Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
I just had an apartment transaction fall through yesterday due to changes in lenders requirements for buyer. The lender reduce the loan amount by $1 million and required a reserve account set up for 12 months P ITI, $725,000. There was no financing contingency in the transaction so buyer chose to forfeit significant EMD.
I have not verified but was told by another potential buyer that Chase bank is now requiring 18 months reserve for PI TI. This will change a lot of values on properties and ability and interest of buyers to purchase, in my opinion.
I am curious as to why you decided to sell in this uncertain environment. What motivation do you have?
Since this transaction fell through, are you willing to reduce your asking price to where it would make sense for the next buyer or hold on until the market get back to where it was before the virus?
I am curious as to why you decided to sell in this uncertain environment. What motivation do you have?
Since this transaction fell through, are you willing to reduce your asking price to where it would make sense for the next buyer or hold on until the market get back to where it was before the virus?
I guess I have multiple motivations for selling one of my buildings. I sold a large building a few years ago and nearly 100 SFR's. I have a good GST set up for grandkids and future generations and it is overfunded. I have been in real estate for over 40 years and I don't really have any other goals to reach.
I am interested in taking some chips off the table with this sale and if the market does suffer a large correction, I might be motivated to reenter the marketplace with my chips.
I purchased this building a few years ago for $6.2 million with 25% down. I have received net cash equal to the down payment and all the equity would be additional profit. The contract that just fell apart was for just under $13 million and I had four offers previously. Two of those agents have already notified me they have parties interested again. I have not quoted a price and will leave it up to the market. That is plenty of profit for me irregardless of the next sales price.
Investor · North Richland Hills, TX · Member since 2013 · 1k+ posts · 1k+ votes
6y
@Rich Weese, thank you for the explanation. Suppose all other buyers bow out. Would you still expect to get a price close to $13M 3-6 months from now or would you lower your expectations to something like $10M?
The same agent that brought me the original offer that I accepted just emailed me. He has two buyers he is presenting the property to. An additional agent that brought an offer the last time around, has also asked for all the pertinent information and told me he has the same buyer purchasing more properties. I guess time will tell but having competing buyers with interest is always a good thing. I expect one other broker that I have contacted to also join the fun.
For the right buyer, I still feel I will get over $12 million offer. I don't think it will be much different six months from now. Time will tell.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
6y
@Rich Weese it’s a shame your buyer couldn’t find a different lender to work with. Of the 3 main commercial lenders I work with (all small local banks and credit unions), one has temporarily stopped lending in order to work on PPP applications, and the other two have tightened up their underwriting requirements a bit as well as raised their down payment threshold from 25% to 30-40% depending on the deal. Did you consider offering them seller financing?
Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
6y
@Rich Weese congrats rich, curious about what sector the building hosts and the structure of the lease(s) if you don’t mind sharing g the high level stuff?
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
6y
If I understand your post correctly, I have two buildings in the Dallas area. One in Grand Prairie and one in Mesquite totaling approximately 300 units. They are both class C properties with high percentage of Hispanic tenants. I previously owned one other property of the same type in Garland with the same clientele. My leases are all more than six months minimum and no more than 12 months. I would be more than happy to answer additional questions if these were not the answers you are looking for.