All Forum Posts by: Mark B

Hi.  Tenant wants to buy a share of my building.  But this building is used as collateral on another deal of mine.  Can I sell half of it?   What are the rules about selling assets that are used as collateral?

They want to make this purchase in 3 to 5 years.  Is there a mechanism that will allow this to happen?  And how will my bank know that I have sold it/ or a share of it?

@Gandharv Kashinath

I have a fourplex and it performs very well.  I spent some upfront money to make them nicer and I get a better tenant and very happy with cash flow.  Love 4 plexes.

ABQ's multi-family market is really strong. I've been very happy with the investments I've made here over the last 10 years. Maybe even more than other cities, I would say to really focus on LOCATION. Are you starting with a SFR or a 3 or 4-plex?

Scott,

ABQ architect here. Your quote sounds high, of course I have no idea how extensive the damage is. Forget taking it off and replacing with something else - there is just nothing cheaper or more suited to our UV here in ABQ than stucco. There's not a cheaper option. Most people in other parts of the country don't understand this. How many square feet (including garage) and how many stories is it?

I agree with Grant P. Out here in Albuquerque, most people have dogs. I require a Pet Rent and a Pet Deposit. The Pet Rent is $25.00 per dog and I set the deposit based on the size of the dog. I've read that dog owners stay longer so I figure I am saving all that time and money it takes to turn a place over to a new tenant over and over.

Thanks for the help Ned. As I mentioned, I need help with how to keep track of incoming rents and utilities payments. I'm not sure I am ready to dive into Quickbooks at the moment, but your excel file sounds like an idea that could work for me. Have you added that to the resource center by chance?
Thanks,
Mark

I'm bumping this because I would really like to hear more ideas on how to manage multiple properties. Specifically interested in how to keep track of incoming rents and utilities payments.
Thanks.

@ Mike, thanks for the idea about refi-ing. That could work. Looks like you didn't read my response two up from here. I did get an estimate.. check it out.

The owner financing is her idea. I followed my agent's advice a bit here - he thought since she had no offers in a year, in a dead market, that she would be ready to negotiate. I guess I was too aggressive - but the building isn't worth anything close to her asking price.

I would love to just move on, but this is the only building suitable for my needs in this very small neighborhood. I need to expand my boundaries, or wait, or have a breakthru - I'm looking for the breakthru.

Thanks Ross, I think that is a good idea about comps. I'm taking my comps over and a couple examples of rental rates in the area. I don't want to involve her in the business; I'd really like to invest in the building.

Just to clarify for Rich, the seller financing is her preference. I can also do a SBA loan and get a very good rate (not 5%, but I can negotiate up here.) She wants seller financing because it pays WAAYYYY better than a 1% CD right now. So I was not looking at this being a favor from her too much. The low down would allow me to put another $20k into repairs immediately (floors and roof.) So, she would be protected a bit if I defaulted. I think we could write those improvements into the deal, right?

Thanks for you insight,
M

@Joel, the building is the one with the block screen wall. I show the other buildings and Route 66 for context.
I think you make great points. Seller financing usually accounts for a greater sales price, but not this extreme. My agent pulled comps and they didn't even want to look at them. It was as if the number was pulled from the hat.

I agree with you and Rich that my downpayment was too low too, but again, I thought we could negotiate. I think she thinks she can rent it for 10$ psf but the comps in the 'hood are $6.50 (asking). Another problem is that her agent owns the building next door, and has overestimated the value and pumped up her expectations. She just fired this agent by the way, and they took the for sale sign down.

@Rich, I'm sure I upset her with the offer amount despite the fact that it matches the comps. I did have a contractor visit the building and give me a bid to make the necessary repairs (roof, all floors, elec., ceilings) and his bid was $70k. By the way, I used a 20 yr amortization and a 10 yr call. My accountant thought that 5% would be attractive to them since they would prob. not do a 1031 and the banks aren't paying but 1% interest. This may have been a misstep too.

My next plan is to meet with her face to face, one on one and see what she wants in terms of monthly income. I think I can up my downpayment to about $25k. What do you suggest in this case where her asking price does not match the comps? And her rent expectation is totally unrealistic without major improvements?

Thanks,
M