All Forum Posts by: Dale Shin

I always hear about being different by offering exceptional service, being the one who goes above and beyond, five-star service, something that people will remember and can tell the difference immediately.  I have remote clients from time to time and try to send photos or video of nearby amenities since they cannot come to look at it themselves.  It is extra time, effort and money but will probably pay off in terms of future referrals and business.

I agree with everyone here that the restaurant should be put on a NNN lease so they are responsible for all maintenance, including the hood and any grease trap on the roof. These grease traps really need to be looked at regularly and you'd be surprised that even multi-national large restaurant chains don't have their act together when it comes to this. to ensure this gets done, you may want to specify in the lease that landlord will contract with the vendor for periodic maintenance but tenant is to pay for this cost and is ultimately responsible. You may want to do the same thing with the HVAC.

You can get demos, traffic counts, etc from Costar but that is a very expensive subscription. If the property is for sale by a broker, ask the broker to provide you with this info. A good question to ask would be to see the actual annual expenses to verify the NOI and cap rate. Also, what kind of leases are the tenants on. If the tenants are on triple net (NNN), are they all paying their share of the common area maintenance (CAM) expenses and have they been updated regularly?

Property management fees where I live in LA, CA is generally about 5% of the base rent, meaning the rent only, not the CAM if the tenants are on NNN leases. If they are on NNN, then management becomes a bit easier in that you do not have to go around fixing toilets and every little thing that goes wrong in each tenant's unit. You'd have to read each lease to make sure but that's generally the case. For NNN leases, the landlord has to maintain the common areas, meaning the parking lot (cleaning of it, lighting, repairs, snow removal), sidewalks, trash cans in these areas, landscaping maintenance, the roof of the building, rubbish hauling, exterior building lights. It's not hard, just a learning curve after which it's just regular maintenance.

Hi William,

I used Mojo specifically because I wanted to use their reverse phone number search which is an add-on service after have sign up for their dialer, you can't just sign up for the reverse phone number search.  The reverse phone search didn't really turn up too many numbers, some of which weren't correct either.  I stopped using it because the volume of calls I was doing I am faster just dialing it myself although the CRM system was pretty good.  

as Mike B. stated the seller's agent should now be representing you as well, which means the agent has a fiduciary duty to do his/her best for you.  This can truly be put to the test when it comes to counter offers and negotiating repair items after an inspection.  

You could say to the agent, "Great, as my agent, I look forward to your looking out for my best interests!"  Maybe that will put the agent on notice as well as maybe give him/her second thoughts on allowing you to bring in your own agent.

This kind of thing could be considered a capital expenditure/improvement.  Depending on what kind of lease you have, there may be a provision for how these kinds of expenses could be recaptured.  For instance, I believe the AIR lease calls for capital improvements to be amortized over 12 years and the tenant to pay not more than 1/144 of the cost each month.  

if this does not qualify as a capital expense/improvement, then maybe it could be added as a common area charge and billed through the reconciliation and get it back within a year, that is if the tenant is paying CAM.  

But perhaps it would be best to start with the 3 year amort with interest and see how that flies!  

The extra $18,000 requested seems to be for required relocation fees to be paid to the tenant.  The way I understand it, under LA city rent control notice to vacate can be given to an existing tenant to move out only if the owner (or related family member) intends to occupy the unit.  In that case, the tenant given notice to move out needs to be paid relocation fees depending on a formula of how long they've lived in the unit, how many people, etc.  

If that is the case, it may be your responsibility to give the tenant notice and the relocation fees would come out of your pocket.  So it seems unnecessary to put $18k in escrow for the seller, what's he going to do with that money?

Check out the LA housing department's website for specifics.

The snippets of the lease you mentioned are quite short and not enough to see if it will cover you to do the full investigation on the buyer of the business.  Definitely consult with your attorney, if you have one.  

My experience is in class B and C retail NNN. I haven't seen everything but I have seen commissions on options built into the proposal. I have never seen commissions based on both rent and CAM, just base rent.