All Forum Posts by: Wes Short

Hi all, have a buyer client wanting to get estoppels filled out from all the current tenants of the property they are purchasing, in the due diligence phase right now. Wanted to ask if getting the estoppel signed by each tenant during this phase is common?

Also, wouldn't most leases signed by a tenant transfer over to the new owner? Know this depends on wordage in the lease and will check the leases in place but wanted to see if that is common practice. 

Thanks for any help!

Hi Cameron, great choice in schools, may be a little bias though. 

If you havent already definitely join the Commercial Real Estate Club at IU, they get a lot of good speakers throughout the year that can give you a peek at some career avenues in commercial real estate. 

Also the CRE Workshop is fantastic and gives you great real world experience that is transferable to multiple jobs in CRE.

Additionally, I remember seeing a while back someone on BP had created a list of all the books recommended from the podcast and the amount of times that book had been mentioned. Wish I could say I've read all of them but have read a handful and each one has been super helpful not only in CRE but in business in general.

List of All Books Mentioned on BiggerPockets.com Podcast

It is sometimes shocking how much new management or a buyer being local can affect the performance of a property. Sounds like this is a case where that value add of changing management is very doable

Also, there are a ton of affordable programs both nationally and locally right now that

can pay higher than market rents. Of course that comes with other added management measures but if your considering a quick turn could be a good way to max NOI!

@Chrissy Severance it is sometimes shocking how much new management or a buyer being local can affect the performance of a property. Sounds like this is a case where that value add of changing management is very doable

Also, there are a ton of affordable programs both nationally and locally right now that

can pay higher than market rents. Of course that comes with other added management measures but if your considering a quick turn could be a good way to max NOI!

@Chrissy Severance it is sometimes shocking how much new management or a buyer being local can affect the performance of a property. Sounds like this is a case where that value add of changing management is very doable

Also, there are a ton of affordable programs both nationally and locally right now that

can pay higher than market rents. Of course that comes with other added management measures but if your considering a quick turn could be a good way to max NOI!

@Colleen F. Good idea in combining rooms, saw a property converted from a school to multis and that is what they did to expand the square footage per unit.

Have also heard of a lot of hotel or rentals being converted to condos. Being near a vacation locale those could possibly work. Turns into more of a flip instead of CF but an idea!

@David C.@Ben Leybovich @Satyam Mistry

I would add that many sellers at this time understand the market and are going out aggressive because they know a delta is present in current rents vs what rents could be. Thus pushing down cap rates and trying to account into the price the potential that is already present. This becomes a hard sell to buyers because it isn't actualized yet but its in the price. Some buyers will pay this but some won't.

Have to reminder also that cap rate is suppose to, in a perfect market, represent a correlation of risk vs reward. so finding delta, or having a competitive advantage, can increase your reward compared to risk in certain situations.

Would you agree with that last part Ben?

Hey @Sandy Pathak congrats on making this jump and sounds very exciting, especially being student housing!

Have you been able to wrangle the T12 and rent rolls from the broker yet. Past expenses are what determine most heavily into our determination when underwriting for proforma and analyzing a deal.

Know a lot of experienced investors also have rules of thumb they have developed (like $250/door for cap ex per year) or other round figures to help quickly underwrite. I don't have all of those narrowed down but would be interested if anyone shares those kind of numbers. 

But yea T12 would be really helpful.

@Tanner Kenneth Jenkins hi tanner in a similar situation and exploring all the options. What’s been really helpful for me is finding a local bank that can help explain all the options

Know some banks have loan products that are 10% down but not fha so less regulations.

@Alex Ballesteros hey Alex, very true a lot of people from the coasts have found indy attractive for a wide variety of reasons.

Cheaper than coastal markets, better cash flow, you get less appreciation but more stability depending on the property. Also, indy has seen a 9% rental growth in past year so that is a good indication as well!

I work in 5-50 unit multi range as a broker and would love to chat more if your interested.