All Forum Posts by: David Miller

Agreed that obtaining your entitlements needs to be a condition precedent to your obligation to close.  Make sure you understand the scope of entitlements you will need and the timeline necessary to obtain those entitlements and make sure your contract memorializes the same.

@Robert Wiltshire try Real Estate Associates in Durham. They manage a lot of MF assets and have a solid brokerage team.

@Joseph Firmin

#1 The leases should be part of the DD materials that seller delivers to Buyer (or allows Buyer to review) upon execution of the PSA. The PSA usually contains an exhibit with a certified rent roll (which will be updated and recertified at closing) summarizing the tenants, terms, SDs, etc. but the actual leases are not attached. Seller should also provide a rep/warranty when the PSA is signed (which is reaffirmed at closing) that the rent roll is complete and accurate.

#2 Sometimes sellers will provide this type of rent verification, but many will not. buyer should request financial docs (I.e. P&Ls and balance sheets for prior years, year to date and trailing 12 months along with a summary of cap ex for the prior X years, etc.). In MF you typically do not get estoppels from tenants (b/c there are so many and b/c leases often do not require tenants to deliver them and b/c lenders usually do not require them) so you have to rely on seller’s DD docs, seller’s PSA reps and warranties related to the leases and your own DD.

@Russell R. 1031s are "like kind" exchanges and as noted above require you to exchange investment real property for investment real property. A member's LLC ownership interest in a syndication or an ownership interest in a note is considered personal property and does not qualify.

As noted above, you can look at DSTs. You can also explore a TIC ownership with a syndicated LLC in which you and the other LLC each own undivided partial interests in the real estate. In either case, make sure you have competent counsel advising you.

@Jingwen Dunford No. setup a LLC that you control that can go under contract in deals. You typically assign the PSA to the ultimate single purpose purchasing/borrowing entity comprised of your GP/LPs prior to or in connection with closing.

@Account Closed Talk to your legal counsel.  Your loan documents will control what the borrower owes.   This sounds like a modification of existing debt.  

@Rui Zhang Regardless of whether you have a LOI, think of your contract as the roadmap for your transaction. It needs to provide what DD documents/information seller will deliver to you and what due diligence rights you have (ie length of DD period, physical inspections, tenant interviews, environmental testing, etc.)...along with a lot of other terms a competent attorney can assist on

@Pharaoh Mitchell I am one data point and I suspect others on BP may have a different opinion, but wholesaling in commercial real estate is difficult at best. If you want to venture into the CRE space (in any asset class), then associate with a CRE firm or operator and commit to CRE. IMHO, you have to pick residential or commercial, but not both. They are different universes.

@Jillian Sidoti Yes and yes. Spot on.