Ever since I move here, I've been eyeing a bunch of commercial real estate Buildings, and learnt it was owned by 1 guy.
Before I was a Realtor, I always thought, one day when this guy decides to liquidate I would like just one of his many units, 3 story buildings on main drag with ample parking.
When I became a Realtor, he started to put 1 or 2 on market, on and off. All overpriced. I started getting Intel from agents and his tenants.
I quickly learnt he doesn't maintain his buildings "well", and has a bad rep as landlord.
Last year there were vacancies, FOR RENT signs popped up like wildflower. He was kicking his tenants out. His reasoning was VACANT COMMERCIAL SELLS BETTER!
He wants $1-3M for his units....OK? for argument sake, its overpriced. our area isn't as developed. There is no comps, bc besides Walmart and lowes, target big box ($1M then) , it just him. All the other building are smaller 3-5 units investors like me. (150-$800k) the 800k is in another township.. Not much activity on this township
So this week, HE PUTS 5 on the market. $1M or $3M.. At about 50% tenanted, and know that most are month to month.
My Intel tells me he has EVERY VOILATION UNDER THE SUN. Hahaha, I'm not surprised
He just listed.. So not a good time to approach him....
My feeling is he has owned it for at least 20 yrs+ and if my feeling is correct, its time to do flat roofs and mechanics on all of them. Maybe the rush to sell?
I know his electrical is no good (Intel)
How would u approach this...
Me thinking let him sit for a few years... And then see... Some of his listing has only sat for 2 yrs...
But this is first time he put almost all on mkt
Updated almost 4 years ago
Sorry my edit was overided: Some already sitting for 2 yrs+
If you are interested in purchasing write an offer. He may reject. He may counter. He may surprise you and accept. In either event he will know that you are interested. If the buildings don't sell and they are still on the market later you can make another offer. It sounds like you are willing to be patient but if you wait a couple years you may very well be dealing with another owner with different motivation. The only way the current owner will know if you are a serious buyer is if you write an offer.
Thank you ;) yes, I'm doing my due diligence now.... Make sure it makes financial sense.
My question is, I guess;
When u meet these sellers that think their property is gold.... How do u bring them back to reality?
You make an offer for what you think the property is worth. An inspection may help. An appraisal may help. You cannot convince anyone to sell, especially at a price considerably lower than they think their property is worth, if they are not motivated. If they wish to sell and your offer is the best one they receive you will know.
I would say that you should approach him and learn why he's trying to sell. Maybe you're dead on about him knowing he needs to repair things drastically and he's over priced. Provided you approach the conversation correctly you can possibly do some educating. Rather than a traditional sale, perhaps this turns into a owner finance deal where he can get his money - down the road - and you get to pick up buildings that have potential and fix them up.
Either way, start conversations and keep the door open by all means. If you plan to wait 2 years you might as well start building a relationship from day 1. 2 years down the road you're the only one he may know that has been actively interested in his properties and giving him helpful information.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing