All Forum Posts by: Joel Owens

Jack in a perfect world sellers would keep excellent records.

Most smaller properties the sellers self manage and keep poor records or hire a property management company that keeps mediocre reports at best.

Big corporations that own larger properties keep many reports as they understand when it comes time to sell if they want top dollar they will have to show everything and be accurate.

For properties with poor records you simply price in the risk since you can't verify with a lower offer price.If the records turned out to be right returns will be better than expected but if as you suspected there were hidden costs you will still hit your number buying right.

Your competition will be with all of them. A buyer looking at the REO on the street will look at the mountain view one at least for comparison purposes only.

The buyer might like a move in ready but will many times go for the deal where they fix up themselves and build in equity.

Do you WANT to sell or do you HAVE to sell??

An experienced broker ask this question to determine WHY you are selling? If you have low motivation you are likely to keep your head in the sand and just pull your property off the market.

Strong Motivators are job loss,divorce,illness,inheriting an estate,job transfer,having kids and need more space,facing foreclosure.

Weak Motivators are would like to get a nicer home,would like larger space but no specific reason,don't like the neighbors anymore,etc.

You need to determine what your mortgage payoff is and what you need to net after expenses to reach your goals.

A broker/agent will be happy to meet and give you this value and it costs nothing for the initial meeting.

Correct. I am not an agent but a broker and owner of my company and there is a huge difference.

In my state of Georgia you can pass a license test and become an agent.To be a broker you have to go through many more qualifications and put in your time.

The strategy remains the same in that you target a specific audience and test and track.You then become consistent and start getting great results.Most do something once and hope it sticks.

People constantly cycle onto the next greatest thing without giving what they are currently doing a chance to succeed.

No matter what you do if you don't test and track and be consistent you will have mixed results at best.

Now that is over 6 figures in commission for the year off of about a 450 dollar investment.

I do not do 6 figures a month in commission off of 40 dollars a month ad.Just wanted to be clear.

Yes you heard me correctly.Targeted mailing with the correct copy will get you outstanding results.

Targeted marketing will always out pull blanket marketing.

Many small companies make the mistake of getting into the branding type of marketing that huge companies with unlimited pockets employ.

Small companies need to be using Gorilla type marketing to get results with small budgets.

The letter costs 1 cent to print,envelope is about 4 cents,postage 43 cents.Mail up to 80 letters a month.

I will be expanding it soon.

Recently because of Obama and bigger government HUD has undergone many changes.

There are now multiple MMR companies handling different parts of the country with their own set of rules.

On an broker/agent forum I frequent the new system is absolute insanity.It's like coming out with a new computer operating system that has 1,000 bugs in it when the old one was streaming along perfectly.

The brokers and agents are having fits with the new system not recognizing their offers,canceling them,showing active when pending,getting assignments when they are already assigned etc.

All I can tell you is these types of items are simply out of the brokers/agents control.HUD does have owner occupied periods but as an investor you can still submit your offer but it won't be considered until after that time.

Just submit it again.

Depends on the type of structure and whether the tenant is a mom and pop or a credit rated tenant.

Certain credit tenants will have corporate guarantees and very little failure risk. If you own a small strip that is mom and pop dominated your vacancy and turnover will be much higher.

If your space is for a credit rated tenant you pay close attention to the renewals in the lease. The seller will base the asking price upon the CURRENT NOI. If the credit tenants lease is up for renewal and they leave or want excessive TI demands to stay then your FUTURE NOI will go way down.

Once a credit tenant leaves the second or third generational space use for that property will more than likely be at a much lower rent per sq ft basis.

If for instance you are looking at a shopping center and asking is based on current leases of 16 to 18sq ft but lease are coming up for renewal.You know lease were signed 4 years ago and that when resigning the tenants will want the prevailing current market rate of 12 sq ft.

You will base offer on the 12sq not the 16 to 18 it is currently generating.You could also insert a clause that the tenants have to re-up before purchasing at the same rate.

Is the property on a triple net lease or is the landlord responsible for all repairs??

If it is an older building and you are responsible to maintain it and pay taxes it could kill your future cash flow.The point that it is priced that low but has been on the market for a year is a bad sign.

If the numbers are solid and the price is low it shouldn't have been on the market that long.

So for almost 6,000 sq ft of space they pay 1,500 a month?? That would be unheard of where I am at but your are is probably different.

Is the property located on a high traffic corner or near one?? You could demo the building and sell the lot to a corporate company for big money.

Walgreens and CVS will pay about 1 million to 1.2 million for a 1.5 to 2 acre corner location.

If you take the gross income of 18,000 and take away expenses of taxes,ongoing repairs,etc. and you self manage you might be at say 10,000 NOI.10 CAP value would be 100,000k on resale.Take away resale costs and there is not much equity upside in this deal at all.

How much is the current rent under market??Anytime you can improve rent and the cash flow you can improve the sale price upon exit.

So you have the land and the building and multiple exit strategies.Again would have to be there and see it to properly evaluate the deal.

Good luck

Mortgage brokers have a break point where loans of a certain size they will actually have to bring money to the table to do the loan.

In my state of Georgia they have laws on costs not going over a certain amount relative to the loan size including attorneys fees,mortgage broker fees,etc.

The cap makes most small loans a no go with mortgage companies.In that instance a local bank or a direct lender who makes the money servicing the loan etc. will be interested.

I have a buyer buying a tri-plex for 52,000.Only a direct lender would do the loan that was keeping in house.

This doesn't add up.Even if the storage space was 1,500 sq ft to convert to an apartment you would have 4,900 sq ft rented for 1,500 a month.

That would only be 3.67 a sq ft. Industrial and Warehouse space can sometimes tread around that or higher for really large shell spaces but what you are talking about sounds way under market for the rent being charged.

I don't know your area so couldn't give a yae or nay on the deal.