All Forum Posts by: Frank Jennings

I am considering making an offer on a mixed use property. It has 2 apartments renting for $450 a month each and 1 commercial tenant renting for $2400 a month. The commercial tenant is a chiropractor.  If they leave then the property will lose $1200 a month assuming I take out a commercial loan for 80% Ltv. The lease ends June 1st and they have to notify by March 1st if they want to renew. Not sure what to do. If the chiropractor stays long term, it's a great investment. They leave, it's terrible. The location isn't great (not horrible either) and may be hard to find a new tenant.

Should I make a contingency of 100% occupancy? Closing would be in April. Can I speak to the chiropractor directly to learn of their situation and intentions? Because I want to know about their long term plans 3-5 years into the future.

Thank you.

The gross rental income in 2017 was $31000, which meant 4 of out 9 apartments were vacant. Gross rental income in 2018 was $47,000. 

Yes, I removed the depreciation and interest payment.

I have an apartment building under contract. The owners reported a net operating income of $27,500. This was the NOI listed on the MLS and all the paperwork that they gave me. My lender requested the Schedule E and I just looked at it. For 2018 the net operating income is $21,500. And in 2017 the net operating income is $3500. Can I walk? Should I walk? Should I just base it on the 2018 numbers and find a way to close the gap there?

Hi Danny,

Thank you for the reply. I am not worried about filling it. We were told that it would be 100% filled and with leases, but it turned out they lost one. I am new to this so really my question is it ok to even ask for a concession in this case? Is it common practice to ask for this kind of concession?

I recently put a 9-unit apartment building under contract. It was 100% occupied. Two of the 9 units had a lease, but the other 7 didn't and were month to month. I put a contigency in the offer that all the apartments needed to have leases and also 100% occupancy. Today was the deadline and 1 tenant declined to sign the lease and will now vacate the apartment. The rent was $450/month.

I don't know what to do. Should I ask for a concession in the form of cash at closing?