Sackets Harbor, NY · Member since 2020 · 35 posts · 4 votes
So I am renting a building for $650/month, the building is for sale. I'm thinking about buying the building and I think I can get it for about $50K. Yes, you read that right. $50,000. I can pay the building in cash, and own it out right. The building is in rough shape but it current functions fine for the current business that's in there. I believe the business I have in there can easily do $275k - $300k in sales a year. I'm going to use a real estate LLC to buy the building and rent it to my current LLC that is in there. I think I can BRRR this place in order to get equity and buy more buildings.
What things should I be looking for when I buy it? I plan on making an offer on the contingency that the building passes inspection.
If running the numbers what should the building be sold for?
I have been learning about CRE for the last year, and this would be my first purchase. I'm trying to buy it before someone else does, and jacks the rent on me.
San Diego, CA · Member since 2020 · 150 posts · 54 votes
5y
Your welcome,
Basically, a cloud on title is any document, claim, unreleased lien, or encumbrance that might invalidate or impair a title to real property or make the title doubtful. Clouds on the title are usually discovered during a title search.
I found that exact definition in Investopedia all the credits are to them, Long story short, you should run a title search before investing in it, especially if you pay cash for it.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
5y
The net financial benefit should be positive over like a 10 year period as long as you don't lose focus on your business because of maintenance and repairs.
In addition to a good title search like Claudio mentions, I like to call the city and make sure there aren't any actions pending against the property or changes in zoning, allowable uses, etc. Those and utility bills won't show on a title report.
Sackets Harbor, NY · Member since 2020 · 35 posts · 4 votes
5y
@Steve Vaughan the great part about the property is I’m buying it from a government development agency. So they did die diligence before they bought it. They just sent me the environmental assessment they had done on the property about 3 years ago.