All Forum Posts by: Jasmine C.

A $200k remodel on a 1950s East Bay rental with that rent ceiling might be a slow payback, especially if you’re new to managing rehabs. You may want to consider protecting your capital and looking at other opportunities where the numbers work out stronger.  hope that helps

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $925,000
Cash invested: $185,000

mutli family with office spaces.

What made you interested in investing in this type of deal?

I got it at a great price because the seller was running out of time for a 1031 exchange

How did you find this deal and how did you negotiate it?

realtor's network brought it to us off market from a property manager she knew. He was an experienced investor so he didn't want to be represented. there was a lot of back and forth but since we were working with his PM instead of a realtor his PM relayed most of his negotiations. he lost a lot of leverage because he was in DD for his new property that he needed the money from this deal for.

How did you finance this deal?

commercial loan product

How did you add value to the deal?

we had 80% occupancy when purchasing and used our PM to give incentives to fill the rest of the spaces.

What was the outcome?

great reliable cash flow with a low interest rate

Lessons learned? Challenges?

never let anyone know you are doing a 1031 exchange or that you have your next purchase lined up. he lost a lot of negotiation power. although he was an experienced investor his PM did not understand negotiating leverage. since he was too cheap to get representation or get on calls with us more often. His PM spilled the beans on everything without knowing he wasn't helping his client by over communicating

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

agents, lender, pm

Investment Info:

Retail commercial investment investment.

Purchase price: $1,600,000

This property was purchased due to it's stable cash flow and motivated seller. The seller was having problems with his partner and wanted to get out quick. He was a self managing, do it your self type of person who also did not keep good books. This lead to a higher discount.

What made you interested in investing in this type of deal?

The fact that it had strong tenants, newer property, NNN leases, in an amazing area that is in the path of progress.

How did you find this deal and how did you negotiate it?

trusted commercial realtor

How did you finance this deal?

bank loan

How did you add value to the deal?

We will be spending our time extending leases, creating property documents with proof of rental history and stabilized the property. Because of the property is in the path of progress we expect to refinance and pull out all of our initial investment in less than three years. Infinite returns!

Lessons learned? Challenges?

I had a very hard time getting any real documents from the owner. He was not very organized and it was going to take him a lot of time to get everything I needed. He didn't want to do it. He seem to like to talk about himself a lot, so I let him go on for about 25 minutes agreeing with everything he said before I made my ask. He got me the documents by the end of the week. Sometimes people just want you to listen.

Investment Info:

Retail buy & hold investment.

We used the catapult strategy to build my portfolio and add this amazing commercial building into the asset column.

What made you interested in investing in this type of deal?

the seller was motivated to sell at a discounted price due to his need to do use his proceeds on an exchange he was doing.

How did you find this deal and how did you negotiate it?

Our realtor brought it to my attention as a pocket listing.

How did you finance this deal?

bank loan and 1031 exchange funds

How did you add value to the deal?

The property was in great condition and 100% performing. He needed us to close on in 30 days or the deal was off. We had a great relationship with a bank that was able to make that happen even though most banks were averaging 60 days to close. We also found out the tenants were not paying all the rent owed per the lease. The owner self managed and simply forgot to charge them.
We offered to make a few cheap fixes and request they pay what they were expect to pay per the lease.

What was the outcome?

We closed on time, we were able to push up rents because he was not charging everything he was allowed to in the leases increasing our property value by 100K simply by having a few short phone calls with the tenants.

Lessons learned? Challenges?

Biggest lesson learned is to make sure all your ducks are in a row. In commercial a 30 day close in very fast and it is only possible if you have all of your systems and documentation ready to go from day 1. Property management is key to reading leases since commercial leases can be very complicated with CAM's and who is responsible for what.

Investment Info:

Office Space commercial investment investment.

Commercial BRRRR project in the works. Potential to pull all of my money out along with an additional 500K in my pocket once we refinance. TAX FREE!!!

What made you interested in investing in this type of deal?

We specialize in residential and commercial BRRRR projects. The property was prime for that strategy

How did you find this deal and how did you negotiate it?

Pocket listing with realtor

How did you finance this deal?

cash.

How did you add value to the deal?

We did a full rehab and marketed it for rent to specific businesses for maximum value

What was the outcome?

still to come...

Lessons learned? Challenges?

Negotiate seller financing for commercial to account for the hold time and additional cost of rehab. make sure you fully understand the sellers pain points to resolve that issue and try to build a relationship rather than simply trying to negotiate a bottom line. Try to connect with the seller and speak to the realtor less. Patients in commercial is key, fully understanding your holding cost to ensure you will not become motivated was very beneficial on waiting for the right tenant.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My commercial agent is the best in the business. If you don't want to miss anything in the due diligence period you want to work with her. Message me for a referral!

https://www.eventbrite.com/e/134041083489