Determining fair price of industrial complex - Posted by Robert Harris

Posted by Ed Garcia on April 05, 2002 at 10:31:18:


I’m sorry, but I don’t believe the numbers you have shared with us in your post. The NOI doesn’t match the gross income. I can’t believe the expenses would only be $29,500.

If the numbers were right, I don’t believe the seller would be selling it for1.6 mil.

With and NOI of $214,350 at a 10 cap, the property would be worth $2,143,500.

You haven’t given us enough information and I question the information you have given us.

Robert I would like to suggest that you take you question over to Ray Alcorn on the Commercial section of our forum.

But before you do I would like to get the following questions answered so that you can properly discuss your deal.

We need more information before we can go any further with your deal.

(1) Describe The Property and the surrounding area?
(2) How old are the property?
(3) What’s type of tenants are in the complex?
(4) What’s the vacancy factor in the area?
(5) What is the gross income of the property?
(6) What is the vacancy of the property?
(7) What is the NOI?
(8) What are market rents in the area?
(9) Are there any other like properties in the area for sale?
(10) If so at what Price?
(11) What are the going Cap rates in the area on Industrial complexes?
(12) Have any other similar properties in the area recently sold?
(13) If so at what price?
(14) How much does the seller owe on the property?
(15) If there is a loan, is it assumable?
(16) Will the seller carry a second?
(17) Is there any differed maintenance?
(18) If so, estimated cost of maintenance?
(19) How’s your credit?

Also if you go to Ray gives you a Due Diligence list.

I’m sure that will be helpful to you on how to work a deal.

If you want my opinion as well as Ray’s, at least answer my 19 questions and I will be glad to help you.

Ed Garcia

Determining fair price of industrial complex - Posted by Robert Harris

Posted by Robert Harris on April 05, 2002 at 06:48:53:

I’m looking at an industrial complex with a asking price
of $1.6 million (asking price is negotiable). The property
grosses $243.850.00 per year. After expenses income is
$214,350 before mortgage pmt. What would be a fair market price for this property?. It is fully leased with long
term tenants. Any help would be appreciated…