self storage.

Anyone have any basic "rule of thumb" or "cheat sheet" operating expense formulas that I can use for a proforma? 

I hired a feasibility consultant and have paid for a demand/absorption rate study. 

But before I plonk another few thousand down for the consultant  to do a formal pro-forma I want to do my own quick-and-dirty SMV (stabilized market value) underwriting. 

Any tips or comments would be helpful - especially from those with experience operating self storage in this space. 

I own/buy in those AZ markets and am very interested in 20+ units and am happy to pay a fee for assignment. Great marketing plan. We do the same in Los Angeles.

If the current market value of the building is, say a 7 cap, and you tied it up at an 8 cap leave a little meat on the bone for your buyer so he gets a good deal. It's the same as saying if you tied a house up for $70k that was worth $90k (as-is) - how much should my assignment fee be? Adding a price/door only works if you have room in your assignment price to still attract a buyer with your mark up. And by the way, the answer to "how much" is always: as much as the market will bare.