All Forum Posts by: Mark B

I know photos make these kind of questions more real. Here's an album of pictures if you are curious:
http://archibot.imgur.com/commercial_prospect#N7RxD

Thanks, Mark

I've been working on a difficult deal, but I just know that it should be doable. However, up to now, the seller and I can not come to terms on the price.

I think the experienced BP pros (such as yourself) could maybe help me structure the deal in another way.

Background: The seller has a 3200 sf office/retail building that she would like to sell with owner financing. She owns it outright (paid it off in 2001). She bought it with owner financing in '94 for $125k, 9% interest.

My plan is to buy the building, move my office into half and convert the other half to a microbrew tap room. (I'm an architect and have already done the zoning/ liquor license verification.)

Seller is asking $275k. The comps don't justify this. The building is also in rough shape. She hasn't done any maintenance or upgrades in the 18 years she's owned it. I see no justification for doubling her money (the neighborhood has not changed either.)

She wants to close shop (it's practically empty and she has already retired for all intents and purposes.) She wants to hit the road in her RV and get a regular income from the payments.

She is so focused on price that we have not been able to talk terms too much. I gave her a formal offer in writing (in person) of $176.5k with 10k down and 5% interest. I thought this was going to be a starting point of negotiation, and that we'd negotiate toward 200k. Her agent called mine to say "no thanks".

I think the key is to frame the offer differently; talk income per month or some other angle. There is no other interest in the building. It has been on the market one year now. What do you think?

Wow, I knew KC was pretty central geographically, but had no idea at how close it also is to the weighted center based on population. Check the bottom half of this page if you are into maps. http://gislounge.com/us-census-2000-population-trends-mapped/ Watch the center running WSW.

To answer the post, I think it is a killer idea and would be excited to go if I could afford it.

Thanks for sharing Danny. I think it is smart how you didn't show an image of a house, because I think those images can be distracting to the seller.

So, you are renting by the bedroom,and I assume the property has shared kitchen, entry, laundry(?), bathrooms, etc? Who is going to be responsible for cleaning those spaces (as Mitch mentioned) and what kind of rules are you going to have to set up. This kind of property takes a lot more management as I am sure that you know.

My wife and I have some friends (husband and wife) that specialize in this kind of thing in San Diego. They convert large houses and MFH into furnished "nice" apartments and target graduate students. They are very financially successful, but the wife had to quit her day job to manage the units full time. If you want, I can try to connect you with them to get the inside scoop.

M

Good idea. I was curious how many of these steals would be accepted. So how can I find out? Is it on their site somewhere or do I need to call and ask?

Oops typo. Yeah 2.5k - what a difference a decimal can make. Some of the properties sold for 35 and 45k - that would be a huge earnest check! Thanks.

Short report. Had a great time. The place was packed but I think many properties were sold at very good prices. (If indeed the underwriters let them go for the top bid amount.) I will definitely go again when they return to town - and this time I will do my homework in advance and be ready to pull the trigger.

They require a 25k cashiers check for a deposit that you can NOT get back if your financing falls through.

This is for you!

Congratulations. Your numbers look pretty good (but not knowing condition and taxes, etc.) You don't need a PM. The tenants will come straight to you anyway.
Good luck!
M