All Forum Posts by: Jonathan Jewell

Hello all.

I have a question when it comes to buying a commercial property also included is the selling of a cash business and the seller has not kept the best records, and a good portion of the income was left off the books.  If the seller agrees to seller financing, is there a clause out there that would adjust the sales price or payment if the numbers don't add up.  So to keep it real simple, for instance.  Seller is selling a business for $500k,  agrees to take a note for 400k.  Seller claims the business actually takes in $55K year net.  After a year of accurate record keeping the business actually takes in $40k net.   Since the business was purchased with what the seller said the income was and it actually wasn't the case the clause would go into affect and decrease the sale price or monthly payment. To hold the seller accountable for what he stated.  Does such a thing exist?  Has it worked for anyone? or if the note is created and recorded there is no turning back whats done is done.

Any suggestions for this type of situation?  would be most appreciated.  Would hate to walk away from this deal for a number of reasons, I'm trying to make it work and win/win

Thank thank in advance

Jonathan

@Steve Morris  "Ethnic groceries have a high fail rate"  I had no idea about that and that is good info to know.  Because I was actually thinking to marketing to the area Spanish community for one of the vacant units that used to be a Deli and had a new Spanish food / groceries.  I may have rethink that decision.   May I ask, what do you feel is a good rate of return for a commercial prop that needs some work with good long terms tenants?  Thank you for posting

Hello! I am making the transition from Resi to Commercial, and I'm very

excited. I have a question for anyone out there has has purchased

commercial property specifically a small strip mall. Do you guys pay

yourself a salary or are you looking for a set rate of return? To give

you a for instance, I'm in the due diligence process of on a small 7

unit C Class strip mall, that needs some work and upgrades but overall in good shape

with long term tenants that's cash flowing. After all the expenses, and debt service etc,

what should I be realistically looking for income wise? Thank you in

advance.

Found  it its called poly pipe

Pex rules .  But i think parks use something similar to pex but its black. At least the parks o have worked in. Never PVC.

@Lindel Turner   Totally agree with #4.   

Really?  Nobody's got any feedback or suggestions?  I should cut bait and run right?

I'll keep this short and sweet.  Went to see a MHP this morning, got a call from one of my ads, and OH BOY, I have a story to tell..   Met the owner.  The guy is literally getting chopped up from diabetes.  Leg was just amputated just below hip few weeks ago.   Wants all cash, asap to pay off bills, set up some trust accounts and prepay funeral expenses.  The reason why I'm telling you all this, is because I asked if he could hold a note (this was before we met)  So there's no way this guy can hold a note.

Anyway here are the numbers:

Sale price : 866,000

74 spaces, 48 occupied
• No park owned homes
• Has both City water and sewer which is NOT sub metered
• 10 acres +/-
• Paved streets, off street parking
Rent roll, 48 x $275 x 12 mo. = $158,400
Expenses from what the owner has down is $62,809
.NOI $95,591

Owner showed me past 24 month bank statements.  These residents pay on time, this guy from what residents tell me is a tyrant when it comes to lot rent.

OK, now here is the REAL ugly part.  The park is HORRENDOUS.  Literally its something out of a horror movie.  Every single trailer except for 3 are dilapidated, or falling apart in some way.  It's like a third world shanty town.  Dog and dog **** everywhere, cars parted out and just sitting on the lawns. The street is the original paved street from 1980, When I was there there were a group of ppl ripping apart a trailer for "tonights bonfire" I mean I could go on and on just use your imagination.

So my question is.  What would you do?  Run, and say thanks but no thanks.   Hit em with a way lower price and say get with reality.  This place seems like it needs 500k in upgrades.  Lets sat he takes a lower price deal, these folks seem pretty happy with how they are living.  Spoke with a few, they love the place especially the low lot rent that includes everything.  I'm assuming if I start fixing up and the place, and implementing some new rules.  95% of these people will roll on out. Then I have zero income coming in.

Thoughts?

@Jillian Sidoti  Hi Jillian, no its wasnt you who I spoke with. It may not of even been your firm it was a few months back.  But thank you for reaching out. I will contact you in next several days and see if we can make something work. 😊

@Drew Shirley.  Ok, thanks for that.  The attorney didn't explain all that like you just did, so now I have a better understanding of it of the mechanics and process.  One last question for anyone that wants to jump in.  I have several apartment buildings in my area that I would like to target for purchase.  None of them are for sale, but want to start knocking on doors and forming relationships with the owners, and down the line maybe have some of these under contract.  Should I or can I start the process of syndication now, and when all set up solicit for money, not have a deal yet?   It goes to what you said "Oh and hurry up because we want to close."   or is each syndication property specific?