All Forum Posts by: Tyler Watts

Lots to pull apart here. The FL home is a personal decision you have to make for yourself. Don't forget your taxes on a sale! This is a situation where you need to run a few scenarios and see how the numbers shake out. 

Sell vs. Rent (and the tax implications of both). I'm a fan of using HELOC or LOC if you have the equity. I used a LOC to build a 12 site RV park in a small town, opened it up and 1.5 mnths later, I'm full occupancy and servicing the debt (some of it at 8.75%) & cash flowing. Just foced on long term RVer's, no transient.

Cabins are a different beast, I have 10 at another campground I built- Broad River Campground located in Mooresboro, NC (Has Cabins/Domes/RV Sites, Tent Sites)

Cabins are sexy to talk about for sure, but you are now entering the hotel business my friend. The OUTDOOR hotel business. Not only do you have to do all the things needed for the inside, but you also have the outside to worry about as well. 

It can be done, but don't assume "they will cash flow nicely". Occupancy rates are not 90%, it's seasonal, especially the mountains. I would run occupancy rates at 40-50% and see how the numbers look. Unless you're just going for long term tenants. 

Also the value (in this case) is determined by the NOI, so assuming it will be worth 2x, is assuming your NOI is thru the roof (which is can be, but it's not likely in the first 5 years). I love cabins, and the RV park space, but like anything else, it's about NOI and there is a ton of blood, sweat, tears and busch light that goes into that number. It's not a get rich quick scheme, it's a lot of active work and I would have 5 yrs in my head at a minimum before you truly become established and stabilized.

Sticking things AirBnB does get you traffic, however it's not a 90% occupancy rate, again it's seasonal. 

Hope this helps. 

Reach out to local banks, take them to lunch and tell them your story. Loans are nothing more than networking, and strong financials which you look to have on the property. Get at least 3 term sheets and compare them and go from there. Cash out re-fi's are very difficult given the economy and the fact it has been an election year. Everything is about DSCR from a banks perspective nowadays.

Welcome to the world of bank loans! There is not secret sauce, especially on a value-add deal like you're describing. The under writing doesn't carry for a 1.25 DSCR which (at the moment) is the golden rule for banks and commercial hard money lenders.

First off- $4.5M for 48 units and 50% are vacant is not a steal, unless this property is located in a downtown area and you have a contact with a developer who will pay 2X to build a high rise. $93k/unit for 50% vacancy doesn't carry hardly any debt, hence why they are capping you at $500k. It's about NOI and DSCR.

If you're confident in your UW and the numbers do make sense, I would recommend a seller carry deal. That's the only way this would work for you and the seller unless a cash buyer comes along which is unlikely at $93k/door. It can be a simple one page contract b/w you too at an agreed upon rate. I would pay I/O for 5 yrs, and then ri-fi but you HAVE to hit your pro-forma to execute this plan.

Simple trick- NOI/Cap Rate will tell you the worth. Use the actual NOI, not the pro-forma b/c that is how the property is ACTUALLY performing. Something like this, if I had to guess is an 7.5-10% CAP rate market if 50% is vacant. Don't use some compressed 5% cap rat, you'll lose money if you do. Be conservative on all aspects

Now go take over the world!

Shoot me over the details. I own and manage 30 units in Gastonia, happy to take a look

[email protected]

Please email me at [email protected]

Sent you a message.

You don't need an attorney to file the evictions in Cleveland County, but if I was going to use one I'd use Terry Pack at Horn, Pack, Brown & Dow. 

If you're ever interested in selling them, let me know. 

[email protected]

Everyone is correct, we develop multifamily and we will not close on a property until correct zoning and building permits (city/county specific) are in place otherwise we take a risk of buying land that we cannot develop what we want too.

Educate the seller on this as it can make them a lot more money if they are patient with the correct buyer. 

Developers need time to get city/county approvals. If it's someone who just wants a cow pasture, they can close quick. 

please email details to [email protected] 

Happy to take a look and underwrite this. 

thanks!

Sent you a message