Back on the Market, Six unit in St. Louis

[Kathy Henley]

We presented our counter offer on a 6-plex, when another party crashed the party and offered full list price. Who does that in St. Louis! We were out of the deal.

Getting that far was very exciting. It meant a quick read of ‘Commercial Loans 101’ and writing up a loan request package. It worked. The bank’s letter of pre-approval got my agent through the door to view the property. The rents seemed high, 5units $1000/mo plus 1 $850., so I asked my property manager to walk the place with the agent. Listed at $449,000 in the Shaw area of St. Louis. Their report was good: The 6-plex is fully rented; 3 bedroom units, the units are big with washer/dryers in 4 of the units. Negotiations began . . . and then ended in 3 days.

Two weeks later, listing agent wanted to talk. The Interlopers backed out because of the inspection report. It needed $18,000 worth of tuck pointing and had a questionable breaker box. Seller offered repair cost adjustments and still they wanted out. Seller very motivated. His agent offered us the same deal - tuck pointing and electrical paid by seller.

My husband hadn’t gotten over our lost opportunity. The numbers had looked good.  Were we greedy?  He wanted a second chance and here it was.  Our 2015 goal is 10 units and this could have been a good chunk in one deal.  The seller’s agent suggested we start where we left off, $420,000, with seller giving credit for tuck pointing and electrical repairs, to the adjusted offer of $403,00. He said there were two other interested parties. We needed back up.

I talked with the commercial banker and he spoke positively about its location (near the highway, university and hospitals.) We got another bid for the tuck pointing from my property manager's favorite company.  It was $10,000 ish.

My husband wanted to sweeten our deal and suggested we waive a sewer lateral inspection. Our agent rejected this idea. We are out of town investors and she knows her neighborhood. Instead we waived any demands of costs to repair the 2 hail damaged condensers of the air conditioning units. We offered the quickest close date that our banker could agree to. We asked for a roof inspection, lateral, and an inspection of the basement plumbing system. (Why is the lowest 20” of drywall missing from the storage locker area? Seller wouldn’t say.) We chose to add the difference of the tuck point repairs ($8,000) back into our bid and add a little extra.  We prepared the above language and offered $415,000, knowing that we would be financing the tuck pointing and electrical repairs.

Now we wait for their decision.