All Forum Posts by: Timothy Munger

I have a small apartment building that has a permitted gated parking area. There are only enough spots for 80% of the tenants. Can I not permit someone for the handicap parking and the empty space next to it? Since I know exactly who will have a permit or not (which will likely not be a handicap person because there is no elevator) why can I not rent those two spots out? I know by code the spots have to be there but...do they really have to operate that way.

sounds like a decent deal

Thank you sir, by the margins being thin I mean for me, not for the project. This area will have a very strong showing in the coming years. It appraised well, where I'd make a 100% return at least if I had to immediately sell it, but I'm hoping to keep it for quite some time. 

What level of risk would you assume in new construction if the project looks good/viable? Would you be comfortable with putting the majority of your net worth into one project? Say you started a project a good while ago (year or years) and at the time it only required 50% of your net worth as material prices and rents were lower. Now though, material prices and thankfully also rents are higher BUT it requires 90% of your net worth. Would you be comfortable with this or would you view it as too much risk even if the project looks very safe? 

Although you can pull this project off the margins are very thin. It looks very viable but it is easy to get stuck in the sunk cost fallacy. The area is booming or about to truly boom. What do you do? 

Thanks i found a bank that accepts full land value and 80% ltv ltc. I own the land and did all design to get us to permits. Until I see a bank disclosure then I have no idea exactly what to expect. 

Yes, I've never ever used my personal phone number. Sounds like my solution may be a good idea. Even if the water is gushing at my building I don't want to be called. I want them to call a company I designate in the lease as they'll get there faster anyway...but only if it is an emergency.

 Thanks yes I am talking about self management.

Do you all have an emergency contact while you are sleeping? I am assuming in the lease that you put that the renter is required to contact a designated plumbing etc service if a situation is happening during overnight hours. Also if they call for anything other than an emergency which will be spelled out (water gushing on floor, electrical outage, water outage, heat outage etc) they will be charged.

I apologize I'm screwing myself in my head right now on the math or how the bank views it.

Say if you have a vacant lot (you own) that already has design and basically is shovel ready (has permits)

Total project is $2 million

Land and equity you already own is $500k

Construction costs is $1.5 million.

So in this scenario all you need is a $1.5 million dollar loan for construction.

Since the bank is using equity at 25% does that now mean that the $500k will be subtracted from the $1.5 million since that is all you need?

Or is it from the total budget so it in total costs $2 million and the $500,000 will be used as equity to loan the full $1.5 million...so my loan amount is not subtracted at all?

Thanks

So you are still continuing to build...why?