Commercial Opportunity in my neighborhood

[Melissa S Vrobel]

Hi BP community,

I love my neighborhood and have two SFH and my primary there. I found commercial building on LoopNet and want to explore buying it. I read their NOI statement and know that it is not correct. Living there I happen to know several tenants aren't paying and there is no restaurant currently there and hasn't been for years. I am looking for some advice on how to move forward. I have a few commercial realtors that I reached out to, but thought that this community would be great to reach out to as well.

It is over 2M so I am guessing that a small bank won't take it on.  Half of my net worth is in the equity of my two rentals.  The rest is mainly 401k.  I also would be interested in partnering, but not even sure how to start.

Any articles, blogs, info welcome!

Cheers,

Melissa

[Jeffrey Abraham]

Since you live in the area you know the neighborhood better than anybody. First I would ask the seller to do a walk-through of the property and see everything firsthand. Then there are many lending programs here in the states that only require 25-30 % down with no experience only that you are a homeowner. If you would like more information please DM me and I recommend you to a hedgefund i been working with, have a nice week.

[Nikolas Engel]

First, I would ask the broker for financials for the building. Check it against the information that you have, if it doesn't match, make your own calculation.  If your calculation makes sense investment wise for you make an offer based on your numbers.

It is hard for the seller to completely manipulate the income of a commercial property, if your lender is thorough it will be revealed in the financing process. 

Have you looked into using a local credit union for financing?

[Chris Mason]

If some sucker comes along and takes those fake numbers at face value, they will pay a higher price than they should (certainly they will pay more than you), and that idiot will "win" the property. If the name of the game is "be the biggest idiot," it's ok to lose and let someone else "win."

Honestly, I'd give it a few months. If that idiot comes along, you can't control that or do anything about it. So don't jump the gun and tip your hand to early.

If 4 or 6 months pass and no idiot comes along, that's a good time for you to pop up with a reasonable offer (that the seller is considering "lowball," but so what). At that point, the seller has had time to go through their emotional journey. If you jump the gun now, or a month from now, you've interrupted that emotional journey and are giving them mixed signals with your premature interest. 

In terms of your financing question, the majority of loans we do are in that $1m to $5m range, so that's not an issue at all (fake numbers wasting everyone's time would of course be an issue, but let's stipulate that it's solved). I doubt 25% down is realistic, it depends on the accurate property financials, which you do not have yet, but if you need help sizing up the loan once you have those financials, I'd be happy to help with that.

Good luck, maybe talk to you in six months, bookmark this thread. :P