Investments
Real estate investment strategies is what really gets my juices going. Read through and contact me if any of these sound exciting to you also.
Vision Brief: To develop property investments. This can be achieved with single unit or multiple unit construction developments, or existing property remodels. I can help in design, build, permitting, project management and everything in between to help establish cash flowing residential dwellings for buy and hold strategies or alternatively, short-term sales strategies for quicker cash returns, like fix-n-flip methods.
Definitions:
Tiny Home = For our purposes we will designate any reference to a tiny home as being one built on a trailer less than 400 square feet.
ADU = ‘Accessory Dwelling Unit’, built as a secondary dwelling next to an existing primary residence. There are size restrictions within city limits, but can be larger than 400 sq ft.
ODU = ‘Optimum Dwelling Unit’, a phrase we coined to describe a perfect size, not too big, not too small for living in comfortably.
Investment Menu:
Option 1: Remodels
Option 2: Single Unit (Tiny home or ADU)
Option 3: Small scale community (Tiny home, ADU or ODU)
Option 4: Large Scale development (ODU)
Option 5: Customer Financing
Option 6: Business Financing
Option 1: Remodels
Investment Range: $5,000 – $100,000
If you have a property needing repairs and cosmetic updates then I have the contractors to make this happen and can project manage the whole ordeal for you. Fix-n-flip or keep for a buy-n-hold strategy. The choice is yours. I can also use my real estate license to help with buying and selling investment properties.
Option 2: Single Unit Investments
Investment Range: $50,000 – $100,000
If you have an existing property and want to bring in supplemental income as a rental, you can add an ADU. This can be a removable tiny home, or a permanent ADU on a foundation.
A tiny home is subject to local zoning and city restrictions like an RV, but typically a more affordable option than building a permanent structure on a foundation. It is not classed as real property and therefore does not increase property value.
An ADU sitting on a solid foundation requires architect plans, city permits and will cost more. It does however increase property value (and likely taxes), may generate a higher rental income and you may be able to build a larger footprint than a tiny home.
In both cases tiny home, or ADU, utility connections need to be established and cost factored in.
Option 3: Small scale community Investments
Investment Range: $100,000 – $500,000
In this scenario an investor can use land they already own or can partner with ADU LLC to purchase and develop land. The vision for this option is a step up from Option 1, whereby several dwelling units can be set up in a small cluster. Each unit can be offered for short- or long-term rentals individually.
Units can be fully equipped with bathrooms and kitchens or another option would be several private bedroom/living units and just one communal bathroom/kitchen. This would be a smart way to reduce construction, maintenance and cleaning costs by isolating water and sewer needs to one common area, instead of each dwelling unit having to have plumbing, bathroom fixtures and kitchen appliances. These living/bedroom units can be offered as short term rentals on AirBnB for example along the lines of ‘glamping’ a step up from traditional basic camping. Reducing cleaning costs with limited bathrooms will make a big difference to the net profit.
*Supplemental note: I personally own a property in Bastrop TX that could be utilized for a small-scale investment of bedroom units with communal bathroom/kitchen in the back part of the lot which is nicely wooded along a ravine. Looking for investment around $234,000 with 13% annualized cap rate (Estimate based on 5 units at $50/night x 20 days a month through AirBnB, for a total return of half the profit of $60,000/year to investor). I already have 2 mobile homes that get booked for AirBnB for most of every month at this location.
Option 4: Large Scale development Investments
Investment Range: $500,000 – $1,000,000+
This is where we can really take the gloves off so to speak and develop cutting edge communities that will get people talking. We really want to master plan ODU’s which foster community and human connection, take into account green spaces and step away from traditional suburb design. These developments offer number of investment choices within them:
- Develop the community and sell it outright. Retain no ownership.
- Sell lots with ODU’s. Retain no ownership. HOA establishment.
- Sell the ODU’s, but not the land. Charge lot rent. Retain land ownership.
- Rent the ODU’s. Retain land and ODU ownership.
Factors to consider with ownership retention be it partial or full, is continued maintenance and liability of properties. In the case of rentals you are responsible for all repairs of the ODU’s and the land. The beauty of option iii) by selling the ODU, but not the land and charging lot rent, is you are no longer responsible for repairs to the home, only the land, reducing exposure to maintenance costs. This scenario also leads us into…
Option 5: Customer Financing
Investment Range: $50,000 – 250,000+
Investors could also help us offer our buyers financing for a long term strategy. It may be hard to get traditional financing for buyers so this could be a great opportunity for an investor to make long term interest. If a buyer defaults then the home would be foreclosed and resold which only makes the investor more money. If the investor was part of the project from the start and has ownership of the land too, they can collect lot rent and a mortgage payment at the same time to double the monthly cash flow potential.
Option 6: Business Financing
Investment Range: Any
If an investor wants to offer our business capital to grow we can work out a loan repayment plan at an interest rate everyone is happy with. We would take this investment and develop our own communities or tiny homes for sale depending on the size of investment.