All Forum Posts by: Dave Wittnauer

 Thanks - great info.  I've called the bank and am waiting on a reply to find out if that's possible. 

 Thanks.  I don't know if I know what I'm doing, but I am trying to fake it for now :-)

The property is definitely weighing on me. This isn't a field I have ever been part of and to jump into a building with a bunch of tenants, etc.. has been overwhelming and continues to be. I didn't know I was inheriting this property and had never even visited it before. It was a sudden, and unexpected death and I didn't have keys, had never met a tenant before. I went from living my life with my wife and kids to this building, an LLC, and a tough time.

It probably sounds crazy, but I just want to get back to spending time with my family.  We went away this summer and I spent the whole vacation worried that something would happen and I'd have to return.  

 I have to sign on for 6 months with them to get access to the list and I'm not prepared to do that yet.  

 Thanks for the message.  If I pay the manager 10%, and am still paying for repairs, etc. as they arise, I'm not really in an advantageous financial position.  

There's a high-interest mortgage that I inherited as well.  I could definitely refinance to a better rate, and make more money monthly, but the fees to refinance don't make sense if my goal is to be finished owning the place as soon as possible.  

If you told me I could sell today and be finished owning it, or sell in 6 months and make 200k, I'd sell today.  Money, to me, isn't worth being unhappy.  

I'm wondering if there are any paths to a quick sale in the commercial real estate world?

I've inherited a commercial property and have been dealing with it for the last year and really don't enjoy it.  My family has decided it is time for the place to go - the sooner the better.  It's cash flow positive and is a great building for someone to own.  I don't live near the property and  I resent the time it takes monthly to deal with it.  I realize I could farm some of that out to a property manager, but I just want to be done with it.  

I've spoken to a few realtors and they have each given me a price point of 1.25-1.45 million.  They have also told me that it would typically take 6 months to a year to complete the sale with the inspection period, time on the market, etc...  I don't want to own the property for the next year.  

Are there places that I can list the property or advertise, without a realtor, for a quick sale, knowing I would be offering a discount in exchange for a rapid settlement?  If I reduced the price to 1million, it would be almost a 10% cap rate, with leases in place, and the ability to expand and double the square footage if desired.  I feel like that's a lot of upsides and I should be able to find the right buyer, but I don't know how to do it.  This isn't my passion or a field I've ever been part of. 

If I list with a realtor for a discount and pay 100k in fees (commission, taxes, closing, deed, etc.) then it just hurts my ability to walk away since there is a mortgage left on the property, though much less than either asking price.  

This is the long way of asking - is there a place to sell by the owner and offer a discount for a quick settlement, if maximizing my cash return isn't my first priority?

I've asked a few questions about a building that I've inherited from my Uncle.  The property is located about an hour from where I live and while I've tried to make it work, it is really a hassle for me anytime something needs to be done and due to the remaining note on the property, I can't justify a property manager. 

I am going to list the property for sale soon.  I also have a vacancy in the building that I'd like to fill but haven't listed yet.  Is it ok to list the space and get a commitment on the lease and then sell the building?  My attorney assures me that leases convey to the new owner and it would make the property much more attractive for purchase if it is full of quality leases/tenants.  I don't want to do anything that would border on unethical with a new tenant and I don't know how this works. 

Thanks,

Dave

I am preparing to sell commercial property that I inherited a couple years ago that is located out of state.  It has really become too time consuming.  I'm hoping to use the proceeds to fund the purchase of something closer to home.  The way the leases are setup as a non triple net situation in a multi-tenant commercial building means that I field a ton of calls and things that I consider routine, but they fall to me.  If I continue to pay someone to do light maintenance, or hire a property management group, it doesn't make financial sense to hold as there are too many other opportunities.  

I can take the cap rate of a few different percentages and get an idea of what the building is worth based on cash flow.   It seems like this is most important to an investor since the place would immediately be profitable.  If I tweak that number based on location, future potential, lease quality and price, etc... which all lead to relatively minor changes, is there anything else that I should be thinking of?

I will ultimately sit down with a commercial broker to hash out an agreement, but I'd like to do some research about pricing and have an idea of pricing worked out so it isn't a complete guess when meeting the broker?

I appreciate any tips from the experienced crowd!

Thanks!

I am planning to sell a property soon (it's being inherited from an ailing uncle without kids) and am curious if it's more appealing to sell with fresh leases or with soon to expire leases so the new owner(s) can do what they want with it?

I realize I need to hook up with a real estate agent, etc... but would like to gather some info prior to the meeting to be a bit better informed.  

Thanks!

Thank you both for the great replies.  I have to have an appraisal done to readjust the tax basis and am in line to have that done, but with the COVID crisis going on they are quite backed up and my area still isn't fully open so I don't think it is happening in the near future.  

I'm not sure how to compare CAP rates to another property. This property is all office and no retail ranging from firms to single user. I really don't know about best use. I've never really endeavored (or have been financially able) to be part of this world before so I am working through this in borderline panic mode.

The location is in a fantastic spot downtown in a town a few towns over from me and with ample off street parking, etc...There's a pretty big mortgage payment and there's not much left over month to month...or at least, not enough for me to be happy fielding calls, etc... at all hours and people expecting an immediate response.  I realize that is how things work, but my life really isn't setup to be able to drop things and take care of issues and I don't have any connections in that world.  

I don't know how to figure out the CAP rate without knowing the value of the building, but it had a little over 100k in NOI last year. Without knowing what other places list for cap rate wise, I'm sort of stuck.

I like the idea of speaking with multiple brokers and seeing the quality of discussions that we have.  Should I expect to pay for these discussions until I sign on with someone?

I had an Uncle leave me a property, and an expensive mortgage, after his death a couple months ago.  I am really in over my head.  I have an appointment with a commercial real estate agent early next week to talk about selling, but I am wondering what I should be doing to try and understand the building's value so I know that I am being treated fairly?

I have thought many times over the past couple months about trying to make it work but I really don't have a great deal of patience for dealing with tenants (there are 11) and the calls, questions, etc.... are really driving me nuts.  There isn't enough money left over after expenses each month to afford a property manager and I really don't like being that person.  

The property was purchased in 2006 so a premium was paid.  If someone made enough of a downpayment, I'd think the place was a cash cow for someone.  I'm really not sure though since this isn't my area of expertise.