Las Vegas, NV · Member since 2015 · 38 posts · 25 votes
Seller claims 6 of 7 units are rented, but none of the pictures in his listing show a single car in the parking lot. I'd expect no-matter the time of day this shouldn't be the case. Am I paranoid? Should I even waste the 90 minutes it would take to drive out and check out the neighborhood for myself? The deal looks 'okay' but not fantastic if all his numbers are right, which doesn't leave a lot of room for error.
miami, FL · Member since 2015 · 15 posts · 30 votes
8y
Yes, that could be a red flag, although i would still expect one or two cars, it could depend on what times the pictures were take, everyone could be at work or some use the bus.
Why not just drive by a few times one the weekend and late during the evening?
Yes, that could be a red flag, although i would still expect one or two cars, it could depend on what times the pictures were take, everyone could be at work or some use the bus.
Why not just drive by a few times one the weekend and late during the evening?
I guess that's the real solution to this. Maybe I'll just hold off and see if I can find a reason to get up in that area for some other reason.
do you have financials and leases to prove occupancy?
While an empty parking lot isn't a great sign, it's a worse sign that they owner can provide you with nothing to reinforce his claims
That's a great point. I haven't even gotten that far yet.
My broker sent me the listing, and I think after seeing the pictures, my gut is looking for a reason to pass and not waste any more time on this one anyway. If the numbers were fantastic, I'd probably already be in the car to go scope it out in person.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
8y
@Ron Read There's really no other option other than to drive out there. If I went by an apartment complex during the middle of the day and there were zero cars in the parking area...well...I might be super duper happy. I have a bunch of people that work...and they work normal hours...and they use that income to pay rent :-) That said, if these are 3 bedroom/2 bath units you'd probably expect to see something. If they are 1 bedroom/1 bath units it's a little easier to think "hey, everyone is probably working and tenants that ___ rent level likely don't have an extra car". But I think overall people are right thinking that you'd expect to see one car there.
That said, it's better than seeing listing pictures with 10 cars in the parking area. At that point people might not be working, have a bunch of folks crammed into units, etc. So "zero cars" is likely the lesser of two evils. But nothing can really beat driving by the place at 2:00 p.m., 6:00 p.m., 9:00 p.m., and 2:00 a.m.
Let's push all of that to the side for the moment. I would argue that you're probably investing the time to drive out there no matter what. Sure, it's a 3 hour round trip but odds are you'll know if you like the neighborhood/area within 10 minutes of driving around. I could do hours of "research" on the ol' interwebs, build pro-formas, but still end up thinking "yikes" driving through the neighborhood before I even reach the property.
Just search for the best BBQ joint in the town and make a weekend trip out there to eat and drive by the place.
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
8y
Over analyzing one picture........ invest the time to go see the property and the neighborhood in person....its the smart thing to do and the only way you will really know anything
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
8y
I would love to find a vacant multi-family like this. It would give me a clean slate to do another 'creative community', which you can't build up by slowly adding artists, as units become vacant.
Think outside the box and you might find a way to make it more profitable, if it's mostly vacant, than if you deal with present tenants and rents.
Investor · Sarasota, FL · Member since 2016 · 63 posts · 57 votes
8y
Hi @Ron Read, if you proceed with the deal you'll need to have everything verified so the seller won't be able to hide whether the property is fully vacant or not for long. If it's the middle of the working day it may be that everyone is gone and that's why there are no cars in the lot. Also, is there a chance that the tenants are utilizing public transportation?
Before making the trip there I'd recommend using Google streetview to get a better feel for the area, addressing your concerns with the broker, and most importantly obtaining financials to confirm whether the property is vacant or not.
Lastly, something to keep in mind is that tenants often take better care of their car than they do of their unit. So if/when you do see the cars in the lot keep that in mind.
Chicago, IL · Member since 2018 · 22 posts · 12 votes
8y
Cars on the lot doesn't really mean much especially on a smaller building. After a closer examination you can see from the parking lot to the street there are tire marks where cars have gone in/out of the parking lot. So there is activity. Also some units have garbage cans next to them, and there is one garbage can next to the curb. So someone is throwing out trash.
One of my purchases had tons of cars on the parking lot, an RV, a limo and tenants that were low quality. Few years later during business hours you'll be lucky to see 1-2 cars on a 30+ car lot because of high quality working tenants.
Definitely spend the 90 minutes and drive out there, actually spend the whole day out there. Inspect the property, look at the roof, windows and neighborhood. Call other properties with For Rent signs and see how much the going rent is for the area. If you see a tenant, talk to them and ask what the issues are.
Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
8y
@Ron Read Here is another suggestion for you. If your time is really important for you and you don't want to spend time and resources for it, but need eyes on the ground for a quick task, Get on upwork.com (or some other relates sites), hire someone who lives in the area and have them drive , take pics and send them to you. I'm sure you can get someone for less than $50 for this task. I have done it. Works like a charm. Saves you time and give your peace of mind in regards to your concerns. If/When you purchase the property, you can also re-use the same person later ... who knows? I'm sure this will be $50 well spent !!!
@Ron Read Here is another suggestion for you. If your time is really important for you and you don't want to spend time and resources for it, but need eyes on the ground for a quick task, Get on upwork.com (or some other relates sites), hire someone who lives in the area and have them drive , take pics and send them to you. I'm sure you can get someone for less than $50 for this task.
I love this idea. Thanks for the great suggestion!