All Forum Posts by: Brad James

One of our reasons for looking more into developing is because finding residential real state at 70-80% of FMV is next to impossible. I have several strategies in place and have shopped in my spare time for years. However, I have found if they are cheap, there IS a reason and they are marketed for what they are really worth.

If a realtor has it listed, forget about it. Already over priced. The last call I had was from a builder that said he had a "deal" for me. new home that appraises at 850K, he will sell for 810K. I said, have a good one...I have also dropped off a ton of letters to potential properties with not one return call.

So I was just curious if you guys are using word of mouth, listing an ad in the paper, calling on homes in the paper, using a realtor for what?

Also, is there a best type of deal to look for like tax foreclosure, govt auction, REO, etc?

Yes, you can deduct ANY and everything that went into the home for repairs and what not. As long as the bottom line does not show a gain, you will pay no gains tax for that.

I apologize for seeming arrogant in returns on this deal. Without going over every detail, we know what land sells for in our area. We know this by simply asking home owners and seeing what it is listed at. We know if we can buy ag property and rezone, we can get the land MUCH cheaper. We also do not plan to buy at FMV but rather a minimum of 80% of FMV so as to create a buffer of protection in the deal. Land around us is being bought up at an ALARMING rate and pricing is near insane. I would LOVE to do a municipal residential development but the dollars, time, and experience are required.

I guess our reason for working outside the city limits is to reduce our obligations as the developer. IE, paved roads, sewer, water, etc. People in this area area also looking for large lot areas at the edge of town. Hell, that is how I was pulled into this deal. We needed land for our business, now we are looking at things differently. I have studied the market in our area for close to 10 yrs now and we do not experience the fluctuations of some other areas of the US.

EDIT I just realized I did not put much info in about what I am doing. I posted also in the development area so I hope you can piece this together that I am looking at a rural development outside of the big city.

Thanks for the reply. I guess one of the major questions to be answered is how a typical private lender might structure a deal? My thoughts are this, present a 20% APR return on investment capital used. Payments dispersed either in lump sum or annual as new development sells off. Investor is paid first. Honestly, there is hardly any way to lose money in what I am doing.

The guy I am looking to work with is a national icon in the entrepreneurial world and knows what risk is. Even if he bounced back with a 50% return or profit split, it would still be a lucrative deal for both of us. Projected 300% + ROI over 2 yrs.

Regarding retained earnings, my CPA is next door and I will be talking to him on other business next week so I will see what we can do. There has to be a way and I thought the S corp had ability to retain earnings in certain situations since it is deemed operating capital for investing. I do want to dump it right back into real estate, I am not talking about pocketing the cash. I am just looking for a way to roll over the income as capital to another fiscal year.

We are venturing into real estate this year and potentially with a personal investor with 12 figures. If that deal falls through, I will have to find a way to finance my goals. We recently started an aerospace mfg business from a residential property for now that is already making money but took me walking away from employment to do it. I now sit on a 740 credit score and NO claiming income right now. I have been pumping up the credit card limits to fund a small investment/flip but the bigger developments we need to be in will require low 9 figures.

So is there a way to fund my projects without private investors? If I use private investing, what can I expect to pay for the money? Terms?

Also, I will need to form a corp for this so I can retain earnings in the business without giving it to uncle sam. Is the LLC the best way to go? why? and what kind of fees can I expect to pay? Is there a back door way to get this done? The only reason I want to form the corp is to retain my capital for future investing unlike a S.P. that requires all income be claimed or deducted per fiscal year.

We are venturing into real estate this year and potentially with a personal investor with 12 figures. If that deal falls through, I will have to find a way to finance my goals. We recently started an aerospace mfg business from a residential property for now that is already making money but took me walking away from employment to do it. I now sit on a 740 credit score and NO claiming income right now. I have been pumping up the credit card limits to fund a small investment/flip but the bigger developments we need to be in will require low 9 figures.

So is there a way to fund my projects without private investors? If I use private investing, what can I expect to pay for the money? Terms?

Also, I will need to form a corp for this so I can retain earnings in the business without giving it to uncle sam. Is the LLC the best way to go? why? and what kind of fees can I expect to pay? Is there a back door way to get this done? The only reason I want to form the corp is to retain my capital for future investing unlike a S.P. that requires all income be claimed or deducted per fiscal year.

We will be rezoning some ag land to single family over a spread of about 200 acres into 2-4 acre lots. This will be outside a city where municipal sewer and water are not available and will be the responsibility of the lot buyer. Can anyone offer some tips or price range to get something like this done? We will likely design most of this and produce a very close map for the surveyor to follow. Really wondering how tough this is to get pushed through and how much it will cost.