All Forum Posts by: Avi Garg

Looking at a property near Atlanta and wanted to see if anyone has a recommendation for a commercial agent to work with. 

@Account Closed@Rob Harris

Thanks a lot guys. In the offering the nearby properties sold at a 7.5% CAP rate but I will find out the market rate if its any different.

However just for the sake of analysis, lets say the market CAP is 14. Should I still take 50% as my expenses to come to a purchase price? How do you account for low expenses due to the recent renovations?

There is some value add in terms of selling land, but that's another discussion

@Andy N. Now that you closed on the property, what were your inspection costs? Any other costs?

@Account Closed Thanks for setting me straight. Guess I got carried away. Yes I need to find the market CAP rate.

Another question for more experienced folks: Would you use the listing broker as your agent or would you get a buyer's agent? Based on what I have read so far, people would just send in their offer direct to the listing broker and work with him/her to get things done. 

Looking at a small apt building of 24 units as a buy and hold listed at $695,000. It was renovated last year so not much room for value-add. Rents are on the higher side as well. Roof and HVAC reserves have been accommodated in the proforma analysis based on the remaining life. Proforma CAP is 14% and Current CAP is 12%

Few questions:

1. Currently 4 units are vacant. Do I used the potential income for these units in my analysis? I think I should but wanted to get feedback.

2. Expenses are on the lower side (including the reserves for the roof and hvac) at 34%. With potential gross revenue of $147424, the NOI is $97300, it looks like a good deal. If you would have to send in an offer, what would it be? Would you base it on 50% expenses?

3. With 50% expenses and 14% CAP, the offer price would be ~$526,500 and 12% CAP the offer would be $614,300. Which is a better offer? I am trying to send a reasonable offer than an unintelligent one.

Any help is appreciated.

PS: Some numbers are random to keep anonymity of this property

And welcome to BP

@Julie Beck You will attract the good and the bad .... just make sure you understand what you are getting into .. spend time to read and understand before you spend money .. ask questions here and you will get helpful answers .. Go to local RE meetings and network .. just don't tell everyone that you have money and seeking partners ... Good luck with your investing 

@Robin L. I had started a similar topic a few weeks back ... most of the comments you will hear from RE agents (surprisingly looking after other fellow agents)

Anyways I thought I would do it myself (FSBO) but when I thought about the things I had on my plate, I gave up and started interviewing RE agents. The first day I interviewed 2 agents, I got a call from a buyer (word of mouth), they came after 2 hours, and within 15 min they said they will buy my place at my asking price which was higher than any other condo sold ($500k+) in the complex. I didn't have to spend money on moving out (and de-cluttering), agent commission (which was a wash considering I would have sold it much higher with an agent) plus the buyer is letting us stay for an additional 3 months.

Now granted this doesn't happen often and we upgraded almost everything in our place (remember we didn't do a thing to show to the buyers). The buyer was also knowledgeable and preferred to avoid a buyer's agent. 

So in the end, I ended up doing FSBO and hired an attorney to help me with the transaction.

If the appraised value comes to $179k sale price, you can refinance it at 80% which is ~$143k. With this you can pay back the HML and pocket some of your money ($10k - refinancing cost). Now you will have to determine if the rent will cover the mortgage and have cash flow

@Joe Solkiewicz Send me additional info - pics, rent roll, CAP, any info on deferred maintenance at [email protected]