All Forum Posts by: Chris H.

@Stephen Kehoe Thank you! I’ll look them up tomorrow.

Hello all,

I'm looking for a plumber who can replace galvanize pipes in a 3 story apt building. One side is currently having issues.

Location is Baltimore, MD quiet neighborhood two separate buildings. Need repair work on one side immediately. 

Thanks for your suggestions in advance!

Chris

Hi Michael,

What a great case study & deal! All the moving parts from start to end made this a grand slam investment. I would love to have my own construction/rehab crew in place...that a key element in addition to the seller chasing you down, your vision, due diligence and the fifty other components that went with this deal.

I would hold, evaluate the area(current projects) again along with looking at the current market. Then I would sell...

Good luck onto the next one! 

Please give me your thoughts on the following question:

I'm looking for some thoughts about an possible acquisition.

I’m looking at a value-add deal that has some deferred maintenance, cosmetic & cap ex items. From the original purchase price there might be an $75k reduction price with the offer price to the buyer. The seller is saying at that reduction it will most likely be somewhat of an as-is deal. The sellers have a very small margin from a profit prospective (to include closing, mortgage payoff, prior utility bills, etc) & the $75k discount would be their max of what they could do. It’s an C class property.

What would you do?

Please include thoughts on tax benefits,advantages of buying at a higher price point vs a lower price point & getting a no credits, etc

BTW…There are some expected cap ex items needed such as a roof (either now or within the year, some cosmetic work estimated (25k+ worth), renovating down apt that's partially demo & two vacant apt to turnover. I also plan to refi in a year or so; also expect to boost the NOI from the purchased NOI:

My choices:

1. keep it as is with the $75k reduction & take out a construction loan for the work needed?

2. offer a little higher than the offer price and receive a $25k credit, an $50k reduction in purchase price & take out a construction loan for the work needed?

3. offer a full price offer. Loose the 75k in reduction in purchase price, receive potentially an 75k credit & take out a construction loan for the work needed?

4. Or what would you do?

Thanks for your suggestions/thoughts, etc in advance,

-Chris

Please give me your thoughts on the following question:

 I'm looking for some thoughts about an possible acquisition. 

I’m looking at a value-add deal that has some deferred maintenance, cosmetic & cap ex items. From the original purchase price there might be an $75k reduction price with the offer price to the buyer. The seller is saying at that reduction it will most likely be somewhat of an as-is deal. The sellers have a very small margin from a profit prospective (to include closing, mortgage payoff, prior utility bills, etc) & the $75k discount would be their max of what they could do. It’s an C class property.

What would you do?

Please include thoughts on tax benefits,advantages of buying at a higher price point vs a lower price point & getting a no credits, etc

BTW…There are some expected cap ex items needed such as a roof (either now or within the year, some cosmetic work estimated (25k+ worth), renovating down apt that's partially demo & two vacant apt to turnover. I also plan to refi in a year or so; also expect to boost the NOI from the purchased NOI:

My choices:

1. keep it as is with the $75k reduction & take out a construction loan for the work needed?

2. offer a little higher than the offer price and receive a $25k credit, an $50k reduction in purchase price & take out a construction loan for the work needed?

3. offer a full price offer. Loose the 75k in reduction in purchase price, receive potentially an 75k credit & take out a construction loan for the work needed?

4. Or what would you do?

Thanks for your suggestions/thoughts, etc in advance!

-Chris

Please give me your thoughts on the following question:

 I'm looking for some thoughts about an possible acquisition. 

I’m looking at a value-add deal that has some deferred maintenance, cosmetic & cap ex items. From the original purchase price there might be an $75k reduction price with the offer price to the buyer. The seller is saying at that reduction it will most likely be somewhat of an as-is deal. The sellers have a very small margin from a profit prospective (to include closing, mortgage payoff, prior utility bills, etc) & the $75k discount would be their max of what they could do. It’s an C class property.

What would you do?

Please include thoughts on tax benefits,advantages of buying at a higher price point vs a lower price point & getting a no credits, etc

BTW…There are some expected cap ex items needed such as a roof (either now or within the year, some cosmetic work estimated (25k+ worth), renovating down apt that's partially demo & two vacant apt to turnover. I also plan to refi in a year or so; also expect to boost the NOI from the purchased NOI:

My choices:

1. keep it as is with the $75k reduction & take out a construction loan for the work needed?

2. offer a little higher than the offer price and receive a $25k credit, an $50k reduction in purchase price & take out a construction loan for the work needed?

3. offer a full price offer. Loose the 75k in reduction in purchase price, receive potentially an 75k credit & take out a construction loan for the work needed?

4. Or what would you do?

Thanks for your suggestions/thoughts, etc in advance,

-Chris

To keep things simple Candidate #2 sounds pretty clean. But prepare for tenant replacement & unit turnover within the 1-2 year.

Candidate #1 doesn't seem too bad... no ones perfect. I would ensure my lease agreement is strong and consider collection of a 2nd months rent. But make sure there are no other redflags! 

Don't get "teased" by the I love this neighborhood & want to stay here for a while punchline. They can both leave when their lease agreement expires...or ask for a renewal. 

Always treat your business like a business...and not like a hobby!!