All Forum Posts by: Chris Winterhalter

@Nazz Wang

Bringing in high speed internet for everyone would be very expensive.  If you set the connection up like a hotel the costs would be way outside of your budget.  Now setting up a public space connection might be cost effective.  

@Joe Fairless

I really like the scratch off lottery ticket idea, if someone wins they will attribute the winnings to management which is wonderful!  

http://nreionline.com/industrial/industrial-sector...

It's obviously been a boom for Denver especially in the Industrial sector.  It will slowly become an accepted industry in my opinion.  It will be tough to ignore like other potentially questionable industries like gentleman's clubs or "intimate shops" because of the sheer dollars involved.  

@Bill Gulley and @Brandon Turner should chime in...

@Al Williamson

It was my understanding that a lot of solar incentives have disappeared.  What's the typical payback on let's say a 100 unit complex (tenant paid electric except water heater/furnace) where you offer electric to the tenants?   

@Ramon Jenkins

Milwaukee is on the radar but not for the first development.  If you have a Milwaukee deal let me know....here's some more info...I want to be close to the urban core and demand generators, but not necessarily where other hotel pockets are located.  The brand runs like a hybrid multi-family/hotel. 

• Strong Highway Visibility &/or access with minimum of 50,000 daily traffic count
• Businesses with Traveling Employees (50 in 5 miles, 100 in 10 miles)
• Desired Demand Generators: Hospital/Medical Facilities, Universities, Military, Manufacturing, Industrial, and Commercial
• Construction and Health Care Growth
• Strong Multi-family Market
• Nearby competing extended stay properties (Extended Stay America, InTown Suites, Suburban Hotels, etc.)
• MSA population greater than 300k
• 2 Acre Parcel w/land costs under $1MM(depending on area). 

@Steve Steve

Please clarify property type and what your goal is?  The post is somewhat confusing.  

Are you trying to generate 100k in cash flow from your 2MM in equity?  Well that's a 5% return on equity and shouldn't be difficult to do.  If your current portfolio isn't providing that I hope it's an institutional, brand new, class A piece of real estate with Google in it signed for 50 years (or your debt is out of wack).  How about your interest rate/terms?  Can you refinance your debt for more favorable rate/terms?   

Or are you trying to add an additional 100k in cash flow to your current portfolio?  Clearly giving all the details will help BP answer the question.  

@Marco Rodriguez

I'm making some assumptions here but based on your comments....

Local bank, 70-80% LTV 4-5% interest rate, will vary by borrower, your relationship, & property.

There are many things to consider including actual value, after repair value, rehab costs, zoning, current tenant base, exit strategy, cap rate, cash on cash return, IRR, property management, etc. You need to properly underwrite the asset from A-Z.

Is this the highest and best use of the land including looking at the underlying land value? 

@Bryan Hancock

This is an interesting question and thread.  It's something I've thought about over the last few years especially as our real estate has increased in value and my ownership structures have become more complicated.  

Trying to find rules of thumb in commercial lending has been extremely difficult in an environment of constant changes.  Even my bankers seem to get tongue twisted from time to time.  I've found it very frustrating especially through some of our growth.  

I think @Derek Carroll makes some solid points.  If you are dealing with local banks on your new development projects I really think global cash flow and liquidity are going to play into underwriting more than a 20% swing on your PFS from assets.  But that might depend on the bank.  You might be over complicating the value based on the progress approach and I do agree with Bill G on valuing in-progress developments on cost.   However stating your opinion of market value on your PFS of completed projects and other illiquid entities is generally completely fine unless a specific audited financial statement is requested (specifically wanting 3rd party valuation).  Make sure the market value is reasonable and you have some evidence to lightly back up your opinion.  However if the bank isn't comfortable with the PFS they will generally let you know or question specific items.  If you start to get into larger deals additional information might be required depending on your "complicated" structure of outstanding liabilities.  Also as noted above talking this through with your banker is very important.  

We are looking for land in several major Midwestern MSA's including....

St Louis 

Cincinnati

Chicagoland 

We need around 2 acres to develop an extended stay hotel.  We are looking to build a series of extended stay hotels over the next few years and are looking to build additional broker and land development contacts.  Please contact me at the info below.  

@Caleb Chandler

Can you give us more information about the start-up business and existing parcels you are trying to purchase?  I'm unclear on what is an existing structure vs. just a plot of land.  I'm guessing the 150k piece is a small existing structure based on your comments?  They won't accept 150k for both parcels?  

@Reginald S.

I mean the value of the underlying land.  You would obviously have to factor in demo costs of existing structure, any environmental abatement etc, however that would be my first approach on establishing quick value.  If you are getting 12 acres of raw land right next to the deal then that might mean the land has very little value.  

Unfortunately these types of deals are not easy to flip without market or development knowledge (or without a little cash).  

You would need to use an option agreement (not a purchase & sale).  You can find form agreements but I highly recommend that your local real estate attorney review the agreement.