Posted by pros77 on February 03, 2000 at 21:01:56:
I agree with phil,verify, verify, verify,!
If you dont know the proper Questions to ask e- mail me
ill walk you though it and point you in the direction of financing. thanks …lamarr/pros77.@aol.com
Owner must sell leaving town… 11 unit bldg. need help? - Posted by Todd
Posted by Todd on February 02, 2000 at 04:05:47:
I called about this ad in the newspaper and talked to the owner. I am waiting on an APOD statement. Building is 19 years old. He is asking 170,000. What are the questions I might ask? Is this Building a good investment? … Can a beginner, like me, obtain such a property? or am I bitin’ off more than I can chew…He stated to me that there is only one vacancy. I thought about checking the courthouse records on the property might be a good idea…
Any advice would be appreciated…
Re: Owner must sell leaving town… 11 unit bldg. need help? - Posted by Judy Miller - American Note
Posted by Judy Miller - American Note on February 02, 2000 at 12:09:07:
If you call our office, we can fax you a sheet of questions to ask about the property. Please call Ron Ohara for this information at 800-659-2274 and tell him we “spoke” on line!
If the numbers look good and the property’s condition and value check out, AND if the seller is really motivated, AND you have the experience to operate this building, AND IF THE SELLER IS REALLY REALLY MOTIVATED, you might be able to use “Owner-financing” as a tool, get in without having to qualify for a new loan on an old building, get the seller to take back a note at closing that we can purchase for a discount. That gets you into the property, the seller can move on, and you’ve created a “win-win”. If however, the seller wants top dollar, and every dollar now, you may not be able to make the “blanket cover the toes”. But you can give it a try! How’s you’re credit? If it is good, you are in a better position to make this work than if not so good.
If you would like some more advice on this, please feel free to contact me. Judy Miller
Re: Owner must sell leaving town… 11 unit bldg. need help? - Posted by phil fernandez
Posted by phil fernandez on February 02, 2000 at 09:15:41:
Todd,
You’ve got to make sure you nail down the numbers. What are the current rents ? How many vacancies and what is the local vacancy factor for similar apartment properties ? Is any of the rent delinquent ? Are the tenants month to month or on leases?
Verify every single expense. Property taxes, water and sewer charges, insurance, utilities and heating costs, maintenance, lawn care, snowplowing.
Plug in a management fee, even if the owner has been managing the property himself. Your time is valuable. I’d plug in 10% of the gross for this expense.
How bout reserves for replacement. You need to account for the eventual replacement of the roof, furnaces, appliances, hotwater heaters. Exterior and interior painting of the units. New flooring. This expense has to come out of the cash flow not out of your pocket. Sellers never include the reserve for replacement in their expenses.
In a nutshell, verify, verify verify. Do not take the owners or realtors word on this. Do your own due diligence. Then and only then can you know what you can pay for the property.