All Forum Posts by: Christian Mercado

Awesome, I appreciate you guys taking the time to write well written responses to my long questions! It’s really gives me a clearer perspective now. 

Thank you Kirby and Greg! That brings more perspective to me during this process. I have all the right things in place, now to find the deal. 

I’m in DFW... competitive and expensive..would it be wise to start searching outside of my City and even state ? 

Hello,

My partner and I are looking to buy our first complex. Have a few questions.

I have established a relationship with my bank and spoken to them about my goals of purchasing the apartment and they are open to it. 

1. I've reached out to brokers on a few listed complexes. I've noticed some have financials available on their site and some don't. I've noticed some are very open to sharing those and others wants an LOI. Are there any formalities here? Must I send an LOI before I can have the financials to even analyze the deal ? You'd think to not waste anyone's time they freely give those up.

2. I will not be syndicating, but would my complex purchase fall under Strict SEC rules the same as a syndication? I have 2 investors that have been private money for us before on residential,  can they be the down payment if the bank finances the loan and simple as that ? Rehab and refi after a couple years and pay everyone off? 

3. What’s the best way to find deals, are listings and loopnet the stuff everyone passes up ? I’ve heard pocket lists and trying to find the mom and pop owners. 

4.  What’s the best way to find an areas market cap rate in order to make sure the asking price is aligned? I’ve found brokers don’t easily give that info away either 

5. Is it normal for commercial property to sit listed for a year plus ? 

Last one.. 

I've noticed that on Commercial MLS listings that Taxes and Insurance are not included in the expenses NOR their Cap rate listed on the MLS. I recently brought this up to a broker that didn't include the 13k taxes into the NOI and drastically lowered the CAP rate in which I thought, this property is too expensive , which is maybe why it's been sitting a year ? Any input there?

That’s why I’m scratching my head and not making any moves...gotta dig in 

@Michael Ealy Definitely makes sense! Thank you! I will be bringing I my partner on this for sure..my only concern is being 70 miles away from the property as I'm sure it needs more attention than your average flip.

We might go hard money, but need to see if a few things check out first. 

I’m driving, but I’ll check tonight to see everyone’s great input I’m sure. Thank you all! 

Hey y’all, on the financing, this deal was presented to me by a wholesaler so I’m not speaking to the seller myself. Otherwise, I would ask for a creative finance solution. 

Location and details ? 

I have the down payment needed and cash reserves to tackle the project.. I've only been looking at complexes that mostly occupied. I will need bank or HML to cover the rest. but if I'm going to need all cash on this one, might not work for me alone. I have other investors in my network but you're right, definitely going to have to dig way more into this.

Thanks Ronald!

Does anyone know at the top of their head if banks generally lend to 100% vacant commercial properties ? 

I have a good relationship with a small bank who I've only worked with on vacant, I'll reach out and ask. But just curious if anyone has used bank financing or have to go HML due to no financials present ?