All Forum Posts by: Scott Lakas

Thank you! 

What is a normal collection loss (in addition to vacancy) for a standard mobile home park with proper management? How much should I forecast? The region is South Alabama - Middle Income. I have no clue what to expect. Generally, with multifamily, it is 1%-2%, but a self-storage development - I have seen as high as 20%, but 5% is usually typical from my experience. Thanks for the help! 

Investment Info:

Office Space commercial investment investment.

Purchase price: $455,000
Cash invested: $83,000

Purchased another office condominium in Downtown Auburn. This is a speculation deal. However, as a result of purchasing, a friend that is starting a new company and wanted the office space. So, we are doing a partnership agreement and the new company will renovate the space, give me a guaranteed return, in exchange for equity for renovation of the property. The 2,350 SF space has since been gutted.

What made you interested in investing in this type of deal?

Own two office condos in this development.

How did you find this deal and how did you negotiate it?

I was able to get better price due to representing myself versus having a broker. I don't recommend this unless you know what you are doing and have confidence and experience.

How did you finance this deal?

Conventional commercial financing.

How did you add value to the deal?

Currently renovating.

I would tell them that sewer is "waste water" service and that this service cannot be provided without water. So, its a moot point they're making because a sewer sitting there without water is just a pipe. 

@Tyler Dalton Thanks Tyler!

@Dmitriy Fomichenko Thank you!

@Joseph Back Don’t know yet, but would love for you to be involved. Let’s get together again soon.

Investment Info:

Office Space commercial investment investment in Auburn.

Purchase price: $515,000
Cash invested: $103,000

Purchased two office condominium units in Downtown Auburn proximate to Toomer's Corner. There are a total of two tenants and was 100% occupied at the time of sale. This was an off-market transaction and was able to save the seller's money by not being represented by a realtor. I only recommend this approach if you are confident in the valuation. Expected Return on Investments is 10% over a 5- to 10-year holding period.

What made you interested in investing in this type of deal?

Office space is limited proximate Auburn University and the property has a great location with numerous bars and restaurants in direct proximity.

How did you find this deal and how did you negotiate it?

This was an off-market transaction and the owner's were approached about selling the property.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

The sellers had assigned parking spaces that they were personally using and the parking was allocated to the current tenants for an additional fee, as parking in Downtown Auburn is very limited.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

None, but all parties involved were experienced in real estate. The sellers were brokers and developers, and the grantee has extensive commercial valuation experience. This allowed for a non-broker/off-market transaction.

@Joshua Woods You are good to go unless it is really old and starting to revert back to land value. Wouldn’t worry about it at all. Great question and enjoy your new investment!!!

@Nathan Adams Appraisers do not care about permits. Be more concerned with any deferred maintenance that affects the overall soundness and safety of the property. Just always do what the market would do. Did you go and check the permits when you purchased the home? I’m guessing not. But if there are some glaring issues, fix them, same as if you were selling the property. And don’t worry about cosmetics of the house unless it’s bad, because appraisers are supposed to deduct the value for immediate repairs aka deferred maintenance (I.e. brokers windows, broken appliances, leaking roof).