Does this seem strange...

Question

I went to look at a 4-plex to purchase about a week ago with my agent. The building is about 5400 s/f, so we spent the better part of an hour in there with the owner as a chaperone.

The building next door is in disrepair and is quite an eyesore. We asked the owner several questions about it and brought it up on at least 3-4 occasions. He divulged what seemed to be his knowledge on the property and at one point there was even some speculation on the current or previous owner of the building.

We scheduled another showing yesterday to view one of the apartments that wasn't accessible the week before. My agent did a little research and found that the owner of the building...the same one that chaperoned us around...owned the crappy building next door as well.

What do you guys think about this? The guy was clearly hiding the fact that he owned the building next door. When we met with him yesterday, my agent asked him about it point-blankly and he gave a sort of shaky response. He then said he didn't know if he was going to fix it up or try to sell it or what.

Thoughts?

Account Closed · Answer

i would tell him you're interested in buying that one too, and maybe he'll start talking...that's where the deal is..the property he's embarassed to call his own

Ibrahim Hughes · Answer

I think it was Jon Holman who stated recently that he assumes that everything about a deal is a red flag and does his due dilligence accordingly. In my book and experience, the guy could have been honest with the other building and I STILL would check the property Michael is interested in buying thoroughly. If he wants to use the secrecy as an excuse to check things out thoroughly, then fine. But I've come across enough weird sellers who are willing to sell at 50 cents on the dollar and who make almost no sense at all with what they do to know that I certainly wouldn't use the secrecy to walk away from what could end up being a good deal.

Nathan Emmert · Answer

My gut reaction was different. If he's cutting corners next door, chances are he's cutting corners on the one you're in too. My gut is he put a real shiny shade of lipstick on a pig. I would dig real deep for signs of neglected maintenance.

Account Closed · Answer

I concur with Bryan A. If for no other reason, that renting the current building to tenants is difficult with an eyesore property right next door. Make it a package deal. You'll buy both or neither, because you must protect your investment. Of course, due diligence is required on both properties to be sure you are getting a great deal.

Jon Holdman · Answer

Perhaps he was just ashamed to own such a dump. But silly to be dishonest since its so easy to find out the truth.

James Vermillion · Answer

That seems very strange, yet not surprising considering some of the experiences I have had with a couple people. He obviously did not want you to know that he owned the building, which I am sure thrown up some red flags. I am not sure what he would be trying to hide or what his motivation would be, but it would be very hard for me to trust anything he said. If I did not purchase the 4-plex you looked at I would make a point to bring it back up to see what he says and ask him point blank why he was dishonest with you during the first meeting.

Jack Knochel · Answer

My first thought was he is hiding something and after reading other replies here I still feel that way. If you didn't ask and he didn't give any info on it than thats one thing, but you asked and he wasn't honest. I agree with making sure you check the one your interested in buying thoroughly before buying. Also agree that you should try to buy both buildings if he is interested.

Michael Seeker · Answer

@Ibrahim, I don't mind somebody hiding their personal business, I even expect it usually. The problem is that this guy was divulging EVERYTHING about anything (recent vacation, life history, kids, wife, you name it). He was essentially an open book and very anxious to talk about anything and everything. This is why I find it a little disturbing that he tried to hide his ownership in the building next door. He didn't even brush the subject under the rug when we initially asked, he speculated about what was going on with the place. He seems like a decent guy, but it just didn't quite feel right.

Ron Robin · Answer

Then some people are just private. I don't talk about my business unless the person I am talking to needs to know. He may haave thought you did not need to know his business. You are reading to much into it. I may tell you about my vaction, my grandkids, My kids but not my business.

Ibrahim Hughes · Answer

Before you write him off why not ask what his plans are with the property next door? I honestly don't see a red flag yet until he divulges his plans for the building. Folks hide their ownership of property for a number of reasons. Maybe he didn't want his tenants to know he owned the building. Maybe he didn't want to talk about it in front of the agent and have to owe a commission if you buy it. Maybe it's in foreclosure and overencumbered and he's embarrased. Could be a number of reasons. If I didn't buy the building it would be because I wouldn't want to own a building next to an eyesore that could negatively effect the marketability of my units. Not because I can't figure out why the seller isn't being open about all of his investment properties. Just the way I see it.