All Forum Posts by: Beverly Meola

@Rich Hupper I might be able to help find you one.

@Joel Owens are you licensed in MA?

That depends on your risk tolerance. If you’re ok shelling out whatever it costs to repair burst pipes or ice dams with all its associated damage or you’re going to rely wholly on insurance or you only plan to hold the property for a very short period of time then use all your capital for investing. Otherwise build yourself a safety net. If you put yourself in a position where you’re holding the property for a long period of time and have no money to keep it up you’ll have a lot of deferred maintenance and an undesirable property.

The most pain in the butt but reliable method is to estimate the life expectancy of your capx items , estimate the cost to replace, then divide the cost to replace by the life expectancy in months and you have your monthly squirrel amount.Did you get a proforma or operating expenses? 

Edit:  BOMA’s EER survey is for office buildings, but the average repairs/maintenance budget is 15% of the total expense budget. So whatever method you use to budget repairs and maintenance outside of monthly/annual service contracts is going to be a guess for the first year unless the seller is willing to share their numbers. After the first year you can adjust or work on reducing maintenance costs.

That's all I've got @Ben Bakhshi .

Maybe during due diligence ask existing tenants if there's something missing nearby that they need.  Also ask them if they would use the crosswalk if you put one in because you'll probably need to hire an engineer for a traffic study to determine what type of signs/signals are needed for the crosswalks.

Coffee shops are always welcome if there isn't one around.

A value add tenant for a professional medical complex might be someone like Quest Diagnostics...someone that does blood work.  Depends on the type of tenants in there now.

The lease should spell out the tenant's pro-rata share of operating expenses, taxes, and insurance and should also spell out how the tenant's pro-rata share is calculated.  If it is in the lease it can never change go up.  So if there is a vacancy, the LL is responsible for the expenses generally assigned to the vacant unit.  

Where it can get fuzzy is the fixed versus variable operating expenses.  Fixed operating expenses will remain the same regardless of occupancy levels (insurance, taxes) and variable operating expenses will fluctuate with occupancy levels (utilities, repairs and maintenance).  If the spaces are not separately metered or with dedicated HVAC then tenants may run the risk of paying for utilities in the vacant space and have to rely management to be responsible for turning off lights and setting HVAC to minimum levels (55 degrees in winter, off or 78 degrees in the summer).  Depending on the operations of other tenants other things could fluctuate like trash, repairs and maintenance, etc.

Bottom line - tenants should be protected in the lease from their share of operating expenses, taxes, and insurance increasing due to a vacancy.  Look under Additional Rent, Operating Expenses, Real Estate Taxes and Insurance clauses.  

Anything over 4 units is considered commercial although I heard an established appraiser say it needs to be over 5 units. Did you apply for a zoning variance to convert the retail space to residential? Your property was mixed used use before you converted. 

@Robyn Coady we use MLSPIN here, do you know the name of the MLS network used out your way? "Comparable access" is a level of membership at MLSPIN. If your license is parked with a broker, and your broker has filed the paperwork with the state, then you'll need your broker's office ID number and their signature to apply for subscription.

That's most likely per month.

Did you retain the existing property management team?