All Forum Posts by: Travis Wilkes

I haven't completed a Section 8 in over 10 years but from what I remember any house could qualify if it checked all the boxes. The way you finance them shouldn't come into play. If you want to go that direction get there specification before you start any rehab to ensure you get everything the first time. 

Thanks for the comments. I feel like we have a great package put together (time will tell). We have a ton of equity in the property, our accountant checked over all the financials and finalized them. 5 year proforma and OpExp, construction budget, source and use of funds, Draw schedule, and construction schedule all included.

We had a broker run several market reports from CoStar to verify numbers, and decided to run the financials at 30% lower rates than this to be ultra conservative. We have the appraisal showing the values mentions. 

We will start calling banks ASAP.

We have been planning on redeveloping this property once leases expired. The property is in Temple, Texas CBD, which has seen significant revitalization, and needs a rehab to maximize value and attract high performing tenants(retail and office). The building is 3 levels (including basement) building with a total of 36,000 sq ft. Over the past 10 years only the street level has been occupied as the elevator was not functioning.

We are planning on a complete rehab to modernization the property. Due to our low debt in the property even with a construction loan and TI allowances of $1.5 million we can still charge below market rents and break even with 51% vacancy. All the existing redeveloped properties have been owner occupied including a $30 million dollar office project. Anything on the market for lease is class c or below with almost zero retail. We also did some initial market test and received positive feedback.

We tested the waters with our local bank and got the response that they don’t lend on speculative projects. Even though the building has been rented, due to no new leases in hand they weren’t interested. The property was also appraised at $1.8 million as-is and over $3 million when completed. We know there are lenders out there that focus on these deals and will look at the value of the property as well as the proforma and consider the full picture. In fact, I am sure several are on members of Biggerpockets. Any advice on how to locate and approach these lenders would be appreciated.

Amy, I would agree with Guifre Mora. If the current landlord was actively engaged in managing the property they would have enforced the lease and had the tenants fix the issues. I the tenants didn't respond in the proper amount of time the landlord could have fixed the issues himself then charged the tenant cost plus landlord involvement fee. Also as Kevin mentioned the estoppel certificate is necessary to ensure everyone is on the same sheet of music. Warning - if the previous landlord has been a pushover and not managing the property, you will receive major push back when you step in and start actively managing and requiring the tenants to comply with the lease agreements. Some or many may look for alternative spaces. I just went through this on a property, luckily for me my goal wasn't to keep this tenant. 

You Architect may have misquoted you on the front end or now. Either way they are always behind the curve on pricing. Best bet is to bid the project out and advertise on boards like Isqft.com and/or other local job boards. Your local printing shops can point you in the right direction if the architect doesn't have contacts at these boards. 

Since you are self financing you can advertise you pay draw applications within 48 hours that will get GC's attentions and potentially drive up interest lowering cost. You can also hire a 3rd party to evaluate the plans and do VE as well as plan check for any mistakes. The plan check will save you COs during construction. Going slow will cost you more money, your good GCs will want to hit the ground running and knock it out, then move on to the next job. The more time they are on your job the more it cost them and you.

My background is in Commercial Construction Management if you need additional help feel free to reach out.

Best of Luck

If you are interested in a specific industry you can hire a marketing firm to do some direct marketing to those folks. You can also go to conferences that focus on the industries you are wanting to lease to and just network or buy a booth and advertise. Joining any groups online or buying memberships as a trade member in a local organization can be helpful as well. Of course these are shooting in the dark unless there is a direct need for that industry in the area. Oh, join the local chamber of commerce as well.

Good luck 

Hello BP community, I have 2 acres in Taylor, TX and am considering a Joint Venture, using the land as my equity into the deal. I don’t have the deal put together this is just a thought at this point. I would love to hear any feedback from the community. Ideas, thoughts, experience, how do you determine if the partner is a good fit? I have a large commercial redevelopment starting and need to have a partner be the lead on this Taylor project. I am not in a bind to move on it ASAP as it has no debit associated with it.

It is currently zoned B-1 Local Business. As an alternative we took a multi-family site plan to the City, to test for interest and received positive responses.

Michael, thanks for sharing your insight, taking the time to respond to folks and give encouragement.

A few couple responses for the community,

1 – for those that don’t want to scale….don’t. Michael isn’t saying you have to go big. He is just letting the members, who want to go big or have that little voice deep down whispering wow that must be nice to own 1000 units, know there is a way and it might not be as difficult as you think.

2 - I am very familiar with municipal government, in almost every City over 100k population anyone can submit for a proclamation its standard practice. As Michael suggested it doesn’t mean you get one! The Mayor is not out every day looking for productive citizens to give awards to. He/She is typically focused on his Or her family, job and city. Same for the City Manager etc…. the City relies on the community to find these worthy citizens and then reviews the request. Every now and again a not so worthy person may get one, that doesn’t take away from the ones that deserve the recognition.

I don’t know Michael nor can I attests to his character or business expertise good or bad, and this is his first post I have read, just wanted to give some insight.