All Forum Posts by: Daniel D.

Do not put in an offer, you need to start with a non binding letter of intent. In this letter offer a price based on the noi and market cap rate. Include your time line for due diligence and what you intend to include in your due diligence.

You'll negotiate on terms from there. During due diligence in your financial audit prove the noi you used to write your offer price. If you can only prove less than the noi adjust your price according, also take into account and deferred maintenance and the cost associated.

The price you start at will very rarely be the price you close at.

Thank you. I sent in my LOI in based on the NOI and Cap Rate. We will see what happens from here. I also had to be careful with the CoC since i would be getting a loan for this and putting at least 400K down.

Also I based the CAP rate off of the current figures provided to me. Should i be basing it on what the property could make after i take over or what it currently makes?

Thanks

Dan

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Originally posted by @Judy Parker:

Also keep in mind, does the town/city have rent control laws that would prevent you from raising the rents sufficiently?

Thanks for Replying.

This town specifically has Vacancy Decontrol. I have to do more research on that term since i have not heard it before.

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Originally posted by @Brendan F. Nagle:

Not enough info... But some methods to help is NOI/Cap Rate=Sales Price. Another is comps but with commercial comps may be difficult to ascertain. Example would be 110,000 NOI/Cap Rate= 1.8Mil sales Price. But as stated, not enough info. How are the rents under market? Vacancy, Management fees, Onsite management, Do you have all the Expenses? Are any verifiable. Can you run this level of property. How will you finance it? Owner financing? Good luck on your journey.

Brendan,

Thanks for replying.

The $53,000 expense includes all bills, gas, sewer, TAXES, snow removal, landscape, maintenance etc.

Currently they are renting a 2 bedroom apt for example for 1100 dollars. In that area i have a few 3-4 family properties, and the rents are 1500-1600 for a 2 bedroom. So I know for a fact that they can go up easily.

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Hey Everyone,

So i have a dilemma on how much money to offer for this building. I have a person that is selling a 16 unit apt building, in a great town, with low taxes. His family owns over 5-6 million sqft of commercial/industrial real estate so they are not interested in keeping this building any longer.

I am the only one that has seen it and there are no other offers.

These are the stats of the building, the expenses do NOT include a mortgage since the building was bought in cash.

Few things to consider:

1. Rents are about 20-30% below market.
2. There is room to build 1-2 more 1/2 bedroom units.
3. The building is VERY well taken care of, maintenance etc.

Total Yearly Income: 163,000.00
Total Yearly Expenses Including Taxes, maintenance, snow removal etc: 53,000.00 (NOT including mortgage).

If you were to buy this property, how much would you offer for it? The property is in New Jersey (north).

Thanks

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Hey Everyone,

I currently own a few rental properties, mostly 2-3 families. I have another deal coming up soon, but i dont have my own cash for the down payment. However, i do have a person that can give me the down payment money.

My question is, how do i structure this deal?

The property is a a 3 Fam with 2/1 and one store front. So 4 units total.

The selling price is 595K, and since its an investment property for me, i would have to put 25% down. So i have a friend that would lend me the 150K down payment at 4% interest.

My question is how do i structure this deal with a lender, and how do i incorporate my friend in the deal to make this work?

Thanks

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View report

*This link comes directly from our calculators, based on information input by the member who posted.

Let me know what you guys think. Looks like a good deal to me and I have a very good chance to pick this up.

Thanks

Dan

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Thanks for all of your input. Unfortunately, i backed out of this one because the comps were not really comps. The numbers were not adding up so i decided to pass.

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Originally posted by @J Scott:

Originally posted by @Daniel D.:

Originally posted by @J Scott:

Originally posted by @Daniel D.:

Thank you guys.

All i did was email them the offer. I got a reply that it was accepted.

I asked them for 2 weeks to do due diligence. In the mean time i will get a plumber, electrician and the GC to get some estimates to see if my #'s are correct.

Is there a written contract signed by both parties? If not, you do NOT have an accepted offer. Real property contracts cannot be verbal -- they require a written, signed contract with at least several basic terms included. Without that, there is no legally binding, enforceable contract.

Assuming you do have a written contract, it should say in the contract how long you have for inspections and what rights you have with respect to entering/inspecting the property. If this isn't in the contract, you need a new contract.

Scott,

I understand. I am having something written up as i type this. They accepted my offer, i will now send them a LOI to purchase the property and go from there.

Thanks

Why would you send them an LOI when they've already agreed to sell? Send them a contract, and ensure that it's a legally enforceable and valid contract. Better yet, ask to meet them at their house tomorrow morning to sign in person...

Makes sense! Thank you for the tip. Ill see what happens tomorrow morning.

Thanks

Dan

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Originally posted by @J Scott:

Originally posted by @Daniel D.:

Thank you guys.

All i did was email them the offer. I got a reply that it was accepted.

I asked them for 2 weeks to do due diligence. In the mean time i will get a plumber, electrician and the GC to get some estimates to see if my #'s are correct.

Scott,

I understand. I am having something written up as i type this. They accepted my offer, i will now send them a LOI to purchase the property and go from there.

Thanks

0 Votes

All Forum Posts by: Daniel D.

Daniel D. has started 16 posts and replied 74 times.

Post: URGENT Help Needed - How much to offer on a 16 Unit Bldg?

Post: URGENT Help Needed - How much to offer on a 16 Unit Bldg?

Post: URGENT Help Needed - How much to offer on a 16 Unit Bldg?

Post: URGENT Help Needed - How much to offer on a 16 Unit Bldg?

Post: URGENT Help Needed - How much to offer on a 16 Unit Bldg?

Post: How do i purchase an investmen property w/ a borrowed down pmnt.?

Post: [Calc Review] Help me analyze this deal

Post: URGENT AGAIN: Offer Accepted - NOW WHAT?

Post: URGENT AGAIN: Offer Accepted - NOW WHAT?

Post: URGENT AGAIN: Offer Accepted - NOW WHAT?