All Forum Posts by: Eddie Sorrell

Hi BP Team,

I was curious to know those of you who have hired consulting firms for a full self storage feasability study. There looks to be several options out there and I am looking for a trusted source to partner with on the study.

Anyone willing to share their experience?

Thanks!

Thanks for the responses. In order to manage the risk has anyone created two separate agreements? Update the Lease agreement for a fixed term of say 3 years. Then create an option to purchase contract requiring a down payment that is non-refundable? If the tenant comes up with the money within the 3 year time period that down payment goes towards the purchase price we agreed on. If they no longer want to exercise the option after the 3 year period then I would keep the option payment?

I am not sure this is a unique situation, but it is to me with an existing tenant. Early this year, I found out that our tenant was wanting to purchase a home vs. renting long-term. I let them know that I would be open to selling the house they are currently renting from me for a market price if they would be interested in it. Several months go by and we receive an update from the tenant that they are having difficulty buying a house as they do not have the cash to purchase and their beliefs prohibit them from dealing with transactions that involve interest so getting a loan from the bank is out of the question. 

They would like to know if I would be interested in selling the home to them for over a 10 year period that would not involve interest. I think there may be an opportunity here, but hesitant as I am not sure how I would go about structuring the deal. This may also be a bad idea and I can accept that as well, but thought that I would get your thoughts first. 

Just some additional details/concerns/questions below:

- I currently have a mortgage on the property and do not yet own it free and clear

- What is a reasonable down payment that I should request of them 10- 20%? 

- Since I am paying interest on the existing mortgage, do I need to charge a premium for the house in order to make this deal work? Do I continue to charge them rent and add the additional payment for pay down on the house and amortize that over however many years it may take for them to pay the house in full?

- Would I transfer the insurance premiums to the buyer and just be sure that my mortgage company continues to be the mortgagee on the insurance until I pay off the note with my lender?

- What happens if the buyer fails to continue to make payments. What happens to the down payment?

Thanks in advance! Eddie

@John Mocker thanks! Yes I am renting the units out separately 2 residential and 1 commercial.

@Nathan Gesner@Ronald Rohde@James Rey - thanks for the feedback and suggestions. I have an opportunity and some work to do!

Eddie

Team,

I purchased my first commercial property. It is actually a trip-plex with one unit as a storefront. It is currently vacant and requires little cleanup to get ready for rent. I have a sign on the window but have yet to list it on the market as I want to be sure that I understand how to manage this differently than my residential rentals. For example:

1. For a commercial lease, can I use my standard lease agreement with just a few changes?
2. I have read that the tenant is typically more responsible for the general upkeep on the commercial property, is that true?
3. The unit is basically open finished space if a tenant wanted to create a salon or make other major modifications, who would be expected to pay for the modifications.

Thanks in advance for the thought leadership. 

Eddie

Welcome @Tim Grillot looks like you are off to a really great start!

@Kelly A. first of all congrats on your investment properties. I think someone mentioned this already, but you could likely get a commercial HELOC lumping a few of the properties together. Have you tried First National Bank of Grayson? Maybe give Jamanda Thompson or Eric Stinson a shout. I have done a couple of loans with them this past year and they were very helpful.

@Brian Vargas welcome and wishing you the best on your investing. 

@Richard McLain you inspire me and thanks for sharing your story!