Rep Retirement Lodge 140: The Brave Days of Old

[Beer Pong Horn]

Re: Rep Retirement Lodge 140: The Brave Days of Old

How sure can you be of cash flow? Even in a best case, you've locked yourself up in golden handcuffs until you unload (or payoff the loan outright) the property because you would effectively be taking on a second mortgage payment that you'd have to feed for the next however many years.
Might just be my conservative nature, but I'm not going to borrow money to speculation in a real estate investment scheme.

Understandable - I'm not going to either, even if I had the wherewithal. Though it isn't a sure bet, it does seem like a safe bet with the agricultural income and the fact that the city wants to see it developed.

There is built in cash flow, since there is agricultural land included. 45 acres would bring you about $16,000/year in rent, which would help offset some of the expenses. Its like a mortgage, if you rent out half of the house to offset some of the mortgage.

How much would property taxes run? Also, are any of the other acres under a conservation easement or something to bring in extra income?

Oh... wait. You weren't going to get into it on the board.

 

[bigblue_dl]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Mulled it over, don't quite have enough liquidity yet.

Would there be a down payment needed, or could I put it all on a note? I'd have to pretty much sell my life and raid my TSP to get a down payment, and then take out a loan for the rest, which is no guarantee considering I just bought a condo.

If I went, I'd probably bring in a third guy I know who's pretty flush with cash at the moment. This sort of thing is right up his alley.

This is sorta the same boat I'm in. I really want to do it, but I don't think I could pull it off without taking some pretty huge risks. If it was 5 years down the road, I'd be much more likely to be able to pull it off.

 

[Almington]

There is built in cash flow, since there is agricultural land included. 45 acres would bring you about $16,000/year in rent, which would help offset some of the expenses. Its like a mortgage, if you rent out half of the house to offset some of the mortgage.

You would still be looking at $2500/month to cover a loan for the full amount. Assuming that the rent covers the property taxes and leaves you $1000/month, you still would need to feed the loan $1500/month. Which would crimp your cash flow and put you at risk of losing everything in the case of a job loss or other loss of income. I wouldn't go into it with partners either because then you are dependent on their life situation. While I agree that someone is going to make someone a pile of money, you can't let greed mask the risk or it may bit you in the ***.

 

[Patman]

Re: Rep Retirement Lodge 140: The Brave Days of Old

The dangers of becoming over-leveraged (and having a cash-flow crunch). I'd do it only if I had the 500k sitting in the bank, even then I'd counter-offer the city 400k. I'd be very hesitant going into it with someone else, and would never even consider it if they had to borrow the money.

yeah, that's one hell of a loan to take out... even if your rent is a couple of shiny quarters.

 

[MissThundercat]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Why is it 60F? I have all this stuff I have to chill- turkey stock. Kielbasa soup, mushroom soup, turkey soup. My fridge is not big enough. Last week we were freezing part way into the day. I need some of that now!!

It's nature's way of tormenting you.

Bring on the snow.

 

[gmann]

I have an investment opportunity, and I need someone to go 50/50 with me. It is a no-brainer, and its real estate. $500k total, so ~$250k each. You should be able to get 10x that in 10-15 years. I would do it myself, but I can't swing $500k myself right now, and I'm not even sure if the $250k is feasible. Anyone interested? (I want to keep the details off the board, but I mentioned it to Brent on Saturday, he can confirm that its a pretty good opportunity)

My .02 worth.

Might be a good opportunity if you can cash flow it and realizing that the real estate market is going to be soft for quite some time. You would need to have a global debt service coverage of 1.20x at a bare minimum. Plus, banks these days are going to look at the borrowers liquidity. A solid guarantor would be very beneficial. Google the "5 C's of credit". Banks want to lend money but they also need to make sure the structure of deals is rock solid or the deals has "belts and suspenders".

If you can look into ag financing then that is an entirely different game with new pros and cons.

To make matters more complicated if different investors are involved then an LLC or corporation should be formed and attorneys should be consulted to CYA.

With all that being stated rates are at historic lows and depending on this situation and the bank involved they might be willing to take a hit to get it off their books....

 

[Patman]

Re: Rep Retirement Lodge 140: The Brave Days of Old

the other thing to be careful about is that there does appear that there's a good chance of the markets going plaid again in 3 months... uncertainty climbs through the roof.

 

[The Rube]

Re: Rep Retirement Lodge 140: The Brave Days of Old

I saw the land on googlemaps, and IMO, it's prime for developing. The surrounding developed areas (and what developments are there) make it that way. Basically, all you'd have to do is wait until some other developer wants to buy it, which one will do at some point. It's inevitable that a developer will want that land. It's just a matter of sooner or later.

 

[Beer Pong Horn]

Re: Rep Retirement Lodge 140: The Brave Days of Old

I saw the land on googlemaps, and IMO, it's prime for developing. The surrounding developed areas (and what developments are there) make it that way. Basically, all you'd have to do is wait until some other developer wants to buy it, which one will do at some point. It's inevitable that a developer will want that land. It's just a matter of sooner or later.

As long as you're not stuck being the developer. Last thing I'd want to do is try to be general contractor.

Though, that could have some benefits, like zoning for a Lodge clubhouse with * hockey and happyhockey tables, AND a Hottie corner!

 

[Hammer]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Why are we relegating the hotties to the corner?

 

[gmann]

I saw the land on googlemaps, and IMO, it's prime for developing. The surrounding developed areas (and what developments are there) make it that way. Basically, all you'd have to do is wait until some other developer wants to buy it, which one will do at some point. It's inevitable that a developer will want that land. It's just a matter of sooner or later.

No offense Brent (and I also don't know the property in question) but I can name about a dozen "prime" pieces of real estate that banks have priced to sell and not much is moving. These properties cover the full range of the spectrum in size and price and potential from the north metro to Walker.

I know of piece of property that is 35 acres. 500 feet of frontage on a top tier lake and the only building on it is a newly built garage. The property sold 7 years ago for $1.5 million. A bank has had it listed for $355,000 for over a year and has only fielded a few inquiries.

Crazy times.

 

[goldy_331]

Re: Rep Retirement Lodge 140: The Brave Days of Old

But it's a really neat bridge!!!!!

 

[melmac]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Morning Lodge
I saw Mel on TV during the Friday night Gophers vs. MSU game

I heard that rumor, too. And standing next to me, looking ever so dashing in a gold jersey, was my darling husband.

Greetings, Lodge!

I'm back at my mom's after spending a week and a half-ish in Ohio/Michigan.

Good news, everyone! I have a job! Well... Pending a background check. Plus, I've got rec bouncyball scorekeeping.

Now, we just need to find the hubby a job...

 

[FadeToBlack&Gold]

Re: Rep Retirement Lodge 140: The Brave Days of Old

And standing next to me, looking ever so dashing in a gold jersey, was my darling husband.

He'd better watch it. He's d@mn close to being shunned by the Techies for that crap.

Are you back in MN permanently?

 

[Beer Pong Horn]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Why are we relegating the hotties to the corner?

Good point, but I figured it'd be gauche to tell them that the "corner" would be in the middle of a room on a stage


Also, re: F2B&G's question to mel - what he said. Done with Ohio?

 

[melmac]

Re: Rep Retirement Lodge 140: The Brave Days of Old

I'm here for an indefinite period of time.
The job is through Pro Staff, so if it's not a good fit, I can find something else.
We're working on getting back here for good. I'm making the first steps.

And he will cheer with me when a common good can be gained. No one really likes State anyway.

 

[bigmrg74]

How sure can you be of cash flow? Even in a best case, you've locked yourself up in golden handcuffs until you unload (or payoff the loan outright) the property because you would effectively be taking on a second mortgage payment that you'd have to feed for the next however many years.
Might just be my conservative nature, but I'm not going to borrow money to speculation in a real estate investment scheme.

Another angle bb_dl might want to look into just how much harvestable timber is on the land. He said it was a hundred acres with 45 of that tillable. So I would have to assume that at least most of that is woods. Especially if it's promising for being developed. A talk to the right timber man might be able to be able to get enough timber out of it to basically pay for the loan and taxes itself. Plus, some selective timber harvesting might make the land more enticing to a real estate developer who wouldn't have to go thru the problem of clearing the land. And with the woods more open, they might like the idea of saving a few of the trees to make the development feel older, more natural, or whatever marketing tag they wanna slap on it.

 

[The Rube]

Re: Rep Retirement Lodge 140: The Brave Days of Old

No offense Brent (and I also don't know the property in question) but I can name about a dozen "prime" pieces of real estate that banks have priced to sell and not much is moving. These properties cover the full range of the spectrum in size and price and potential from the north metro to Walker.

I know of piece of property that is 35 acres. 500 feet of frontage on a top tier lake and the only building on it is a newly built garage. The property sold 7 years ago for $1.5 million. A bank has had it listed for $355,000 for over a year and has only fielded a few inquiries.

Crazy times.

Oh, it wouldn't be a quick-flip at all. I know that. I'm just saying that eventually (and I highly doubt it would be 10-15 years from now) some developer is going to want that land. Right now, the market is over-correcting itself, because no one wants to take any risk. They all want the sure thing. Well, the sure things will eventually get over-priced, and then we swing back the other way.

Example: housing. Houses are dirt cheap and rentals are rising in price, and are starting to lack vacancies. During the housing boom, you could throw 5 darts and hit 5 apt complexes offering 1-2 months' free rent if you signed a 1-year lease. Don't really find that now, because the apts know they can fill the empty apts. Why? No one wants to/can buy a house right now because of this recession. Soon, rentals prices will make it so buying a house is more practical/affordable. It happens.

 

[bigblue_dl]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Another angle bb_dl might want to look into just how much harvestable timber is on the land. He said it was a hundred acres with 45 of that tillable. So I would have to assume that at least most of that is woods. Especially if it's promising for being developed. A talk to the right timber man might be able to be able to get enough timber out of it to basically pay for the loan and taxes itself. Plus, some selective timber harvesting might make the land more enticing to a real estate developer who wouldn't have to go thru the problem of clearing the land. And with the woods more open, they might like the idea of saving a few of the trees to make the development feel older, more natural, or whatever marketing tag they wanna slap on it.

$500k+ in timber? Are you ****ing high?

 

[Beer Pong Horn]

Re: Rep Retirement Lodge 140: The Brave Days of Old

Another angle bb_dl might want to look into just how much harvestable timber is on the land. He said it was a hundred acres with 45 of that tillable. So I would have to assume that at least most of that is woods. Especially if it's promising for being developed. A talk to the right timber man might be able to be able to get enough timber out of it to basically pay for the loan and taxes itself. Plus, some selective timber harvesting might make the land more enticing to a real estate developer who wouldn't have to go thru the problem of clearing the land. And with the woods more open, they might like the idea of saving a few of the trees to make the development feel older, more natural, or whatever marketing tag they wanna slap on it.

Hm. I'd doubt there's that much heavily wooded area, based on what I know of where his town is, and not much high-quality marketable lumber in what is there. What is done with that other part of the property, bbdl?

EDIT: LOL at bbdl's response. Unless the price of aspen suddenly skyrockets.