All Forum Posts by: Jason Krick

What about a commercial loan? Look into a construction perm loan.

I looked at a property yesterday.  It is very..........odd.  Here's the short version.  This property was a "hotel" in the late 1800's.  The original building is the smallest part of what is there now.  Since then, people have added on, put a restaurant in the back and a store front attached.  It has become a maze.  The current owner is a contractor (electrical or mechanical I think), and had big plans to revamp it and convert it.  Currently, it is being run as an illegal boarding house with 4 paying tenants who pay for a room and share a kitchen.  Two of those units have a bathroom and two share a bathroom.  There's is a huge owners unit as well.

Back to my question.  I walked it with my contractor, saw the layout, and immediately saw how we could knock down a few walls, and a few and convert the whole thing  to 9-10 apartments.  It's a pretty big project. I'd be looking at purchasing cabinets, counters, flooring, etc for 9+ units at once.  Will Lowe's/Home Depot offer any other discounts besides the typical contractor one he gets?  Or is something like that only available to those renovating larger complexes, like 20, 50, or 100+ units?

I know you said you don't want to do it yourself, but if you take one of those orange tubes, you could wrap a week's worth ($100), in like 20 minutes.  It's only 10 rolls per week.  While annoying, I'd much rather do that than give 10%, or whatever the current rate is, to a coin counting machine.

That being said, some grocery stores may do it.  They have automatic counters and will run them through the counter and exchange it for bills.  They don't have to, so you may have to schmooze them a bit.

@Wendy Forbes

In my very, very limited research, the information that I've come across is that the sewer tie-ins can be obscenely expensive.  Like hundreds of thousands of dollars.  Also, it is said that the cost of water is the fastest rising utility price right now.  My guess is that those are the issues.  My hope, is that this building already has a sufficient size sewer line tied-in.  There is no municipal water, so provided the on-site well can handle the volume, there is no worries about that cost.  I'm also not looking at a 2000-4000 sq ft state-of-the-art facility.  Just a couple hundred square feet with a few machines for the locals.

I will say that I don't have a whole lot of hope that this deal goes through, but I owe it to myself to at least look into it and run the numbers.  The laundromat would just be a little icing on the cake, so to speak.  Not needed, or counted on, but a way to get some extra cash flow out of an otherwise dead area of the property.

I am looking at multi-unit on Monday.  What I do know is that there is a whole lot of renovation and reconfiguring needed.  There are currently 14 "rentable" units.  However, it is not zoned properly, the current owner. Is renting by the room with shared kitchens and bathrooms etc.  So I will need to knock down walls, combine into properly zoned apartments, etc. I've got a zoning variance and special exception in this township before.  That doesn't bother me, nor the scope of work, nor analyzing the numbers.

My question is in regards to the fact that there is also a store front on the property.  As of now, I'm not going to run any numbers based off of income from that unit.  It's a small town, and getting a long-term business tenant in there will be difficult.  So, I will need the deal to work with $0 income from that unit.  What I am considering is putting in a small self-service laundromat.  This is a small, rural town, and I think it is a perfect business to put in the space.  I checked zoning and it is permitted in this area.

What I'm looking for is thoughts on cost to put 6 or so commercial washers and dryers, soap dispenser, etc.  Also, how can I make it as automated as possible?  The reason I ask is that I love about 35 minutes away, and going there every morning to open up and every evening to close is not viable.  I know an option for that would be timed locks.  I've used laundromats with timers on the door.  The other issues is cleanliness, upkeep, and collecting money.  I may be able to hire someone to come in daily and clean everything on a daily basis for an hour or two, but I'm not sure how to handle emptying the machines, or refilling a change machine, etc.  That is something I'm not prepared to delegate out to someone.  Is there some kind of card system, where people could load up money/credits at a kiosk on to a card, and then swipe them at a machine?  What I'm thinking of is similar to the loadable cards at arcades and fairs.

I know I threw a lot out there, but I'd just like to see if it is a feasible option.  If not, I'd probably just use the place for storage.

@Chad Miller

My statement was a genuine question, not to come down on your thought process.  I was simply asking for clarity as to what would be different from the deal you describe as opposed to me just hiring you to do the work on my flip.  If you are the responsible for sourcing, negotiating, and getting the deal under contract, that is a different scenario.  Someone who does all of that, and then brings renovation expertise with their own team to a financial partner is a different situation than how I initially read your scenario.

What Chad Miller said was my thought. If I am bringing 100% of the financing, what can you offer that deserves a split in profits? If you charge as normal, it would appear to be a better deal for me to just hire another contractor that charges the same amount, and I keep 100%. Depending on the actual numbers, maybe you supply materials, at cost (if you can get better pricing), and pay the labor out of pocket. Then your hope is that your cut is enough to recoup your out of pocket expenses, just like the person financing hopes the sale recoups his out of pocket.

@Brice Hall

FYI--their not "My" losers.  I don't invest in this niche.

Everyone--Lets just let this thread die.  Everyone has asked the OP to specifically breakdown numbers to support his claim.  The closest he came was basically plagiarizing @Ben Leybovich, without supporting the numbers.  Then the profile picture is changed, and all info is removed from his profile.  He will never give support for his statement, with specific numbers and examples.

Let's just let this thread go off to pasture.  Whatever the OP's original intent was clearly backfired.

Originally posted by @Jason V.:

I knew by the time I got to the end of this that @Ben Leybovich would jump in! 

If he hadn't I was going to come here and tell @Brice Hall to give up the argument, because Ben does it so much better than he does (because he knows how to do math, and also because he can disagree with someone without completely pissing them off.)

Seriously Brice: you've stated you have no current RE investments - did you join BP just to convince yourself what a terrible investment RE is? Is there anyone on this site you think is smarter than you, or are you just gracing us with your vast intellect out of the goodness of your heart? 

Maybe the funniest thing about this post (and why everyone assumes you're just trolling) is because your argument completely and utterly lacks nuance. There are "$30k Houses" that are a terrible investment, and "$30k Houses" that are a fantastic investment - but you lumped them all together into one group (hence: Troll Status)

Thank you!   That is exactly why I asked someone to tag Ben earlier, as I could not.  He literally copied Ben's words, pasted them here, and gave no reason or explanation for them.  That's the issue I had.  At least give Ben the credit for the thoughts.

Whether I agree or not with the premise, at least explain your line of thought (or Ben's, on this case).