Commercial RE: When Do You Make An Offer?

[Lou Ruggieri]

Okay guys, this feels like a super-newbie/bordering on embarrassing question at this point. I have two multfamily buildings under my belt, but I'm now looking at my first commercial apartment building, which will be out of state b/c I just don't have the money to play big time real estate in NJ yet and can't deal with sub 7% cap rates as "good". So I've found a couple that are of interest, but obviously I don't know basic info about each of them (I've walked them and have initial financial numbers). I've been asking more questions about the properties, specifically about some discrepancies with the numbers, and the broker I've been using has been somewhat hinting at the fact that nitpicking every little detail is more in the due diligence phase than the initial intro phase.

Of course I understand he wants me to make an offer so he doesn't feel like he's wasting his time and there is some money on the horizon for his work thus far, but I'm kind of stuck as to how to proceed. I can freely admit that I am a chronic sufferer of paralysis by analysis and can get bogged down into over thinking, ESPECIALLY when it comes to major investments I'm going through for the first time (my first duplex took months). But on the other side, I don't want to get pushed into making an offer without what I consider somewhat requisite information about a property.

So my question is when do you or have you made an offer on your commercial sized buildings? Is there a certain checklist or thing you need to have and then you are ready to make an offer or do you just see it, run numbers, like it and offer? I'm at the point where I know I like this property enough but there could be some issues with building permits that aren't clear and some issues with (I don't know what the technical term is) possible tenant ... stuffing(?) ... meaning it looks like he may have given incentives like no deposit required to some tenants in order to raise the perceived value of the property. So there are things that could kill the deal or make my offer significantly less if found out, but is that info delving too deep before showing that I am serious? I assume my offer is subject to inspections and due diligence, so if I make an offer, should the inspection period be on the longer side? I don't want to lose the momentum on this, but I also want to try and minimize the potential for tripping and falling right at the starting line if possible.

Hopefully this all makes some sense, and thank you in advance.