Posted by Valeri on August 09, 2003 at 18:34:48:
Thank you for the feedback. I have decided to pass of this deal. Thanks again.
5 Plex in Santa Monica - Posted by Valeri Corley
Posted by Valeri Corley on August 09, 2003 at 11:54:03:
Hi, I have a seller asking me for $12,000.00 option to purchase fee for a 5 plex in Santa Monica in a very good area. The $12,000.00 does not come off the purchase price. This fee will lock in the $1.5million purchase price for two years. Currently the rents do not support the $1.5 purchase price. The seller also wants $150,000.00 my Novermber 2003 and another $350,000.00 by February 2004 which will be deducted from the total purchase price. I am concerned about committing to $150,000.00 by November and $350,000.00 by February. I also feel that handing over this money to the seller will cause problems for me when I go to get it financed in two years. What are your thoughts? Any suggestions on what I could counter offer that would be more favorable for me, or is this a great deal as it stands - should I do everything I can to make this work? I would appreciate any and all help you can provide! Thanks! Valeri
Re: 5 Plex in Santa Monica - Posted by Robert O
Posted by Robert O on August 09, 2003 at 18:08:26:
Its hard to say without more info (rents,comps, vacancy rate) but I get the distinct impression that there is no deal here. I can’t see how you could get a positive cash flow without a HUGE down payment. Correct me if I am wrong but isn’t there rent control in Santa Monica ??? I would RUN the opposite direction of this “deal”.
Re: 5 Plex in Santa Monica - Posted by Arthur
Posted by Arthur on August 09, 2003 at 14:19:38:
Why are you trying to buy a property that does not justify the rents? No matter how he finances it, if its expensive its expensive, unless he finances with favourable interest rate.