All Forum Posts by: William Jenkins

Agree with @Jay Hinrichs on looking at the tax implications on the net $800k.  That is going to dictate how necessary a 1031 really is in terms of preserving capital.   

My suggestion.... If a 1031 is not necessary then I would suggest slowly (seek deals) dispersing it across properties and asset classes.  There is no need to max lever up and go into a large overpriced multi....  Buy some smaller properties (smaller multi, 4-families, or commercial), pick up some REITs, buy some equities, etc.  If the 800k is the bulk of your net worth, I would not suggest going "all in" on one property especially if you are not experienced in that asset class.

If a 1031 is necessary then I would start seeking out those properties now.  I would avoid getting highly levered in this market.  

General notes and my opinion on a 1031.... Its is always great to save on taxes, but you need to balance that tax deferment with you ability to patiently seek out quality deals.  I have seen many people foam at the mouth to get into overpriced 1031 to save a little bit on taxes.  Que the 1031 guys to start hating on me for that comment.      

Larry, all I can say is that if you go down the variance path, you will likely have a reasonable amount of professional fees that you will have to pay (survey, elevations, application fees, etc.).  That will not guarantee you a approval, and you could be out those costs.  You can likely avoid the cost of an attorney and should be able to represent yourself prose.  An attorney is always an option if you want to press the issue.  

I don't think you have anything to lose by meeting with the City.  I've done work in that area of the Country, and I know what you are talking about in terms of dealing with government there.  Perhaps you can become one of the insiders.    

Assuming the lot is in an area that makes development economically viable (can you really build a house and rent for a good ROI???), you should first go sit down with the City and see exactly what the issue is with building a house. I would bet $100 that it is because of the lot shape and your inability to meet the required building setbacks.

If that is the case, there should be an ability for you to apply for what is called a "setback varaince."  For a variance you typically have to prove a hardship and that the unique features of your property (topography, shape, etc.) prohibit you from using your property (i.e. can't build anything on it).  These are typically public hearings before the Board of Adjustment (may go by another name in your area), or City Council.  I have obtained quite a few over the years... Some jurisdictions are tougher than others.

It is worth a shot if the payoff is there on the development side.       
    

1.  I would not worry about health issues from the tower...  I could go into an entire explanation of the physics involved, but bottom line is that you are getting more electromagnetic radiation from your phone, than you actually are from the tower servicing it.  Neither is an issue however.  

2.  You typically have very little chance of soliciting a carrier to locate on a specific property.  The process works the other way around in 99.9999% of cases.  

3.  If a carrier/tower company ever does approach you, make a deal.  Be a smart negotiator, but the cell revenue is icing on the cake.  

I would go Iowa all the way.  I'm not sure what market you are in, but assuming it is a smaller one (i.e. not Des Moines) you have an opportunity to be a big fish in a small pond.

My grandmother did that in a smaller Midwest town (began 70 years ago) and it worked out very well for her financially and in terms of lifestyle.  

First a time share is not an investment.  From that perspective it is a HORRIBLE DEAL.  

If your friend truly wants a timeshare for personal enjoyment, then I would suggest buying any RCI points unit in the secondary market.  Many people are giving these away for almost nothing just so they don't have to pay maintenance fees.  Once in the points system you can trade into these units or buy them with cash for the week.  And yea.... he/she is not truly getting $700k in value for $100k.  Its scam.  

Just my opinion and some will disagree.  Do not pay for a mentor!!! 

Go find a seasoned professional in your desired niche.  Demonstraite your desire to learn that nich and see if you can get some of their time.  During your meeting see what you can do for THEM and not what they can do for you.  See if you can get a feel for what they look for in deals and try to bring them those deals.  Eventually you will land upon something they are interested in and perhaps you can get a small piece of the deal then.  In the mean time you will get feedback and knowledge on that niche.  You will also have a number to call when you need general real estate advice.

Successful people are always looking to expand their network of deal finders.      

@Mike Halim - If the owner does not know, the only way to find out would be to pull title and look for the SNDA (Subordinated Non Disturbance Agreement) that was recorded on title.  From there you may be able to track down the company that has it.  There are many different ways these deals are structured so I would try to get a copy of the agreement to see if the revenue ever reverts back to you as the owner. It is a long shot, but worth looking at.  

@Jonathan Farber - The carriers hold all the cards on where the sites are needed and they distribute the locations to strategic partners that build the towers and lease them back.  These build lease back agreements are very favorable to the carriers and the margin is not all that good (unless you luck out and get a 2nd or 3rd carrier).  The other way is by cherry picking locations where they could be needed (areas of high growth, difficult zoning, past attempted locations, etc.).  This is not easy to do and requires industry knowledge, but it is more profitable in general.  

I am in the cell tower game.  There are two ways to play.  

1.  Own the actual tower itself.  This is the most lucurative, but its not really for home gamers or mom & pop investors.  A tower can be built for $100-$200k.  Major carrier lease rates can be $2k-6k per month.  You can have many carriers on your tower but you are limited to the carriers that operate in your market.  Most markets in the US have 4-5 carriers.  Just because they are in your market however does not mean that that specific location works for them.  There are many 1 carrier towers, and quite a few that are 0 carrier towers as well.  Don't ever build a tower without a committed tenant...... You really have to be in the industry with connections to the carriers to put one of these deals together.  

2.  Own the ground/building with a tower/cell site on it and collect the lease revenue.  Carriers and tower companies will approach you if you have a good location.  Unless you are in the business it is almost useless to try to seek out a carrier or tower company to build on your property.  If you are lucky enough to get that call, sign a lease, and the tower is built.... it becomes the easiest mailbox money you will ever earn.  You can also sell your lease via easement to buyers like me for a lump sum payout.

The quick answer to your question is NO....

Perfect example..... St. Louis, MO - North City

The area was developed in the early 1900's.  Around the 70's (possibly earlier) things started to go downhill.  80's were terrible.  90's into the 2000's were horrendous.  Extremely high crime, burned out buldings, crack houses, shootings.... good luck getting cops to respond. Its a third world country 15 miles from where I sit now.

Lets say you bought in this area in in the 70s, 80's, or even 90's with the mentality that you are going in with.  That is 40-50 years where property values have steadily decreased to ~$0.  Housing in that area has gotten so low, that the cost of a new roof or HVAC is more than the entire house is worth.  Ever heard "land is always worth something"...... Yea... not here.  Many lots were abandoned and taken back by the City for nonpayment of taxes.  Tax lien investors didn't even want them for minimal tax amounts... Worthless.  There is some percalating activity now (mainly a new $2B national geospacial agency development that is being built over all of those City owned lots) but things are still extremely depressed.

If you would have bought 1000 of these houses in the 80's your kids would not be swimming in piles of cash.  They would be dodging bullets (litterally).