All Forum Posts by: Brian Kraby

On a build to suit is there a developers fee and construction management fee factored in?  Rent then is charged independently of site work? 

Trying to figure out what to charge for not only rent but the compensation for the risk and time to see it through. 

If so how does it look on paper?

Any thoughts?

Thx

Thx!!. Found out from the architect that sf cost is actually $140/sf and gross sf is 2356. So $330k is what is on the budget. 

So based off this is it possible to show how a cap rate of 8 would mathematically play out?  I know I’m not including some costs but just want the nuts and bolts of how to calculate it. 

thanks!

We plan on holding it long term.  Also I will get an attorney. But for now...

 So how does one come up the rent price?  For example if the building were to cost $750K do we rent per square foot or some other derivative?  I’ve heard of how people rent based off of Cap Rate is that true? How does that calculate out?  I guess I’m looking for starting points. 

Again, thanks!🙂

HI,

I am considering constructing a 2200 sf dental office. Due to the specialization of the plumbing and electrical, etc, I will have an above average outlay in cash compare to office/retail space. Estimates from architect/contractor are coming in around 285/sf. The practice will furnish their own chairs, wall fixtures...basically providing the vanilla shell. Dentist is willing to sign a 10 yr lease and is credit worthy. NNN lease.

 I already own the land its going on free and clear.  I plan on getting 10 year loan on the building of a rate around 5-5.25%.  So some questions to ask:

1.  How do I set the rent?  Is it based on my mortgage plus profit for taking the risk?

2. Will the CAM fees assessed on top of the rent to the office have some operations profit for administering the arrangement?

3. How do I set the cam fees?  Since there is no historical value to start from, do I set a number right away or have a contingency to reset   on the next year since it is a de novo building?

4. Do I need a broker or can I pay an attorney to set up everything, or myself?

Thanks

Does your offer to the bank have the name of the land trust attached to it? In other words, what name appears on the 1st short sale offer? For instance, would my 1st offer on a short sale be in my llc's name or in the land trust's name?

Ok,
I have a seller of a duplex that wants out. Owner is in default and is behind about 20k. Sheriff's sale is end of October. Technically, the owner gets postive cashflow but has other properties that don't and just wants out. Here are the details that I have at this moment...
type: Duplex, both units currently rented out
Built: 1903
sf: 3400
gross rents= $1900/month
owes around 200K
Taxes: actually all caught up, but are $4200/yr

Owner said he just got a statement from "servicing company" saying they want to work something out, but the owner dosn't care and wants to walk away. My idea was to deal with the bank on a short sale for around 100k and meanwhile find an end buyer for around 150k. I would use a "flash funder" for the 100k purchase and do a double close on the same day to the end buyer. At 150k the place would still cash flow for the buyer and thus making it a win/win situation...right?

Two problems. 1. dealing with banks to even agree on a number
2. what if I get the number I want but can't find an end buyer.
My backup plan would be to use HML to fund the front end until I could find an end buyer. Any HML's out there that would care to finance for up to 12 months until it sold?

Any other ideas or critiques on this strategy or source of funding?

What is the difference between the two? Or are they one and the same?

Okay please help me get this straight. I'm on the fence with this but...

If you have an older unit and you think something is major coming up then get one.

If a new roof, heat, ac, etc., needs to be done then it qualifies as a capital improvement. Right?

If so, then depreciation on those dollars is spread over 27.5 years. Right?

Insurance premiums are deductible as operating expenses in that fiscal year. Right?

Sooo, to me a home warranty sounds like a great hedge even if it means putting up with the BS that may come with it. I mean, it sounds like a get-out- jail-free card with tax friendly implications. You can recapture the premiums ($400) through tax deductions in one year and less out of pocket dollars; versus a $5K capital improvement job, entirely out of pocket, only to see its depreciation spread over 27.5 years.

Is there something I'm missing? Let me know...

Sure, David.

If you believe the late great Milton Friedman then one is to assume that the sole purpose for going into business (any business) is to achieve and maximize profits. When I want to put an offer down that may take a lot of time to put together, etc, then I can't help but think that the realtor is probably wishing he was doing something else more productive, something with a higher list price and not with some cheesehead with a lowball offer. Maybe he is not? Who knows, but if I were a realtor I probably would not want to work for me for VERY LONG...

As far as prices, I am well aware of controls the prices. All the people and books I read on this subject highly recommend using a realtor. I agree with that! I just want to know that given how low a price point needs to be in some markets to turn a profit, then how long will any realtor stick with me?

By the way I don't believe in altruism. Nobody should be compelled to SACRIFICE themselves for anybody else. Sacrificing alot of time and energy for lower dollars doesn't make sense.

I have an agent that I used to buy my first investment property. It was a REO and a lowball offer. It was accepted. In a way, I feel that because we live in a small college town (15,000) that my continuing my business with him (which I would like to) would mean lowering overall comps. This would mean going into "business" with this agent with diametrically opposing goals. I don't see how we can keep both of us happy. I don't mind doing the leg work but at that point why not just submit the offer myself?

Heather -- What kind of commission structure were you tallking about? Fill me in on the details...