All Forum Posts by: Geoff S.

I've found a 3 family property in a decent part of a working class town. It is in excellent shape and owner occupied by an eighty year old couple. They want to sell and eventually move on. They hope to move into a a retirement community after the sale and after finding an acceptable place. This couple has maintained and managed this place with good quality material, equipment, workmanship and as good landlords. All three units have separate utilities with other two tenants paying their own way with electric and heat as well as with market rents.

The numbers all work and I will be making them an offer. What I am not sure of is how to make the offer with the possibility of them staying on for some time say six months or so. I would love for them to stay as long as possible since they know the property and the tenants. Should I just make the offer as though they were just any other tenants in the building and secure a month to month lease or make their stay part of the deal. Does buying an option on the property and closing when they decide to move make sense ? Maybe I'm making more of this than I need too, any advice?

Follow up on property inspections and meeting with equity firm rep.

While it was great making the connection with the rep it was pretty obvious from the start that these units did not fit my criteria as worthwhile investments . The occupied units, though paying market rents, were bleeding the firm with various utility costs (ie. $11k in fuel expenses last year on a 3 unit, 5 BR building grossing $27k. Though they were making improvements on some of the buildings most were in very bad condition and were getting mostly superficial makeovers. All were liabilities in my book.

I chalked up the time spent as a learning experience and moved on. Found a great mixed use property in the afternoon and am currently negotiating with owners.

@Justin Przybylski Good advice from@Karen Margrave. Also, network,network, and more network. Get to local real estate meetings in your area, put yourself out there. I can't say enough about taking the time to dig through this forum as well, educate yourself with the wealth of info found here. When you have a good understanding of your RE interests and goals, start making calls to listing agents, private sellers, lenders, property managers, tax assessors, town road crews, water/sewer departments, etc, etc.Talk to them, not just about the property you may have called about but general info pertaining to their specialty. Pick their brains about the local market, other properties, whats happening in the area, their RE interests, etc,etc. The point is to get yourself out there, be a sponge, soak it all in. If you educate yourself, work hard, treat those you encounter along the way with respect and dignity good things will eventually happen.

Good luck, and remember...... network!

I have been fortunate to connect with a private equity firm this past week. This group buys under performing and non performing debt across the country. After taking procession of a portfolio of assets, they secure the properties, make necessary cap improvements and then resell.

The portfolio being offered consists of 35 units in seven buildings. They have replaced roofs, made energy efficiency updates in the basements and even done substantial rehab work within some of the units. Most of the buildings have 100% occupancy with tenants filed from a respectable PM firm that have been managing the properties. The PM services are available after purchase. I believe leases are all mostly month to month while the existing owner has been holding. The equity firm is also offering very attractive financing.

For those BPer's whom have dealt with purchases from this type of seller, what insights can you provide. Am I missing something? I'm doing normal DD and have yet to find a reason why this isn't a deal to jump on. Numbers are all coming in far better than any comps I've been looking at on the market (12%-14% CR and $120- $150 CF/mo/unit. I can buy as many/few of the buildings being offered.

I am meeting with a rep from the firm tomorrow to inspect the properties and will report what I discover. I would love to hear from some of you savvy BPer's as to what questions you would be asking this guy when I meet him tomorrow. Any comments/advice would be appeciated.

@Mark Forest if you have a large hole to patch you can buy a peel and stick fiberglass reinforced patch that you them mud over. They come in various sizes and allow a strong fix with minimal mud and dry time.

Steve Might Depends on what type of wall you are patching. If it's plaster use a plaster compound. If it's drywall use a quick drying material like Durabond. Both of these are a powder form you mix with water. They dry very quickly to a very "hard finish". Make sure you spread either of these smoothly and evenly to minimize final step because they are much more difficult to sand than drywall mud. Post back if you gave any more questions. Good luck

"Blood Meridian" by Cormac MacCarthy Everything I've read by this guy is fantastic.

Josh, Great post, and very timely. I would hope after seeing and hearing the story of Sgt. First Class Cory Remsburg during the State of the Union speech last night most americans will have a better appreciation for the sacrifice military personnel endure so the rest of us can pursue "the dream" Thank you Cory and all the other military personnel for your service to our country.

Thanks Derek and Nicolas. Agreed, the tenants and leases are where the value is. I am in process of getting actual financials as well as talking with current tenants, previous owners to existing and property manager. Building is adjacent to two court houses so lawyer tenancy makes since but I agree with you Nicolas, they can easily pull out. The city where building is located is considered one of the most depressed economically in the region. One developer though has successful purchased and reinvented some huge mill structures in a viable way and continues to make news with purchases and plans for these buildings. I'm wondering if there may be a ground floor investment opportunity with my building if DD checks out or if the area is still to much of a risk to invest in?

Keep in mind there is a difference between Natural Gas and LPG. You didn't mention how the fuel is supplied.