All Forum Posts by: Mike Lynch

Hi

I pulled the trigger, a couple of months ago, on a 2000 sq ft building in a very busy road frontage location in Ocean Isle Beach, NC. We have no mortgage on the building, as we flipped a large waterfront home for the funds. We burned the money up in order to do the 1031 exchange. We bought this commercial property and another house. The commercial building is split into two separate sides of 1000 sq. ft. each.... Each of the 2 units have glass entry doors and a solid wall between them to totally separate them. With the purchase of the building, the owner sold me a Business and the Business name....... The business is a shipping, fax, copy, notary, mailboxes, shredder, center. It also came with an employee, who has been running the place for about 10 years. The business does not make a wonderful profit, as it basically sells paper things.... Not jewelry, Computers, Guns, iPhone's, Dental Services, ….. just shipping and paper services.

Now, one half of the building will be empty in about 40 days, so there will be a totally empty 1000 sq. ft. very nice open room / office available. The rents in that area for a road frontage place like this, in a great location, is about $800.00 to $1,200.00 per month.

What to do?........ Start some kind of store or service in there which could possibly make much more money, or play it safe and just take the rent money from a new tenant? If I started a store, what kind of store? …... I have heard about buying truck loads of liquidation items..... Perhaps start a small, Big Lots, type of liquidation store..... Thrift store...... Good Will type of store? …... I also have interest in some sort of Senior Service, as there are more and more baby boomers, and Senior Care is becoming more in demand.

Any Ideas?

Thanks,

Mike

Thanks!

Bill, thanks for your response. .... We bought the big house because it was at a good price on a nice river. I wanted to flip it and live in it, but you can't do both right? My Wife and disabled Mother decided that they wanted to live in it after seeing it for the first time, so we could never see eye to eye on the subject. We rehabbed it very slow since they wanted to keep it. They were actually ordering furniture for the home and couldn't wait to move in there. I told them that we might just flip another one after we repaired this one. After we had it for several months, they started moving new furniture into the home where rooms were finished..... My Mother was really excited and was going to help us with some of the rehab cost, since she was selling her home so she could move in with us. If I started talking about flipping it, they were like, no way!.... We are going to live here!

Now, here's where things get bad. My Mother, went to visit her cousin near Charlotte, NC, in Sept 2016. One morning, she was wearing a pair of flip flops. She walked out on the porch, tripped, and fell about six feet down the steps. She broke her back, foot, ribs, and was rushed to the emergency room. She developed Pneumonia due to lying on her back in the hospital. She was 75 years old. We held on to the home for a little over a year and a half........ If the IRS wants to see a Death Certificate or anything else, we have it, and so does the county and state courthouses. I have to admit, I was all for flipping it or keeping it, as you can see in my other posts about it, but my Wife and Mother wouldn't hear of getting rid of it.............. So, their intent of flipping was out of the question. I told my Wife that selling it and buying something smaller might be smarter and finally she agreed. Do we really need 4 bathrooms and 4 bedrooms for two people? She is still not so happy about it.... She now says, every day, that we have sold her dream home.

My wife and I finally fixed and flipped the large "Nightmare" house that I have talked about in prior posts. My accountant said that we would have to pay over 40 something thousand dollars in capital gains unless we do a 1031. For weeks we have been looking for some properties. We found a property here in Ocean Isle Beach, NC. It is a 4 unit / single story building that is was built in 2008. It is on a very busy road 200 yards from Walgreen's, CVS pharmacy, Food Lion, a Planetarium, etc.

The 2016 tax value for the land and building is $355,320. it is 2000 sq. ft. total. The owners husband died last year. She dropped the price from $350,000 to $250,000 within one year. We told here we would pay $230,000 for it and she settled for $235,000. We put it under contract this week. The left side of the building is a Business Center that does all sorts of printing, ( architects blue prints, menus, flyers, business cards, faxing, phone answering service, resume service, etc ) 

The right side of the building has a three offices. Each are about 24 sq ft. One is rented to a general contractor. One is rented to a Massage Therapy Wellness Lady, and one office is totally empty. The three small offices combined collect about $1000.00 per month rent. The business center side would also collect about $1000.00 per month.

Here's a big bonus! .... The business center also comes will all equipment, computers, printers, plotters, scanners, file cabinets, desks, ( everything ) .. The business gear is worth about $50,000........ So, tax value plus the gear is $405,320 and we can buy it all for $235,000. .......Another thing.... There is a lady, ( 30 something) who works at the business center and she does not want to leave. She has been there for 9 years. .... So after we buy the place, we can pay her salary, overhead, and any profits that the business center generates will go to our bank. I also want to learn the business, so when she is sick or needs a vacation, I can work there. I am getting tired of the plumbing business. I have been doing it for over 20 years now and I am ready for something that is much less manual labor. It's killing me these days.

Any thoughts?...... We are still in due diligence.  Since the owner died, the place needs to be build back up to what it was before he died. Sometimes when the business office lady needs time off, or is sick, she just closes the doors for days at a time. We all know that a business can't run that way.

What do you think?..... Is this a good decision or something to run from? It seems like a pretty no lose situation or am I missing something?

Thanks Bill! ..... That's something to really consider.

Susan:   Right now I do a lot of emergency plumbing and property management work, so I can't stray more than 25 miles from home, doing hit and run service calls, or I miss their calls. I had to get rid of my two new construction plumbers after they started stealing parts from my work vans and doing strange things. They never acted strange around me, but several of my customers tell me different. I could not trust them anymore. I am a one man show at the moment. 

My Wife and I did most of the work on the two homes, after work and on weekends. I knew from doing plumbing for many years that the job would take twice as many hours and twice as much money as you think, so I factored that in and it came out very close to our intended budget. Always double everything to be safe. Murphy's Law will happen. We used a local Shallotte Realtor for both homes. 

What am I doing to find deals?.... Lost of research and phone calls.

South Carolina is booming and the prices are booming as far as I see.

Teddy, we close the flipper house near the end of this month, so I won't have a proof of funds until that time, but I am interested!

Thanks!

Chris,

Yep, The prices are crazy now from Myrtle Beach to Wilmington.

Well Folks, we have some great news. We closed on a home last week and close on another home that we have been working on for quite a while on May 23rd.

Not so great news: ... There is a huge Real Estate shortage in my area. Realtors are telling me that they have never seen such a shortage. It is so bad that beat up mobile homes with land are now selling for what nice foreclosures were selling for several years ago. I have been running ads on craigslist for several weeks and have not received one response. The websites and newspapers have nothing. People can't find places to rent. I run a small plumbing company and can't really leave the area to flip homes, due to my business.

Funny thing is, when I had no money, there were tons of homes for sale. Now that we finally have some investment money to play with, it is as dry as a bone around here and home prices are on the rise. There seems to be more investors around here than sellers.

Any ideas?

Thanks Guys!

My wife and I live in a small brick ranch 3/2 home in NC, worth about $120,000. We owe around $65,000 on it. Payments are around $674.00 per month including insurance.

My sister and I are selling my late Mother's home, due to her passing away in Sept. After splitting it with my Sister, closing costs, realtor fees, I might get around $60,000. Since the home went down in value, we do not pay capitol gains, so the Attorney told us. The closing will be on Apr. 24, 2017.

Mother's Home Zillow Link

We have another home that some of you have heard me talk about in earlier posts. It is now on the market. ( Finally! ... I almost thought we would never get finished with that monster )

River House Zillow Link

What to do, what to do? ....... Do we pay off the home that we live in first or keep making payments and invest the money from my Mother's home sale into something? I want to use the River house money to start buying some multi-family properties. Some people say to invest first. Some say to pay off the home that we live in first?....... Hum?..... I want the best bang for my buck, of course. I am not a huge risk taker. The time is drawing near to make some firm serious decisions instead of analyzing things to death. I would like to hear different options.

Thanks!