All Forum Posts by: Steven Stokes

Hey

@Zach Schwarzmiller

thanks for the welcome. I checked out the meetup let me know when you guys have another meeting I would like to attend.

@J. Martin

yeah I just found it! It looks promising - not a lot in Tacoma, WA but plenty in Seattle and in California. Thanks for sharing.

@Brandon Turner

Thanks for the welcome. I set up a few key words. So far I'm enjoying the site a lot. I'm looking forward to learning how to work and use the site to help myself and others on here. Thanks!

@Joe Fairless

Thanks for the list of books. I'm a big believer in the saying, "Readers are Leaders." So I'm looking forward to checking out some of the books you mentioned. Thanks

There are Buyers markets and Sellers markets.

In a Buyers market it's easier to buy and a little harder to sell but you still make a profit.

In a Sellers marker it's a little harder to buy but easier to sell and make more money when selling.

Personally, I like a Seller's market because I make more money in a Seller's market than in a Buyer's market but nothing guarantees success or failure. Every deal is different and stands on its own.

So the same as what everyone else has said the best time to buy is when you have a good deal.

Hahaha I love it! All good points!

So since you've been in the market for some years, what is your opinion on buying RE using creative financing or lease/options?

There are three things I look at when going into a transaction, and it doesn't matter if it's a commercial property, residential or a business, I look at what is my potential gain, what is my potential loss, what level of risk am I taking in this deal?

IMO just because a deal is outside of the box doesn't mean it's a bad deal and I sometimes feel like, for some agents that I've worked with, if it doesn't fit into a standard, cookie cutter, every single day agreement -- it's wrong.

I believe if everyone is transparent, if everyone knows the risk and there is a base level of protection is given in a deal-- then is a deal is a deal. Even if its not conventional.

What do you think?

@Stephanie Dupuis

Hey Stephanie! I just drove through there a few days ago. Nice to meet you.

@J. Martin

I just joined BP so I'm not sure where to find or make friends? I just moved to Tacoma Washington from Los Angeles so I'll be here for a little while but I love San Fran and I used to date a girlfriend who went to Berkeley so we were up there a lot during football season. How is the market there?

So I'm new here on BP (so I could be totally wrong about this) but I've been reading a lot of threads from different people asking questions and I have noticed that there is a difference between how "investors" answer questions and how "realtors or agents" answer questions.

The Realtor answers tend to be straight down the line conventional and it's black and white and that's the way it is.

The Investor answers tend to be somewhat creative, a little different, a lot of gray.

I've been investing for years and I've dealt with a lot a agents in all shapes and sizes and skill levels.

Knowing your agent and your agents personality is just as important as knowing the deal you're working on with them.

I've had agents who made a dead deal a home run! And I've had agents who made a great deal turn into a nightmare.

But all in all, I think agents and Realtors tend to be more conservative because they know that there are a lot of deadbeats and people who couldn't close a door, let alone a 100k property.

I don't see a lot of bad advice being given but there is a range of advice being given.

The same is true in the real world with Sellers, Buyers and Agents. What one person would accept, another would throw in the trash and never call you again.

It's just something I noticed and wanted to comment on. If you agree or disagree let me know I'd be interested to hear what other people think :)

For investments I would say most of the center states are great, the east and west coast are not as investor friendly but for some reason I continue to live there.

I've gotten some amazing deals in the South.

But I think you should live where you'll be the most happy because there are good investments everywhere.

I hope this helps and good luck :)

You really need an attorney for this but I've done this kind of deal several times before.

You will want a separate agreement. One contract for the business and another one for the building.

How binding is it? There is no magic contract that will keep you out of court that depends more on the person you're selling the business to, if they are a person of their word you barely need a contract, if they are not then no contract in the world will help you.

But separate contracts is the way to go in my opinion.

BTW, I just moved to Tacoma. Hope you stay in touch and good luck! :)

I'm not sure about your market in Texas.

FREE: I would call a commercial broker in your area and pick their brain as to what language they normally use.

MAYBE NOT FREE: Find the best real estate attorneys you can find and ask them.

DEFINITELY NOT FREE: Have a real estate attorney look at your contract and have them write the best language for your contract.

My first questions are do you know the ROI and CAP off the top of your head because if you don't.... well we'll talk about that later.

The ROR/ROI Formula is: ((Return-Capital)/ Capital) = Rate of Return

Example – Invest $100,000 in real estate and a year later the property is worth $125,000. The ROR/ ROI is 25%, calculated as follows:

125,000-100,000 = 25,000/100,000 = 25%

Most of the time, Cap Rate (Capitalization Rate) is used for estimating the value of commercial income property. Cap Rate represents the projected return for one year, if you purchased the property with all cash.

The Cap Rate formula is: Operation Revenue – Operating Expense = (Net Operating Income) NOI / Sale Price

Example – Property has a NOI of $125,000 and sales price of $1,125,000.

$125,000/$1,125,000 = 11.1% Cap Rate

Cap Rate is a useful formula to know when looking at commercial/rental property; however, it doesn’t take into consideration the debt, the cost of the debt or cash flow. The value of the investment and the ROR are important, but how much cash is going into the bank every month is a big factor.

Give me more of your analysis and we'll be able to tell if you have a better deal or not.

The more you know about your deal and your market the better off you will be.

I hope this helps and good luck :)

@Alex Koerger

Hey I think I know where that is, I'm not new to investing but I am new to the area so maybe we can work together :) haha

Hey it's nice to meet you. Are there any networking or real estate groups in Tacoma?