All Forum Posts by: Percy N.

What size property is this?

For larger properties (100+ units), it is common these days to have some amount "hard" (non-refundable) and no such thing as a "sellers disclosure". The buyer has to do their Due Diligence.

Having said that, well written Commercial RE contracts have a clause about non-performance on the seller's part.

@Shafi Noss, from your question, it seems like you may potentially be confusing topics.

Syndication interests (which are typically units in a LLC and thus securities) cannot be used for a 1031. However, if you have a TIC interest, that may qualify.

A lot will depend on the configuration of the lot (no pun intended....ok maybe a little bit).

Also look into the zoning and building restrictions in your area. Some locales will require a sprinkler system on a 3 story building, which can be very expensive.

Work it out with your PM where they would credit you for it.

Remember, there is also a $5k/employee retention bonus for employees you keep employed in the CARES act from what I understand.

@Daniel Lozowy, the expense ratio can vary quite a bit depending on the size, rents, vintage, etc.

Ask for the actual T12 and compare them to your underwriting.

Were there significant CapEx needs? That may not be reflected on the P&L.

Ask for a Cashflow statement and ideally cross-reference it with the property's bank account.

Of course, having an experienced person take a look at it will help.

Beware of using the selling broker's numbers listed in the Offering Memorandum.

There are also reports available that give you the average expenses in major markets.

@Adam Philpot, as others said, find a better lender and ways to increase NOI.

If it needs work, get an interest-only bridge loan for 2yrs and then refinance (make sure you can) to a longer-term debt.

There are different HUD programs and subsidies available.

These properties have a LURA (Land Use Restrictive Agreement) also lookup LIHTC (Low Income Housing Tax Credit) properties.

This is a niche area with specific requirements and covenants for operations and sale, so make sure you understand what you are getting into.

The best approach would be to base the rent and occupancy projections on a Market Survey of current similar class properties near the hospital.

@Ike Njoku the prices will vary by submarket, class and vintage of property as well. 

Can you provide more details please?

@Jackie Escamilla have you done a title search on the property? Is this the first position loan foreclosing or second? Make sure you understand the foreclosure process in your state. If it has residents, it can take a lot longer and involve lawyers to move them. No bank will finance the property while it is occupied.