All Forum Posts by: Marc Ramsay

I've got an updated review document and financials for the property for anyone interested. Please send me a message and I'll get them off to you right away.

Thanks,

Marc

Joel;

That's pretty much what I was thinking when I saw it. I am currently dealing with a commercial broker in Cleveland and there has been no talk of upfront fees and such. I am a firm believer in getting paid for work that is done, not on promises. I have never billed anyone upfront for any work I have ever done.

My only exception to that has been on large jobs such as a new roof on one of my buildings where the roofer has asked for a percentage upfront to cover the cost of materials.

Jon:

Point taken.

Thanks.

Marc

I had the following email today which I would guess is a result of my posting on the Marketplace a few days ago. $3000 up front? I don't think so....

Hello Marc

Are you in Cleveland , Ohio OR BC ( Canada ) ??

You have a very good deal -- I can help you Finance
and may not have to give up 50% --ownership ..

Yes--may be higher interest rate --but you can refinance
I can help --in two or three years --once you have stabilized
occupancy over 85 % for consecutive 18 - 24 months.

If you can document -- what I read -- and have good statements
data --to show month to month occupancies and revenues from
2011 and 2012 --as well as P & L -- and tax returns -- I can help.

Is it Free and Clear at this time --your investment of $300,000
can you show the proof ? Is title on your name ?

What is Value at this time -- As Is with 70-75 % occupancy ?

Do you have an Environmental Report and an Engineering Inspection
Report ? Do you have any one prepared an Appraisal --based on
future occupancies --70 % - 80 % ?

I am a Commercial Mortgage Broker --have closed several hotel deals.

I had stopped for several years and now getting back Full Time

I am a retired Civil Engineer --Originally from India --Very Honest.

I am here in Atlanta -- 40 years --went to College at Ohio University
and then Wayne State University -Detroit.

Also --please note that --I will require $3000 deposit --to prepare the
detailed loan package --after I review basic financial data

I feel very comfortable --based on what I have read -- and my lenders
will do the loan --I may get you $500,000 ---or little more

Please reply to -- [REMOVED]

CHAMPAK C SHAH [REMOVED]

Hi Colby;

You can calculate a building's estimated (ProForma) NOI and CAP rate if you know the purchase price, rehab costs, market rents for the area, and all the expected expenses.

I have had to do this with bank owned buildings where they kicked all the tenants out and boarded up the building rather than pay a receiver to manage the property. As long as the place isn't trashed while it's empty these can be good deals. Inspections and due diligence are extremely important!

Cheers,

Marc

Hi Roselynn;

If you're looking into a building that is already occupied (say 80%), you need to look at a couple of different aspects of the condition of the units considering rehab.

First, are the vacant suites rent ready? If not, what's the estimated rehab cost for those suites? How long will the rehab work take?

Second, do the occupied suites require rehab, or are the tenants happy with their current condition?

I have a 44 unit building that I'm currently renovating that is about 55% occupied now. I have been concentrating on getting the vacant units rehabbed and rented out as fast as financially possible to increase cash-flow. I have not done any rehab on occupied suites unless there were health and safety issues, or obvious issues like damaged drywall or leaky plumbing (water is your worst enemy!).

For tenants wanting major renovations I have given them the option of moving into one of the newly renovated suites, however, they will have to pay the higher rents that those suites now get. If they don't want to pay the higher rent, then I will do minor updates to their existing unit like new paint or carpet if it needs it.

This doesn't take into account other rehab that a building may need like roofs, boilers, windows, hot water tanks, common areas, or parking lots. There are so many items that can suck up your rehab funds quickly.

Good luck, and keep us updated on your progress!

Marc

Thanks Joshua.

I took another look through my US Internet connection and it shows just fine. Must be something with my home connection or browser setup.

Marc

There should be a picture of the property imbedded in the posting above but it's not working for some reason. You can see the image at http://www.ramsaydesign.ca/forsale/milverton.jpg if you want have a look.

I have a 47-unit building under contract is in Cleveland, OH, and I am looking for a cash investor who wants to get in for a 50% ownership at $400K, or an outright purchase for $700K. I also have a 90% option as well if the investor wants me to stay on and manage the building.

The Milverton Apartments consist of 47 suites located between South Moreland and Van Aken Blvd. in Cleveland, Ohio. Located within close proximity to the shops at Shaker Square and the RTA Train Station, tenants at the Milverton Apartments can rely on public transportation. Major capital expenditures have been made over the last 5 years including suite renovations, boiler replacement (2011), roof replacement (2009), window replacement (2006), and the installation of new hot water tanks (2011).

Purchased as a distressed property in 2010, the current owners have spent the last 2 years renovating and stabilizing the building. Currently at 75% occupancy and growing, the building is price has been reduced resulting in a 9.5% cap rate based on the actual 2011 results at the current occupancy levels. Once rehab is complete and occupancy reaches a normal stabilized rate of 90%, the capitalization rate increases conservatively to 14.5%. I have based my estimates on $100K worth of rehab to finish off the outstanding unit rehabs, but I'm sure I am way over the required budget. A more accurate rehab estimate will be produced after the inspection in 2 weeks.

Well run buildings in the area are experiencing greater than 90% occupancy, and therefore any new owner able to finish the suite renovations and lease up the facility to 90+% will experience a significant upside in the value of the building, the cash flow, and his/her personal equity in the property. Some of the rents are also below market for the area and a greater return could be expected if rents are brought in line.

The building was built in 1925, has 2 paved parking lots, and had approximately ¾ of the units renovated in the last several years. The building has a concrete foundation, with brick exterior, and wood frame interior. Tenants pay for their own electricity and cooking gas, and the owner pays water/sewer and gas for heating. Units are individually metered for electricity and gas, and are ready for an upgrade to individual heat and hot water in order to have the tenants pay all utilities except sewer/water.

If your are interested and would like more information, please email me at [email protected], or send me a message within BP.

Hi Elliot;

I know of a company near me that specializes in helping Canadians buy into the Atlanta SFH market. They assist with entity structures, buying HUD foreclosures, rehabbing, and hooking the client up with a property manager and tenant. Since they are used to dealing with out of country investors they could be a good resource for you if you're interested. I've heard some good things about their operation. Feel free to PM me and I can pass along a referral if you're interested.

Cheers,

Marc