All Forum Posts by: Kevin OBrien

@Mary M. Seems to be that most lenders would say no to a value-add property. Mary, have you ever had to raise capital to purchase an underperforming property like this?

@Josh C. I like that statement. WHen I talk to these owners, even if they have an occupancy issue, alot of times their response is that they can wait till the occupancy goes up and they are not in a hurry. This motivation seems to be why they sit on these buildings. I would also like to offer $0.00 for a vacant building !

@Lucia Rushton Very good point there. I'm learning from others mistakes hopefully, and making sure the T-12 and rent roll support an offer before trying to get it under contract. Thanks for the reminder there.

@Curt Neider Curt, what would the lowest occupancy be for you as a lender to lend on?

@Greg Dickerson so you are pretty much saying that in your underwriting, you are comparing current NOI's versus projected NOI's based on the local market, then factoring in your minimum profit margin to come up with an offer number. I guess my question is how do you determine how much projected increase in NOI do you want to pay for? Would this be determined by comparable market standards (local occupancy rates) as well? Overpaying is something that I've been told will be more likely for a market like this. Thank you

@Zachary Gwin Have you ever tried to get one of these underperforming properties financed? The seller financing options always sounds like a great option to me, if it could be negotiated. What are your experiences with creative financing options like these?

@Anthony Dooley Good points with the risk associated with offering above the current NOI. In your experience, when you submit an offer with no contingencies and based on the current NOI, it gives you a stronger position in securing the property?

@Bjorn Ahlblad I like the idea that you mentioned about the local market being hot, so there must be some reason that this property is having issues getting stabilized. It definitely warants a deeper dive into the "why". The projections between 50% and 95% occupancy are huge, so I guess we will need to see where the seller would be willing to meet. Thank you for your post. 

As for the "off-market", this property was a pre-foreclosure acquisition that was purchased direct from the owner. 

@Dan Bryskin Thats a very good point, getting a number from the sellers. Great things to look over as well. Do you ever invest in unstabilized properties?

@Zach Rucker Do you focus on a few markets or look where you can have "boots on the ground"?