All Forum Posts by: Edward Salazar

@John Thedford You are correct, but the idea is to repeat this process and make it into a business model, since its more of a niche; I think that there is some opportunity. I already found another warehouse that has been rented for a while and it can be improved.

@John Thedford @Scott Matthew C. Thanks a lot for the great response, and so it seems I am heading in the right direction. Would there be a considerable amount of demand for a leased building like this one? and what do you guys think an enticing CAP rate would be? This way I can come out with a sales price that would incentivize a prospect buyer.

Hi everyone, I just bought a 10,000 sf Warehouse building from a distressed owner and would like to try something out. I did some renovations to it and brought some highly qualified new tenants that pay a lot more than the previous ones. The current tenants pays 6.5 per sq ft/year, whereas the previous paid 4.5 per year.

My questions are:

At the time of me purchasing it, The appraiser gave me an appraised value similar to what i paid for at closing. Would the appraised value increase because of the higher rental returns?

If I want to sell the property fully rented today, would i assess the value and sales price based on the current rentals and cap rate or the "not so many" comparables in the area? What would be an enticing cap rate for an investor? Is there a strong demand for this type of investment? 

 I Appreciate any advice or feedback on this matter.

@Roy N. @Arianne L. @John Thedford @Sam Ally @Chris Martin

Hi everyone, I just bought a 10,000 sf Warehouse building from a distressed owner and would like to try something out. I did some renovations to it and brought some highly qualified new tenants that pay a lot more than the previous ones. The current tenants pays 6.5 per sq ft/year, whereas the previous paid 4.5 per year. 

My question is: If I want to sell the property fully rented, would i assess the value and sales price based on the current rentals and cap rate or the comparables? What would be an enticing cap rate for an investor? Is there a strong demand for this type of investment? At the time of me purchasing it, The appraiser gave me an appraised value similar to what i paid for, would the appraised value increase because of the higher returns? Thanks for any input 

very interesting and cool. I am currently selling construction industry goods from China to Colombia and the USA. I see that you are from Paraguay, do you know if Paraguay offers construction goods, such as Porcelain floors, laminate flooring, kitchens, bathroom fixtures, electrical assemblies, toilets, sinks, etc?

It would be great being able to avoid traveling to china so much, knowing that Paraguay has a comparable quality. Gracias

@Roy N. Thanks a lot for your advice, Very knowledgeable and it just makes sense. I never thought of this unit as I do today, as a business that i am purchasing and not like regular residential. thanks to your awesome advice and the help of many others, I am coming up with a price, that keeps in consideration the money that takes to have the business producing some return, and to pay me for that effort too.  Thanks all and HAPPY NEW YEAR!!

 Hi matt, is not in Orlando, but in Lake wales, FL

Asking price 159,000

Based on what has gone (in the area) pending and leased on the MLS recently: (1) 2 bdrm 2 bath $450, (6) 2 bdrm 1 bath $550 and (1)1 bdrm 1 bath $600 TOTAL 4,350 Potential income.

Repairs: We estimate about 40-50K Dollars to make all the units perfect

it looks like they tried to do some work on it, because there is no carpet, and A/C units need to be placed, needs painting, drywall work, bathrooms, kitchens, electric, etc. 

Good morning Arianne, and thanks for the response and your intention to help me. To answer your questions: 

Asking price 159,000

Based on what has gone (in the area) pending and leased on the MLS recently: (1) 2 bdrm 2 bath $450, (6) 2 bdrm 1 bath $550 and (1)1 bdrm 1 bath $600 TOTAL 4,350 Potential income. Based on this, how do you come up with a number? Do you multiply by 12 months and then use the neighborhood's average Cap Rate % and divide the annual income by it? (this is what makes sense in my head) And if so, how do you find the average cap rate?

Repairs: We estimate about 40-50K Dollars to make all the units perfect

Why is it vacant & when was the last rental: Not sure and the realtor has not picked up the phone, being a holiday and all, but it looks like they tried to do some work on it, because there is no carpet, and A/C units need to be placed, needs painting, drywall work, bathrooms, kitchens, electric, etc. 

Thanks again and I see you are in FL too and you want to wholesale, If you ever come across anything close to Orlando, please let me know. Have a great day

@Angelo C.  @Roy N. @Thomas S.

So in this post most are taking about Income approach, and the fact that the unit is vacant. I want to place an offer either for ALL cash or Some owner financing (he offers to finance, if I place 20%), But still don't have a clear number, since I don't understand how the income approach works. 

The rentals are as follow:

Asking price 159,000

(1) 2 bdrm 2 bath $450, (6) 2 bdrm 1 bath $550 aupnd (1)1 bdrm 1 bath $600 TOTAL 4,350 Potential income. Based on this, how do you come up with a number? Do you multiply by 12 months and then use the neighborhood's average Cap Rate % and divide it? (this is what makes sense in my head) And if so, how do you find the average cap rate? Thanks to all for the amazing responses

 You are right, the unit does not cash flow right now, but the way I am looking at it, is from a potential rent point of view. I am also concerned about the unit being totally vacant, and why so much work has to go into it. The owner of record says, he will finance if buyer places 20% down. Still trying to get a hold of realtor, but being a holiday..