All Forum Posts by: Paul Post

We in the process of settling this estate where we have inherited 1/6 of a commercial building, and have the opportunity to purchase another 2/6 from our siblings, and I was hoping for some additional help with my next step. We have obtained 2 broker opinions on the property and have settle on an average value of $850K based on these opinions. 50% of the property is owned by another family. On our side, both of our siblings have stated an interest in selling their interest, so it would cost us $283K out of pocket to obtain a 50% interest in the property. The gross rents collected are $4,400 per month for both leases, so our monthly income would be $2,200. Since both leases are triple net, the only expense we would have is insurance and maintenance for the building exterior for which we will set aside $307 / month. I calculate a cap rate of 5.34%, and a cash on cash value of 8.03%. Any thought and opinions on this deal are appreciated.

We have a meeting set with family owning the other 50% for Friday evening to help us evaluate the group we would be partnering with if we go through with the purchase. I am trying to compile a list of questions to ask them without sounding like an inquisition. Keep in mind that this history of ownership has been congenial and informal, maybe some would say unsophisticated in terms of real estate technical standards. Any advice on how to approach this meeting?

From reading and discussions I understand having an operating agreement between the multiple owners is advisable, but the history of ownership never had such a document.  Any advice on how to create one, and how to convince other owners this is a good idea would be very helpful, in addition to any advice on if we are looking at a good deal, or if we should cut bait and run.

Thank you.

Paul

We are further along the process of settling this estate and I was hoping for some additional help with my next step.  We have obtained 2 broker opinions on the property and have settle on an average value of $850K based on these opinions.  50% of the property is owned by another family.  On our side, both of our siblings have stated an interest in selling their interest, so it would  cost us $283K out of pocket to obtain a 50% interest in the property since my wife inherited 1/6 interest.   The gross rents collected are $4,400 per month for both leases, so our monthly income would be $2,200 if we purchase the shares of our 2 siblings.  Since both leases are triple net, the only expense we would have is insurance and maintenance for the building exterior for which we will set aside $307 / month.  So I calculate a cap rate of 5.34%, and a cash on cash value of 8.03%.  Any thought and opinions on this deal are appreciated.  

We have a meeting set with family owning the other 50% for Friday evening to help us evaluate the group we would be partnering with if we go through with the purchase.  I am trying to compile a list of questions to ask them without sounding like an inquisition.  Keep in mind that this history of ownership has been congenial and informal, maybe some would say unsophisticated in terms of real estate technical standards.  Any advice on how to approach this meeting?

We will decide whether or not to proceed with this deal and buy the other siblings shares by Sunday 10/12.

Thank you for reading and your considerate replies.

Paul

Thank you all for chiming in.

My mistake, it must be a trust, as there has been no mention of probate. Yes, I feel fortunate to be connected to the 2 Me.

Not a probate, a will. My brother inlaw is the executor, I'm helping him figure this out. Yes, 2 me, been there?

Greetings, We are inheriting partial interest in a commercial property in east Sacramento. I do not have any experience with commercial real estate. I assume we need to establish a basis of value. Should we seek a brokers opinion of the property, similar to residential properties, or do we need to have it appraised? Are commercial appraisers very expensive? The property is currently leased to an old landmark type of tavern, and to a small take out place that sells hot pocket sandwiches (pasties). Both leases run through 2018, and we feel the rent collected is low for this location. What is a good way to get the leases evaluated? All comments are welcome and appreciated. Very Best, Paul

Greetings, Thank you for your thoughts regarding the use of an LLC & Umbrella coverage. Any thoughts on real estate in Butler County, OH in general, and the deal I am working on specifically? Thanks you. Thank you Bill, for your thoughts. Since I have another full time gig, I am ok with paying a premium for a turn key property. Also, would prefer an A or B type of property for the same reason. Curious what area, and what condition are you managing to find props that meet your criteria.

Greetings, Thank you for your thoughts regarding the use of an LLC & Umbrella coverage. Any thoughts on real estate in Butler County, OH in general, and the deal I am working on specifically? Thanks you.

Hello All, I have been browsing these blogs and posts for a week or two, and this is my first post. I am considering a turn key 1900 square foot SFR in Middletown for apprx $150K. I plan a 20% down payment and https://www.apple.com/iphone-6/tips/expect to rent it for $1400/mo, with 8% pm fees. I have recently formed my own LLC but have received new advice that it may not be needed and using my umbrella would be a better option. Any advice, suggestions or comments are welcome.