All Forum Posts by: Account Closed

@Greg Scott This is what I suggested to him. I don't see any harm in asking for rate/term refi.

He definitely does not like debt, nor is he particularly open to seeing things differently which is why I'm trying to get as many perspectives on the matter as I can. 

@Greg Scott Thank you for the reply sir. I think what I'm trying to convey to my dad is the relationship element and how that can potentially be jeopardized if we just hand them most of the money back. Can't seem to properly relay that to him though.

The interest rate is pretty high relative to what it is today unfortunately. Again, our fault for not doing a better job of negotiating the terms early on. I agree with you on taking the funds and investing in another property but I'm dealing with someone who hates loans and places priority on max income from properties.

About a year ago we took out a $2.6M loan for a commercial property. 

Things got really complicated with the deal and construction took much longer than anticipated. This, coupled with a reduction on the price of the property given to us by the seller and the passage of about a year leaves us with needing only a few hundred thousand dollars when we finally closed a few months ago.

Being left with over $2M on the loan, we've been making rather large payments to get rid of the amount in excess of what we need. The bank, however, is not happy and giving us a hard time.

I told my dad that they have a right to be angry because they're making money off the interest; paying the loan back in a matter of months doesn't exactly provide them with a steady stream of income off the loan. He's determined to have it paid off by the end of this month but I can't help but feel that is somewhat disrespectful to the bank. 

On the other hand, I can understand where he is coming from. What's the point of making payments and getting charged interest when we don't need that much of loan anymore. The financing has no pre-payment penalties in place either.

Our fault for not renegotiating the terms of the loan and we definitely did not anticipate things getting so drawn out with the deal. 

Thoughts on being in a situation like this? Is it "wrong" to essentially give them back most of the loan in such a short time?

All CAM charges are reimbursed by the tenant which is indicated in the lease and CCR's. We are the largest parcel owner within the property and the property is not part of a condo association, it's a NNN retail property. Will have to check the monument signage rights, we did get estoppel signed off.

@Jonathan Orr Thank you for the answer! 

I may have misread the CCR's, although in one section it states that "the Declarant (the developer/PM) shall exclusively operate, maintain, and repair the Common Area within the Shopping center."

There's 34 pages to the CCR, however, so I'm sure there is a section that specifies a change in management should a parcel owner choose to opt out that.

Definitely a question for a real estate attorney, I just like coming on here and getting feedback from BP folks.

Is it customary for the developer to also be the property manager? 

Recently closed on a commercial property (part of a larger shopping center development) and the developer of the property is also the property manager. Based on the CCR's, it appears that they manage the entire shopping center and then bill each parcel owner their separate piece of CAM charges and property tax. Also based on the CCR's, it seems like we don't have the option of electing to choose another property manager or manage the property ourselves.

I was just wondering it is this common in these large developments.

@JD Martin had a long talk with them with regards to consistently contacting me over small repairs. I also apologized to them about the fact that the house was not thoroughly inspected prior to them moving in and that I'm doing everything to handle every repair and get everything sorted out. I also told them that they are more than welcome to leave at any time if they're not satisfied with the house, repairmen, and repair work being made.

They assured me they love the house, neighborhood, etc. I got every repair complete and sorted out shortly after this thread and it's been nearly a month and haven't heard a peep from them. House is in excellent condition at this point and they really are taking very good care of the property and they pay rent on time (even early at times). I guess it just took several months to work out all the kinks in the house which I could have avoided if I had gone through the house in more detail prior to them moving in. 

@Frank Chin That was a great story, thanks for sharing! 

As always, I thank all of you for the incredible input you've given me. I've read through every response and internalized many of the principles that you all have spoken about. 

Just to clarify a few things:

The property is in Bakersfield, I live in L.A., so there is no rent control to worry about in this case. The tenants do pay rent on time (sometimes they even pay early) and they do take care of the property (last I checked, I need to stop by again). I don't believe any of the repairs that were/are needed are due to the tenants breaking things, my repairmen would have told me if they had thought foul play was the reason the repairs were needed. 

I had a discussion with them yesterday and told them that based off their never-ending stream of request for repairs (some with are trivial), that clearly they are unhappy with the home, with the individuals making the repairs, and the quality of the repair work being done and that they are welcome to opt out of the lease at any time. They then assured me that they love the home, the neighbors, and neighborhood, and that they didn't mean to come across as being so bothersome. We talked about a few more things so I'll wait and see if the conversation changes anything. 

At this point the entire house is virtually new: entire sprinkler system is new, the electrical system has been completely gone over, the A/C and heater is serviced, from the remodeling by the previous owner all the cabinetry throughout the house is new, stone flooring, paint inside and out, never had any issues with plumbing, roofing, etc. 

@Craig Bellot I've definitely struggled with saying no as I'm not 100% sure as to what I should say no to. On the one hand I try to do my best to put myself in their shoes and see things from their perspective, but on the other hand I look at things very practically. I get that they were mad that the tree cutter left a pile of wood chips, the guy should have cleaned everything before leaving. But on the other hand did it really warrant complaining about it for a week telling me that their kids were getting allergies? They wanted me to call the guy back and have him clean everything (which I did) but that was one situation where I wanted to say "no, you can clean a small pile of wood chips yourself", especially since they're the ones doing the gardening.