All Forum Posts by: Joe Hughis

@Bharath Raj - First and foremost, congratulations on your purchase.  Owning the building that you will place your practice in can be financially promising and certainly exciting!  

To answer your questions:

Do I need to notify my acquired tenant regarding the ownership change? 

It would be good to notify your tenant regarding your purchase of the property.  I'm sure they are already aware that the property is up for sale and likely sold.  After all, they were probably present when the appraiser, insurance company, and possibly lender came to inspect.  If nothing else, making a formal introduction that you are the new owner will be great in getting your relationship with your tenant off on the right footing.

Do I need to do a new lease? 

No, you do not.  The lease they have in place still holds and is likely transferred in kind to you.  This is of course presuming the tenant has a long term lease and is not going month-to-month.  If it is the latter, then of course you and the tenant can work out a new lease if both parties so wish.

Do I use a attorney?

Generally, you are not required to use an attorney.  But if you would sleep better at night, then by all means, do so.  After all, it is always a good idea to seek professional advise if you are uncertain about any factors of investment property ownership, tenant laws, tax matters, etc.  

@Fred Johnson - A lot of factors would be involved in determining what the cap rate would be for a particular property.  That being said, you can roughly use a cap of 6.5-7.0 Cap for a retail property on the west side of Plano, Texas.  But again, each property should be looked at on it's own merits.  

@Evan Ventura - Maintaining ones investment properties is a common practice of all good property owners.  To be specific, pest control is a very common line item in expenses for property owners.  Good job on being proactive in your preventative measures.  In the long run, your tenants will be glad to see that you are actively helping maintain their home.  Moreover, it will save you a bundle in the eventual repair work that would be needed if you were to let those carpenter ants and other pests destroy your property.  Cheers!

Hello @Marcus Mathews The SE corridor of Portland, OR still has varying caps for 5+ multi-family that range from 4.7% up to 6.5%.  That being said, if you were just looking to analyze a deal, the larger pocket of properties seems to be hovering between 5-5.5% Cap. Hope this information helps.  

@Gus Alonzo - I'm very familiar with the Los Angeles multifamily and commercial real estate market and it's multi-facets.  Let me know if you have questions and thoughts you want to go over. Cheers.

@Kevin Q. - I wish you the best in building your real estate empire.  Efficient is good.  However, at a certain level you will decide to hire a property management company or you will decide to ramp up your self management and develop your own property management company for your properties.  If it's the former option, then the company you hire should have their own method/software to provide you with in-depth reporting.  

@Kevin Q.  If you are looking to self manage, property management definitely makes things easier to keep track of income and expenses as well as having a means of keeping track of events and tenant info.  

That being said, it is absolutely necessary to have it - the answer is no.  I've befriended and worked with multi-family & commercial real estate owners who have amassed rental units in the thousands and they still utilize spreadsheets and bookkeeping software.  Maybe not the most efficient, but obviously effective for their needs. 

As far as conventional multifamily lenders are concerned,  they will mainly request a 2 year operating history with year to date info included (if it's past the first quarter) and of course the current rent/lease roll.  A summary of income and expenses into specific categories is sufficient for them to to their analysis.   

@Jorge Hernandez - Jorge it seems like there are two factors.  To find multifamily owners, you can develop a working relationship with a title company that can do general farm searches for you.  You can utilize paid services that compile and monitor property ownership info.  Or you can use google to hopefully cross match info to come up with the property owner names and possibly contact info.  

The other factor, which is the more challenging factor, is being able to find multifamily properties that make sense to flip or wholesale.  

Good luck on your searches and cheers to success in real estate investing.  :)

@Ryan Franklin - Yes, I am referring to the agent commission fee as the cost. :) BTW, I forgot to congratulate you on what will be your first CRE purchase. Oh and just a piece of advice, if you can, you should look to close shortly before the end of the month. This is so that subsequent month's rents will belong to you versus the seller. It's a small detail, but one that will leave you with a good feeling when you see income generating quickly from you newly bought property. :)

@Ryan Franklin - Are you representing yourself as the Buyer?  Not sure if you would necessarily need an attorney to look over the PSA (although if it helps you sleep, do it), but I would advise you at least have an experienced commercial agent looking over the terms to make sure nothing is in the contact that could bite you in the rear later.  I know it's an extra cost but I assure you having learned pairs of eyes watching your back will pay for itself in spades.