Posted by Ed Garcia on February 07, 2001 at 19:07:48:
I’m sorry I didn’t respond to you sooner, but sometimes I get so many post I get blinded and forget which ones I’ve answered.
Jason, the problem with your post is that you have told us about the properties that this man has available, but have not given us an individual breakdown of each property, for us to know what price we want to pay for each property. We know that we should get a good deal because we are making a bulk purchase, but again where should we start.
We don’t know if there are loans on each property, and if there is, how much etc?
We don’t know the condition of each property?
If there is work to be done, it has to be penciled into the deal, so we would need to know that?
We don’t know if the seller is willing to carry a second and if so how much on each property?
We don’t know how these properties relate geographically to one another?
Are they on the same street, same town, same city, same county, where?
You’ve seem to have grouped them together and created an income as a group, which is an incorrect method to use on this package, unless they are adjacent to one other.
Jason I can go on, but my point is you haven’t done your homework on each property. Remember Jason, if you sell them, you’re going to have to sell them individually, and so that’s how they should be analyzed. Yes it’s true, that sometimes you can purchase a package of properties so well, that you can go a little more on one because you made a killing on another, but I can’t feel that with your presentation.
We don’t know if your rents are above market, below market at market, what? You really haven’t given us any information about the market of each property.
Jason, I wish I had more time to spend on your deal because I can see that the old man is negotiable. But this deal is a little to complicated to work in a few posts, and you haven’t given us enough info.
Jason, here are the battery of questions I ask when I start to work a deal,
(1) Describe The surrounding area?
This question is to see if the subject property is conforming to the area.
(2) How old is the property?
(4) What’s the vacancy factor in the area?
(5) What is the gross income of the subject property?
(6) Why is the front building vacant and for how long ?
(7) What is the NOI?
(8) What are market rents in the area?
(9) Are there any other units or buildings in the area for sale?
(10) If so at what Price?
(11) What are the going Cap rates in the area on this type of property?
(12) Have any other properties of this type 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) We already know that there’s differed maintenance, what’s it going to cost to
(19) How’s your credit?
Jason, your credit looks fine, but then again I don’t know how resourceful you are.
Jason, If you like, you can call me, and I’ll see if I can give you some guidance on your deal, my number is (909) 944-0199.