All Forum Posts by: Zac Gavin

Thanks @Ronald Rohde. He talked with his CPA today to start putting things together with the properties and the company assets. Hopefully we'll see back on that in the next couple days. The discussion so far is that we would have his lawyer put this deal in his trust. I'm not savvy on how that works, so I have some studying to do there. 

@Theo Hicks, once he gets his information back from his CPA, I intend on laying everything on the table so that I can determine those facts. As of now, the idea is that I will be buying a turn-key blacksmith business. Properties, tools, material, etc. Of course I can't make any actual decisions on exactly what I plan to do until I see how his business is performing on the books. But assuming it's a profiting business that allows me to survive, my priority would be to do some much needed rehab on the properties. The long term idea is similar to what he and I are working on now. Sell the business and/or its assets, then rent the properties out.

Which leads to a question, maybe best suited for a different forum (if so, maybe someone can point me in the right direction). I'm curious to find out if it might be financially beneficial to buy out the company and its assets via my metalsmithing business, then with a separate entity like an LLC, buy the properties. With the end result being that my metalsmithing business would rent the properties from my LLC. Any ideas on whether that would be a good move or if I should just buy it all under one business.

 A small update: He told me today that he has a $7,000 line of credit against the properties, but it is otherwise free and clear. I'm assuming he would need to pay that off before I should make any moves on purchasing.

@David Cruice, duly noted. I'll keep future posts a little more on the light side. Still new to the forum world.

I understand that the whole thing is at a stand still until there are legitimate numbers. The deal lies in the numbers afterall. I do like the idea of getting a BPO.

I guess, that's really where the big question is. Where can I start on my end to be prepared for him when he comes back with his numbers? A BPO is a good start I think. I'll start my research there.

Thanks David!

@Damon Pendleton Along with the real estate, I will be buying his business and absorbing it into my business. So that's the idea as far as income/rent goes so far. I can't give specifics on numbers yet, as he's only just now getting ready to talk with his CPA to figure out real numbers. As for your question about working to death, up until recently, he had only planned to bring in the auctioneers and get whatever he could out of everything. But until his health began to decline even more, that was always "eventually". He never really thought about the "when" until we started talking about my future plans. Now he's seeing it as an opportunity to retire and get a better deal than his original plans. I hope that sort of clarifies it. I guess to be more clear on the property itself (aside from numbers), these buildings are built for metalworking. I'm sure someone could come along and modify them, but as they are, there's not a big market for metalwork as it is, and few metalworking businesses in my area. Don't get me wrong, I'm sure he could find someone who would be willing to figure something out with them. Honestly I don't think he's put much thought into it until now. And if we determine that it's not the right deal for me, I'll undoubtedly help him look at better options than auction.

@Mason Clark Thank you for the advice, Mason! You have a great point with trust. I do intend on having the properties inspected to help determine value. Talking to a commercial agent would probably be the wise choice, being that my level of knowledge in analyzing deals is about as good as my woodworking skills (I know how to put nails in it). In the end I want to get a good deal, but I want to give him an avenue toward retirement so that he can be with his family during all his health troubles. So definitely something that is mutually beneficial. I will continue with details as they come. Again, I appreciate your advice!

So here I am, just a lowly metalsmith, hammering away at the anvil and feverishly listening to the Bigger Pockets Podcast (as metalsmiths do). I was introduced to BP only a couple months ago and figured I'd get familiarized with real estate via the podcast before I made any crazy decisions - like buying every house on my street so that I could tell people that I (almost literally) own the block...

Well as I have been learning about real estate, I've been working on narrowing down on what niche I want to get involved in. And to be honest, Commercial real estate was right smack at the bottom of the list... For no other reason than it doesn't make sense to me. And as we all know, things that don't make sense are bad and we should never make any attempt at understanding them... All jokes aside, Commercial just seemed to be way over my head so I figured I'd hold off until I understood more.

Did I mention that I'm a metalsmith? I make things with metal. That's my expertise. But I've been learning real estate because I want to retire some day. Because being 66 years old with stage 4 lymphoma and not having the option to stay home because cancer sucks just doesn't seem like a great life-exit-strategy... I'm not 66, of course (I'm 26 and beautiful). Nor do I have stage 4 lymphoma. That trophy goes to my mentor. A great man who dedicated his life to his work and has found himself stuck in his very own creation, with little opportunity to get out besides working to death.

Until recently, that is. As I was describing my dreams of owning my own metalsmithing business and real estate business, as well as running for President of the United States (2028. Watch out world). It was during this conversation that led to the topic of buying his business from him... I know, talk about escalating quickly...

Well after some lengthy conversation, discussing roughly estimated numbers, we got to the real estate part of it. Three buildings, two properties. I don't know the specifics on them just yet, as that information is still unfolding (rougly 5,000sqft each). He gave me a shot in the dark price of about $1.1m to $1.2m. 

Now, why on earth would I drag you through all that back story, when I don't even have any meat to give you about the deal? Well because I don't even know where to start (look back to paragraph 2). That and I just really like writing stories. With that out of the way, I'll get to the point. My mentor, aka the seller, would prefer to sell the properties via Owner Finance. I have read and heard on the BP podcast that many investors prefer Owner Finance deals, but I don't know how that translates to commercial property. One benefit I am aware of is that I don't need to worry my pretty little head about adjustable mortgage rates. But I don't know really anything beyond that.

TLDR; Is buying commercial real estate through Owner Financing better than finding a Commercial loan? Also, what factors should I look at when buying commercial property?

**Side note** One day I am certain I will look back at this post through my fingers as I apply my palm to my face. One day.

@Dmitriy Fomichenko Thank you for the links! I've finished the Ultimate Beginners Guide. I just finished the Guide on Buying Duplexes. Now I'm looking through the forums on finding good deals and learning the numbers. If you know of any off the top of your head, please throw them my way!

@Trexie E. Thank you, Trexie! I'll certainly be asking many o' questions here on BP. So much to learn...

@Andrea Proeber Thank you, Andrea! I haven't gotten into anything just yet. I'm still trying to understand the process. Right now I'm really focusing on learning how to do the numbers. I know BP has all these fancy calculators, but I'd like to know how the calculator is coming up with the answers... If you have any tips or if you can point me to some good posts in the forums, I'd greatly appreciate it!

Hello, Bigger Pockets folks!

My name is Zac Gavin. I come from Utah, where I spent my childhood. I served 4 years in the US Army, and afterwards, relocated to Ocala, Florida in 2014.

I've always been searching for a way to get ahead in life, something more than living paycheck to paycheck. From network marketing (MLM) to selling odds and ends. Back in 2012, I read the book (the world famous) Rich Dad Poor Dad by Robert Kiyosaki. This book gave me a perspective on real estate I had never considered. I can't remember exactly what it was, but something about that book gave me the idea that apartment complexes/multifamily homes are the ultimate form of passive income. Truth is, I don't even remember if that was mentioned in the book (maybe I should read that again...). All I know is that something about it made me realize the potential of real estate.

So, with that epiphany, I did ABSOLUTELY NOTHING about it until a couple months ago when a friend of mine introduced me to Bigger Pockets. Ever since, I've been listening to the Bigger Pockets podcast and learning everything Josh Dorkin and Brandon Turner have been trying to cram in my noggin (for 130 episodes) so here I am.. doing what Josh is always telling people to do (so demanding, Josh) and introducing myself. Zac Gavin. The n00b.

With that,

Hello everyone.