All Forum Posts by: Shaun Moore

Hi there. I am purchasing a storage unit facility. There are $2,500 of prepaid rents that the sellers are transferring to me. There is also $1,400 in past due rents that they want to deduct from the $2,500. The property has been in an Estate for a while and not properly managed. 

Is this a common arrangement? I feel like I should not have to acquire the debt, and at very least negotiate on it. 

Thanks in advance for your thoughts. 

Thank you, both. @Thomas Leonard, I believe that was the one I was talking about. 

I saw a recommendation of a book, or course of some sort about self storage investing on here a while back. Whoever mentioned it said it had, "things you didn't even know you didn't know about self storage" or something to that effect. Do anyone know what it was? Or do you have any recommendations? 

Thanks 

There's some good stuff on here. Welcome.

@Penny Job - Thanks, will keep you posted

Is anyone in the area interested in getting together in Helena? I've talked to a few of you, and other people off the site that would join us. I'm up for trying to set up at a coffee shop or something like that.

Whether the secondary markets are requiring it or not, some AMCs that appraisers work for do require that they verify all utilities are on and operational at the time of inspection. They should have given you a heads up, but I would get used to doing it.

@Charlie Fitzgerald

Hi Matt,

1- a low appraisal shouldn't hurt or influence future appraisals unless it's the same appraiser who did it again. There is no reason another appraiser should even know what it appraised for unless you share that with them. The sales price would be more likely to influence future appraisals.

I always ask the question, "Why do you believe it is worth more than what you're paying for it?" There are a lot of times really good answers to that and a value higher than the sales price can be supported. If it's a true arms-length transaction though, it more than likely isn't. When doing a loan transaction appraisers appraise Market Value, which says both parties typically motivated, are acting knowledgably and prudently in their own best interest, and assumes the price is not affected by undue stimulus. If all of these are true, why would the property be worth any more that what the sales price is?

My recommendation for future deals would be to tell the appraiser upfront if there is something about the transaction that would warrant a higher value than the sales price. It never hurts to mention it.

And one last thought: in Montana we are a non-disclosure state meaning sales transactions are not public record. If you have data the appraiser doesn't, don't be afraid to share it with them.

@Andrew Meyer

The short answer to that is, "they should". At least the income approach. The secondary markets, most particularly Fannie Mae won't accept an appraisal that relies only on the cost approach. Most banks (and FHA) don't even request this approach anymore unless it's new construction. If the cost approach is relied on, it can't be given more than 49% (last I heard) weight in the final analysis. Income approach can and should be used in an income producing property; the trick to that is that the income approach is directly tied to the sales comparison approach. Still a good and reliable method for valuation though.

Hi Jay,

What sort of cautions you would be careful of in a small market like Helena?