All Forum Posts by: Scott Bastarache

Will,

I got an e-mail from Heather and she asked me to post the numbers for the commercial property we are looking at together.

Asking Price: $295,000

Gross Scheduled Rent: $117,312
currently rented 15/16 units

Expenses: $52,500

Vacancy allowance of 2/16 units: $14,664

NOI: $50,148

Debt Service on full asking price: $23,552

Projected Cash Flow: $138 / door

We are not sure of the logistics of trying to obtain this property with no money down. We were also hoping there was a way to work in some cash back in order to build a small reserve for the property. The property is bank owned.

I hope this will give you some info to work with.

Thanks,

Scott

Mike,

Thank you for your reply. I feel we have all the right pieces except for the business plan. We have a business plan specific to what our goals were. When our current plan was written, we never anticipated getting into commercial investing this early, therefore it was never mentioned.

I guess I have home brainstorming and writting to do.

This is the same post as Heathers in Commercial.

Heather is a business partner of mine. If you look in the signature line, we use the same address [REMOVED].

I reposter her questions here because there was 35 views in the commercial post with no replies. I was hoping someone would actually see the post here and reply with some information for us.

Scott

We came across this deal and we're not willing to pass it up. We weren't planning on going into commercial real estate this soon but here we are, trying to learn what we need to to get it done.

16 unit building/ bank owned 15 units currently occupied.
asking price 295k
average current rents 600-650/unit

My question is do any of you know of commercial lenders that do NOT require seasoning with your down payment?

Can you recommend any DPA lenders?

What are the requirements for obtaining a commercial loan?

Thanks,
Scott

The gross rents are $142,800 and it is currently 100% occupied.

Will,

I am wondering if it might be a better deal to figure my offer based on 50% rule and using DPA. If there is enough equity and a willing seller, that may be the better way to go. Like I said, I am new to the major leagues of commercial real estate. Just trying to get some insight from you pros.

This is an apartment building.

Gross rents: $142,800
Expenses: $80,000(includes 5% vacancy rate) derived from APOD
NOI: $62,800 (gross -expenses)
Debt Service : $40,000 (approx)

I don't know when the leases are up. I just saw the property toady and this is in very early stages.
Not sure what you mean by triple net?

I hope I'm looking at this correctly, but I am calculating just over $100/ door with tis 22K.

I found a commercial property for sale with 17 units. Currently it has 100% occupancy. The seller has not listed it with an asking price but has mentioned that there is an assumable loan of $560K @ 5.99% or asking to just make an offer. I have never dealt with assumable loans before. What steps should I be taking to make sure I have all of the legal and clerical things done correctly in order to make the deal happen.

I am leaning toward assuming the loan because I don't have a huge amount of reserves right now to put down and purchase the property outright. After running the numbers with the 560K loan assumed I am happy with the cash flow I see, I just don't know what to do to get the deal done the right way. I don't want to misstep on my first commercial investment.

Any help, thoughts or suggestions would be very appreciated.

I was wondering what some of you guys use to calculate the annual expence for your repairs and maintenance on a property if there is no info given to you to track the history of the property. Does anyone have a formula they use depending on the type of property ( one/two/three family etc.) I am trying to figure out a system that I can accurately come up with a number to insert into a speculated APOD and feel comfortable the number is going to be relatively close. Any help appreciated.

Thanks

I am wondering if anyone have ever done a wholesale where the end buyer was not a cash investor but someone who is just a buyer of the home that will be purchasing conventionally with financing. If so, it leads to a few more questions.:

1) Was it in Massachusetts?
2) Does the end buyer's bank care about the assignment of contract?
3) Were you forced to do a double closing to complete the deal?

Thanks