Funding the Gap

There are several reasons why a fix-n-flip investor might want to secure a fast loan to cover a gap. A gap loan, as the name implies, is a loan that bridges a span of time. It helps you gain control of a property quickly even if you are still scrambling to get all your paperwork done for a full rehabilitation loan.

A Buyer in a Hurry
At some time or other, you might face a seller in a hurry. One situation that puts a seller in a hurry is foreclosure. Many property owners in this situation are in denial so they wait until the last week or so, or even days, before the foreclosure sale to act on saving their credit. To save their credit, they must pay the bank all they owe on the mortgage right now. The house might actually be worth much more than what they owe if they have been paying on the loan a long time or put a large payment down on it. But, a foreclosure on their record will ruin their credit. So, for them, it is better to sell at a discount and survive to buy another house another day.

In this scenario, an owner in foreclosure has agreed to sell the property to you at a steep discount, but they need to close the deal quickly. You, the investor, want to buy this property and you make an offer. However, the competition is extremely stiff, and another investor is sitting in the wings waiting to obtain the property. Your offer locks up control of the property temporarily. You need to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days.

A Nonrefundable Deposit

Another reason you might need funding in a hurry is that you have stumbled upon a wholesale purchase with a tight deadline to close, perhaps 2 to 5 days. The property is ideal for your purposes and you want to make an offer. However, if you don’t get the deal closed by the deadline, you will lose the nonrefundable deposit you are required to put down and control of the property you are seeking.

mind_the_gap

Getting Control of the Property

Here is where obtaining a gap loan is useful. A gap loan allows you to purchase the property as is while you are in the process of obtaining a rehab loan. The gap loan can be secured in 2 to 3 days typically. Your strategy is to obtain control of the property through this gap loan, begin paperwork to refinance the loan immediately and eventually complete the rehab and offer the property for sale.

REI Capital Resources has funds available for fix-n-flip loans with terms up to 6 to 9 months with a minimum of 3 months.

Fix-n-Flip Option 2

E-mail or call for more information on minimum and maximum loan amounts, interest rates, terms, and fees for specific project. I can help you with first liens only and these loans are limited to the Austin, DFW, Houston, and San Antonio Metro areas.

Pat St.Cin

Patrick@reicapital.cash

512-213-2271

Austin, Texas

reposted

Numbers: Prices, Percentages, Points

Despite the volatility of the stock markets and the Texas weather, no matter if it is raining, blowing, or baking, even if I have to walk uphill both coming and going, in a “snownado,” I am here to help you find ways to put your money and your time to good use making more money in big or small, short-term or long term, real estate investment adventures.

I have several loan programs to offer.

 

 

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Patrick@reicapital.cash

512-213-2271

 

 

 

 

 

 

In-a-Hurry Loan to Cover the Gap

There are several reasons why a fix-n-flip investor might want to secure a fast loan to cover a gap. A gap loan, as the name implies, is a loan that bridges a span of time. It helps you gain control of a property quickly even if you are still scrambling to get all your paperwork done for a full rehabilitation loan.

A Buyer in a Hurry
At some time or other, you might face a seller in a hurry. One situation that puts a seller in a hurry is foreclosure. Many property owners in this situation are in denial so they wait until the last week or so, or even days, before the foreclosure sale to act on saving their credit. To save their credit, they must pay the bank all they owe on the mortgage right now. The house might actually be worth much more than what they owe if they have been paying on the loan a long time or put a large payment down on it. But, a foreclosure on their record will ruin their credit. So, for them, it is better to sell at a discount and survive to buy another house another day.

In this scenario, an owner in foreclosure has agreed to sell the property to you at a steep discount, but they need to close the deal quickly. You, the investor, want to buy this property and you make an offer. However, the competition is extremely stiff, and another investor is sitting in the wings waiting to obtain the property. Your offer locks up control of the property temporarily. You need to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days.

A Nonrefundable Deposit

Another reason you might need funding in a hurry is that you have stumbled upon a wholesale purchase with a tight deadline to close, perhaps 2 to 5 days. The property is ideal for your purposes and you want to make an offer. However, if you don’t get the deal closed by the deadline, you will lose the nonrefundable deposit you are required to put down and control of the property you are seeking.

 

mind_the_gap

Getting Control of the Property

Here is where obtaining a gap loan is useful. A gap loan allows you to purchase the property as is while you are in the process of obtaining a rehab loan. The gap loan can be secured in 2 to 3 days typically. Your strategy is to obtain control of the property through this gap loan, begin paperwork to refinance the loan immediately and eventually complete the rehab and offer the property for sale.

REI Capital Resources has funds available for fix-n-flip loans with terms up to 6 to 9 months with a minimum of 3 months.

Fix-n-Flip Option 2

E-mail or call for more information on minimum and maximum loan amounts, interest rates, terms, and fees for specific project. I can help you with first liens only and these loans are limited to the Austin, DFW, Houston, and San Antonio Metro areas.

Pat St.Cin

Patrick@reicapital.cash

512-213-2271

Austin, Texas

Beautiful Fort Worth House in the News

The home of LeAnn Behrens and David Montague in Fort Worth’s Park Hill neighborhood appears in the Wall Street Journal (wsj) three times, in film, in article, and in photos. I enjoyed all three mediums. The film was made by Rob Alcaraz. The article written by Alina Dizik, and the photos taken by Casey Woods Maddeaux.

Rebuilding After a Fire

David and LeeAnn completed their home in 2017 to replace the one that was lost in a fire when the fire in an outside grill on the deck spread to the house. This house is on the site of the old house. Out of this tragedy, the couple started from a clean slate, with the help of architect Michael Bennett, to build a home where they could display their collections and live and entertain.

A Video Tour

In the video, David leads viewers on a tour of the home from the front door with a welcoming, “Hello I’m David, welcome to our house,” as he opens the front door. The house he describes as a perfect combination for them, combines living areas, art galleries, a library, and museum in 6,000 square feet with 4 bathrooms and plenty of areas to entertain in.

David shows viewers some of the artwork displayed in the house, his collection of books, and some of the building techniques they used on the back deck, like the burned wood siding, a technique he says is from Japan. The burned wood is proper because it reminds them that the original house that stood there burned down. Also, inspired by their survival of the file are the designed-in multiple decks and multiple ways to get out of the house.

exemple_shou-sugi-ban.jpg

“It Makes Sense to Us”

The art and books are all things David and LeeAnn like and have purchased. “It makes sense to us, even if it may not to anyone else,” says David when pointing out some of the art that is paired with one another in the living room. The central gallery space includes more than 20 masks and two Day of the Dead-themed portraits by multimedia artist Dolan Geiman along with a commanding bird sculpture from Africa. Photos of the house can be found at
https://www.wsj.com/articles/a-fort-worth-home-built-around-a-couples-collections/

4,000 Books

Did I mention already that David Montague collects books? His collection of 4,000 books had to be rebuilt from scratch after the fire. The two-story library in his new home includes a fire place with a white plaster representation of the Continental Divide by a local artist and comfortable places to read. In the film tour, David explains that he is collecting some of the original works about the fur trade written by the original mountain men and how that inspired the Continental Divide plaster relief that extends from the first floor of the library to the second floor.

Some of the other interesting features of the house are glass walkways in the upper floor to foster a sense of connections throughout the home, a second-floor coffee bar outside the couple’s master bedroom that opens up to a second floor living room that overlooks the pool in the backyard.

A Red Stove & Day of the Dead Portraits

The pieces that really caught my eye were the red Bertazonni range that gives color to the modern grey-toned kitchen, the 4,000 books (did I say that already?), the two Day of the Dead portraits in the entry hall, and the African Ship sculpture in the living room that is just calling out to be touched.

Okay to Touch

The home does not have a “no touch” policy according to David like a museum would. David says that the art is “pretty much indestructible—they were built for a tribal setting.” As a tactile explorer myself, I am happy to hear that.

Take a look at this beautiful Texas home on the media you like best, or like me, watch, read, and view all three.

This rebuild was way more radical than a standard fix-n-flip, but don’t forget that you too can make a comfortable beautiful home out of a house, one that will hold and display your or your buyer’s treasures. I’m always on the look out for ways to make a fix and flip house stand out.

Let me know if I can be of help to you this month. I can be reached at

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

References:

Dizik, Alina, 2019, A Texas Home That’s Part Library, Part Gallery, wsj

Maddeaux, Casy Woods, 2019, A Fort Worth home Built Around a Couple’s Collections, wsj photo article.

Alcaraz, Rob, 2019, A Home Built to Be a Live-In Museum and Expansive library, wsj video

Photo credit: Caroistda [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)%5D

 

 

A Town with a Trail

Fort Worth

A good real estate property hunter follows the flow of people. And, like the birds that love the water, people too are flocking to the rivers and bayous of Texas. As they follow the new jobs and other opportunities opening up in Texas, they are especially drawn to the waterways and trails that offer walking, biking, boating, and horseback riding. I think of trails as places of freedom, where one can move about, rehabilitate, breathe fresh air, see new things, and even talk with a cousin as you walk along.

Young professionals and families who have lived in the really big cities like New York and Los Angeles are seeing Texas trail towns as good places to call home. According to an article in the wsj by Alina Dizik, they are buying homes in Fort Worth to get better prices on larger luxury homes, walkable neighborhoods, and a yard for their dog. In Fort Worth, they also can get access to the Trinity River Trail and proximity to the city’s cultural district if they so choose.

nashua_river_rail_trail_3

The Trinity Trails System

The Trinity Trails are a system of trails along or near the Trinity River in Fort Worth. There are over 40 miles of trails along the river and its tributaries. The trail network connects with 21 parks, the Fort Worth Botanical Garden, The Japanese Garden, Log Cabin Village, the Fort Worth Zoo, the historic Stockyards, and downtown. You could disappear for a whole weekend on that trail and never be bored.

The Trinity Trail also offers 17 trailheads for picnics and rest stops, five boat launches for canoes, kayaks, and sculls, a water-ski slalom course and fishing in a number of spots. For a map of the trail, visit

http://www.trwd.com/wp-content/uploads/trinity-river-trail-map.pdf

Fruitful Hunting

You might want to consider looking for flip-n-fix properties in the areas along this trail. Although the Wall Street Journal article was talking mostly about luxury homes, it did mention a rehab that the owner undertook themselves. Your hunt for the perfect, or at least interesting and profitable, fix-n-flip property might bear fruit in this area.

If you find a deal, give me a call for a quick gap loan to secure the property or for a full fix-n-flip rehabilitation loan. You can e-mail too. I can help with loans in the DFW metro area.

Pat St. Cin

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References:

Dizik, A. As Homebuyers Flock in, Fort Worth Embraces its Cowtown Reputation. WSJ, January 17, 2019.

Nashua River Rail Trail 3 photo by Photo by White, Michael A. at English Wikipedia [Public domain], from Wikimedia Commons.

In-a-Hurry Loan to Cover the Gap

There are several reasons why a fix-n-flip investor might want to secure a fast loan to cover a gap. A gap loan, as the name implies, is a loan that bridges a span of time. It helps you gain control of a property quickly even if you are still scrambling to get all your paperwork done for a full rehabilitation loan.

A Buyer in a Hurry
At some time or other, you might face a seller in a hurry. One situation that puts a seller in a hurry is foreclosure. Many property owners in this situation are in denial so they wait until the last week or so, or even days, before the foreclosure sale to act on saving their credit. To save their credit, they must pay the bank all they owe on the mortgage right now. The house might actually be worth much more than what they owe if they have been paying on the loan a long time or put a large payment down on it. But, a foreclosure on their record will ruin their credit. So, for them, it is better to sell at a discount and survive to buy another house another day.

In this scenario, an owner in foreclosure has agreed to sell the property to you at a steep discount, but they need to close the deal quickly. You, the investor, want to buy this property and you make an offer. However, the competition is extremely stiff, and another investor is sitting in the wings waiting to obtain the property. Your offer locks up control of the property temporarily. You need to move quickly to secure a loan. Normally the loan process takes a minimum of 7 working days and typically takes 10-15 working days.

A Nonrefundable Deposit

Another reason you might need funding in a hurry is that you have stumbled upon a wholesale purchase with a tight deadline to close, perhaps 2 to 5 days. The property is ideal for your purposes and you want to make an offer. However, if you don’t get the deal closed by the deadline, you will lose the nonrefundable deposit you are required to put down and control of the property you are seeking.

 

mind_the_gap

Getting Control of the Property

Here is where obtaining a gap loan is useful. A gap loan allows you to purchase the property as is while you are in the process of obtaining a rehab loan. The gap loan can be secured in 2 to 3 days typically. Your strategy is to obtain control of the property through this gap loan, begin paperwork to refinance the loan immediately and eventually complete the rehab and offer the property for sale.

REI Capital Resources has funds available for fix-n-flip loans with terms up to 6 to 9 months with a minimum of 3 months.

Fix-n-Flip Option 2

E-mail or call for more information on minimum and maximum loan amounts, interest rates, terms, and fees for specific project. I can help you with first liens only and these loans are limited to the Austin, DFW, Houston, and San Antonio Metro areas.

Pat St.Cin

Patrick@reicapital.cash

512-213-2271

Austin, Texas

BE AWARE: Part 1

When making a commercial real estate transaction, whether as buyer, borrower, or lender, you really need to do your research into the property’s current and past uses and potential environmental issues. Remember hard money loans are offered based on the value of the property. So, you want to look carefully at anything that affects the property value now and in the future.

This type of look around and document is called a “due diligence” assessment. As the purchaser or mortgage holder, you want to compile information and investigate the property you are interested in buying to make sure you are aware of any issues with the property that will affect your financial outcome. And, you want to do this before you buy.

Just as you would look for issues with the property’s title, such as judgments and liens, on the financial side; and on behalf of your future renters and buyers, check out the safety of the neighborhood at night; and again on their behalf, inspect the road for gargantuan pot holes that might eat their Prias or VWs; you also want to look at the property itself and at its current and past uses for your own sake to make sure you are not inheriting any costly environmental issues that you are not prepared for.

Cleanup Will Cost You

Environmental contamination, such as asbestos, PCB’s, radon, leaking underground storage tanks, mold, mildew, and lead-based paints on a property can cause the cost of “fixing” the property to explode so you want to be aware of these situations and prepare for them or walk away.

The official name for the investigation into environmental hazards and liabilities on a site is called a phase I environmental assessment. It determines in a methodical way if there is any environmental contamination or hazards in a building’s region or within the building itself. There are many professional firms out there that do this kind of work and one may have already been done on the property you are thinking about.

Get the History

The environmental site assessment typically addresses the history and current conditions of both the underlying land as well as physical improvements to the property. This assessment would scrutinize the land for soil contamination, the groundwater and surface water for contamination and quality.

It would look at the structure or structures on the property you are buying. Are there abandoned drums of unknown liquids or materials, an unlicensed dumping ground in the woods in back of the house, contaminated water wells nearby, or chemical residues, asbestos, mold, mildew, or other hazardous substances in the basement?

asbestos_fibres.jpg

Abestos (tremolite) silky fibers, photo taken at the Natural History Museum in London by Aram Dulyan, public domain, Wikimedia commons.

Neighboring Properties

The phase I environmental assessment would also evaluate if there are contamination risks on neighboring properties that might affect the value of the property you want to buy. Before you invest in the formal environmental assessment, you might want to do a little sleuthing yourself to see if you want to invest even that far  You can start by performing some visual inspections and record searches yourself.

Walk around the neighborhood and take notes on what is nearby, within a half mile or a mile. Are there hazards or attractions in the vicinity?

Review Federal, State, Local, and Tribal records of the property using its GPS coordinates and review the records for properties up to a mile away.

Interview people who are knowledgeable about the property, for example, past owners, current owners, managers, tenants, neighbors.

Fires, Floods, Mud, and Spills

Examine municipal or county planning files to check for prior usage and permits granted and conduct file searches with public agencies, such as the fire department, state water board, county health department. Ask yourself, has a previous building on the site burned down? Why?

Examine historical and aerial photos for previous and current structures in the vicinity, like an old rail yard, military base, or gas station. It is a good idea and sometimes even fun to look at photos back to a time when there was only bare ground at the site.

txlakeconroemap-e1546539800547.jpg

USGS Topo of Lake Conroe, Tx and vicinity, public domain, Enter a caption

debris_flow_deposit_ladakh_nw_indian_himalaya_2-e1546539957481.jpg

Debris flow in Ladakl, India photo by Dan Hobley, Wikimedia commons.

Examine USGS maps and look at the drainage patterns and topography. We have seen enough in the news lately to make us aware of the dangers of floods, mudslides, fires, and hurricanes.

Where one of these has occurred, it is likely that another will follow sometime down the road. Ask yourself, has this property been flooded before or does it lie in a floodplain or an arroyo?

SBA and HUD

If you are considering lending money on a property, you might want to take into consideration the requirements of the US Small Business Administration’s 504 Fixed Asset Financing Program. It requires specific and often higher due diligence requirements than regular real estate transactions. These assessments are required for certain NAICS codes that associated with the prior business use of the property. There are 58 specific NAICS codes that require Phase I Investigations. These include, but are not limited to: funeral homes, dry cleaners, and gas stations. According to Wikipedia, “The SBA also requires a Phase II Environmental Site Assessment to be performed on any gas station that has been in operation for more than 5 years. The additional cost to perform this assessment cannot be included in the amount requested in the loan and adds significant costs to the borrower.”

The US Department of Housing and Urban Development also requires a Phase I ESA for any condominium under construction that wishes to offer an FHA insured loan to potential buyers.

Remediate or Remodel?

All of this detail is indeed not meant to scare you away from buying real estate to remodel and resell or to remodel and rent. It is only meant to make you aware. It is trendy and even admirable to consider buying old junked up industrial property down by the river or in the mining district and turning it into polished urban housing or shopping pavilions.  If you have ambitions in this area, be sure to look around carefully, do your research, know your costs, and have money ready to remediate the site for you are probably looking at more than a quick remodel.

Disclaimer: I am not providing environmental advice or investment advice.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

That Shiny Top Matters

Texture and Color

Even if you don’t cook, but you are interested in successfully fixing and reselling a home as an investment, you need to develop a passion, or at least an interest, in countertops. It seems to be the first thing everyone wants to change in their house or in one they are looking at to buy. Either it is not the right material, it is not the right color, or there is just not enough of it. When it comes to kitchen countertops, the lumber yard has almost as many choices as the cereal isle in the grocery store. There are the different materials themselves; and then beyond that, there are textures and colors that add to the variety.

Dusting and Resale

I wonder why the kitchen counter has become such a focal point. I have my own ideas. First, I think it has to do with cleanliness. Cracks and porous materials can hide bacteria. But I also think it has to do with visual deprivation, a response to the minimalist approach to decorating.

When I was a child, I loved to walk across the unfenced backyards behind my grandparents’ house to the house of a little old lady who lived on the corner. She always let me in to admire her china dog collection. The house was full of more than dogs from all over the world though. It was filled with beautiful objects in ceramic, plaster, iron, wood, glass, and cotton thread. There were figurines of dogs and birds, glass fronted cabinets of vases, crystal, salt cellars, pitchers, and salt and pepper shakers in all shapes and colors. There were heavy door stops shaped like sheep or bears and small dollied tables.

All these wonderful things needed to be dusted. I think that is why the maximal style of furnishing bit the dust; too much dusting.

A Focal Point in Open Concept

Cleaning is much easier when there is less to work around. But, maybe it is because we have become visually deprived by this turn in furnishing fashion that we focus so much attention on the kitchen counter. In many open-concept homes, the kitchen is the center of the living area. The cook wants to be a part of the action, and so the kitchen is exposed. It is not the couple of added on rooms behind a wall off the dining room like it was in my grandma’s day. As the kitchen counter surely is a useful area, the minimalist can take pleasure in its expanse and beauty and still not have “too many things,” just one beautiful thing in the middle of everything to look at and display.

IMG_00003728.jpg

The kitchen counter even made the Wall Street Journal this week. In an article by Robyn A. Friedman on December 26.

“Quartz is All the Rage”

The variety of countertop materials has grown like the number of cereals in the cereal isle at the grocer since 1960. Formica laminate is not the only choice any longer. There is granite, quartz, agate, glass, wood, and for those with a more industrial taste, stainless steel.

“Quartz is all the rage now,” Bill Feinberg of Allied Kitchen and Bath, tells Ms. Friedman. Quartz is an engineered stone that has the look and feel of natural stone and comes in all colors, even white. It resists scratches and stains and never needs to be sealed because it is nonporous. It costs about $50.0 to $100.00 a square foot, including installation.

Granite is found all over the world and comes in many colors with interesting vein patterns. There are many finishes to choose from including, polished, honed, leathered. It is pre-sealed for durability. The price for granite is $50.00 to $75.00 a square foot installed.

Glass is available in many thicknesses and colors. It is nonporous, can be backlit, and display a work of art between its layers. However, it will chip and crack if you drop the canning pressure cooker on it. Glass costs $200.00 to $300.00 a square foot installed.

Agate slabs are a work of art all by themselves and they are semiprecious. Agate can be backlit as well. An agate countertop will cost you $300.00 to $500.00 a square foot installed.

Butcher Block is also available in many kinds of wood from unfinished European Walnut to Ash and Birch. Wood offers warmth and natural beauty. It can be unfinished, oiled, or stained. For the price of a sheet, see your call hardware store.

Topping it Off

Whether your own tastes follows the minimalist or the maximalist anyone in the business of remodeling a house for resale, needs to keep their ear to the ground about what is the latest in kitchen counter fashion. You need to take an interest in the kitchen counter and the choice of and cost of the materials used to top it.

Reference: Friedman, R. A. Countertops Limited Only by Your Budget and Imagination. WSJ December 26, 2018.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

Downtown by the River

If you watch much of the show “Buying Alaska,” you will be very familiar with the phrase, “It has a view.” In Alaska, it is all about mountains, glaciers, and sometimes a lake, but in many cities the desired view involves an urban river. According to an article in the Wall Street Journal, “The Latest Housing Hotspot Is Downtown and by the River.” I think that San Antonio already knows this.

“Urban Energy and Natural Beauty”

Ceclie Rohwedder, (WSJ, December 6, 2018) writes about couples in Minneapolis, Washington DC, and Omaha trading in their country homes for homes in remodeled power plants and other industrial buildings in downtown areas along urban rivers, buildings that have been turned into modern condos. What does their new home offer, she asks? “Urban energy and natural beauty” one couple says.

I must agree. Watching a river is like watching a fire, its mesmerizing. But it is interesting and beautiful too with boats, birds, and fishermen. And those old buildings left over after industry has moved on, I have often looked at them, the old brick warehouses and mills that sit along the elevated freeways of our cities, the ones with the fading billboards high up on one corner, and vacant windows. What is the architecture like, I’d wonder? They look so sturdy. They are not going to come down soon, but who is going to use them.

Americans Just want to Live Downtown

Well the city planners, developers, and investors are way ahead of me. They are turning these behemoths into housing with a view, housing near culture and sports arenas, and water. Young professionals and retirees alike, it seems, crave community and walkability along with a touch of nature. And Americans overall (this year anyway) want to live downtown. An urban riverfront close to downtown offers work, culture, and play.

These are the areas that are drawing people to look at the old and want to make something new out of it. It is the buying and the fixing up of the building that is the investment. But investors are doing this all over the country and people are buying.

So, even if you are not up for buying and remodeling the old paper mill down by the river, when you are looking for a house to buy as a fix-n-flip investment, do not forget to scout around in these riverfront areas of your town. There, in the shadows of the big buildings, might be some smaller projects, homes or shops, more to your liking.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

Old_houses_by_the_Agout_River_in_Castres_(2)

Cold Storage 101 or −101°

Looking into the future, where should you put your money or your efforts if you are looking for a commercial real estate project that can offer decent returns. Perhaps you should think about one of the things we Americans, and people and animals everywhere, really need, food.  According to Esther Fung, WSJ, the best performing real estate investment trusts this year are in the area of food storage —cold food storage.

Right now, according to Rick Romano, head of PGIM’s global real estate securities, “cold storage is about as defensive an investment strategy as it gets.” American Realty Trust, the only publicly traded cold storage real estate investment trust, has risen 50% since the start of the year.

He also says that only 2% of groceries are bought online, but as people work longer hours and avoid long commutes and extra trips to the grocery store, that number could rise.  If it goes up to 5% or 10%, he suggests, there will be a continued demand for cold storage facilities in densely populated urban areas.

Cost of Building or Remodeling for Cold Storage

Cold storage might be a very good investment for an investor interested in commercial real estate construction or a commercial fix-and-flip project.

I know there are cold storage facilities operating near me, near the train warehouse area, because I have a friend who went to work there and in a cold storage facility, even the office space is a cool 40°.

According to Joshua Everage at A-N-C- cold storage, investment management firm JLL says the “cost of building a new cold storage facility is $150 to $170 per square foot, compared to $50 to $60 dollars a square foot for regular warehouse construction.  Most cold storage facilities are new builds, but you can expand or upgrade existing warehouse space at a cost of $60.00 to $70.00 a square foot. That is about 40% of the cost of building a new facility from the ground up. ”

−Everage also says that when you are looking at costs, consider the usual items, like location, but also the unique requirements of a cold storage facility, the freezing equipment.  Do you need a unit that can flash freeze product like fish, or a chiller? There is a difference in cost.  Also consider the height of the docks, the height of the building itself, exterior and interior wall finishes, and plumbing requirements. For a free cold storage construction guide, visit http://www.anccold.com/blog/cold-storage-construction-cost and download a guide.

For help coming up with a lender or someone willing to tackle the project, call me. I’m based in Austin, but I can meet you where you are at, in Dallas, Houston, or San Antonio.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References:

Everage, J. 2017. Cold Storage Construction Cost Per Square Foot. Blog, at http://www.anccold.com/blog

Fung, E. WSJ, December 2018, Real-Estate Stocks Beating S&P 500 for First Time Since 2015. https://www.wsj.com/articles/real-estate-stocks-beating-s-p-500-for-first-time-since-2015-11545134402