All Forum Posts by: Zachary Lowe

Real estate is one of those areas where you have an unlimited opportunity to meet very interesting people to say the least.  Thought I'd pass on the following example:

Day 1: emailed seller's realtor asking for any financial information available for review and asked if the motivation behind the sale was known.

Day 2: realtor responded saying he would email me on Day 3 with info.

Day 3: nothing

Day4:  I followed up

Day4: received info and  "I've been overwhelmed" apology.  I had no hard feelings. Also was told "seller not highly motivated" and sellers agent was a partner in the property also.

Day5: I submitted offer.  

Day 5: Sellers agent responds to my email and included all his partners CC'd to which partner A becomes upset with agent for telling me "not highly motivated" etc and would prefer in the future to just say will consider all offers because he is highly motivated and wants out.

Sellers agent responds: "I am not highly motivated to consider this type of offer. I told the prospect on the phone that I did not like this type of offer, but I would pass on to other partners. He continued to “harp” on the phone with wife yelling in background that surely we would be highly motivated since their logic of seller financing was so great"

Now, the reason I am writing this post is because this was an absolute fabrication by the seller's agent.  I have never talked to this person before, our only interaction is listed above.  I can only imagine that parties involved did not realize I was CC'd on their emails.  It really makes me wonder what kind of things are said behind closed doors.

Just thought I'd share.

My numbers say that it'll cash flow fine, even with a mortgage. My fear is that the CAP rate value 80%LTV refinance won't be enough to cover the balloon. It all boils down to what the bank will value the property when it comes time.

All input is appreciated.

I have finally after long years of analysis paralysis  had an offer accepted on a 14 unit.  The seller has agreed to seller financing for a time but now I'm concerned I've offered too much and have no exit strategy. Outline of the deal:

Asking price: 495k

Offer( after back and forths): 360k @ 5% interest only for 36 months seller financing, zero down (offer accepted)

Annual Gross: Potential: 67,260 / Actual: 59,000

NOI: 37,000

Contract was drafted by realtor for me to sign today however I noticed a few errors and declined.  Realtor should be drafting new contract today.

I'm the mean time I've convinced myself I've offered too much. The property is a solid B with long term tenants, low vacancy, new roof.  How comfortable would you be in being able to obtain a cashout refinance to cover the proposed 36 month balloon? 

Do think I've done well, if not how would you approach trying to lower your offer after verbally agreeing on it?

Any and all feedback is most welcome.

Asking 4.2mm.  I understand the point of view.  It's likely to sit for a long time though, we'll see.  I appreciate your feedback, counselor.

After several emails with the sellers realtor regarding a commercial multi-family, they stated the following:

"There is much information (detailed maintenance, tax returns, costs, etc.) that they will be glad to make available during a due diligence period with a contract and a paid deposit."

I'm still very new to all of this, but how do they expect me to realistically establish a valuation without this information to even make an offer to get to the contract phase?

Additionally, I'm assuming "paid deposit" is earnest money, or no?

Of course I could email the realtor back for clarity but I wanted to ask here first because I also interrupted this email as a "start showing us money or stop wasting our time."

Any and all feedback is welcome.

Not sure the rent rates in this case, so this scenario may not be justified, but what if you installed a location for the tenant to smoke outside such as an awning and bench.  It may entice them to use it instead, especially is this is a multifamily with multiple potential smokers.  Avoids eviction process, and makes tenant feel welcomed in spite of their habit.  (If this is a non-trouble-making, pay on time, worth keeping type of tenant.)

@Account Closed  There comes a point thought were capitalism can't support such a low rent rate though. How can a building make a profit when people are living practically free and there is no subsidy?

@Bradley Bogdan  Interesting information.  That's exactly why I asked this question, I didn't realize that there were "tax subsidy" rentals.  It never occurred to me that there are people that do not qualify for Section 8 and live only on SSI.

@Chris Field I would love to do that here.  I think there is potential!  Good luck!

@Account Closed  I forgot to mention it's out of state for me.  It's an area I used to live and plan on moving back to in the future.  

On a side note, in 2008 when I was a police officer in this city I responded to a homicide in the parking lot (drug deal gone bad.)  

I'm looking at a 24 Unit being sold by the local Urban Development. The listing states that the rent is 275/unit.... All units are one bedroom which according to HUD Fair Market Rent is 528.00. I haven't talked to anyone that deals with the property yet, just internet searching information, but I am totally confused by this. Gross is listed as 79,200/ net 59,200 (listings numbers, not mine for sure, but still....) Even if landlord paid all utilities the gross should be 152,064 at Section 8.

Asking price 299k/ last sold 2013 for 170k 

Any thoughts on what may be going on here?  I can't figure out how to accurately do an analysis due to the fact the numbers aren't making sense to me.

Don't destroy me too badly for posting the question without contacting the sellers yet to solve some of the question. I'm actually too confused to attempt talking to anyone who may potentially be involved in this deal to open my mouth.