Curious

10 Replies

What and Why would someone sell two 4 plexes at the same time. I just can't seem to connect the dots. They are old, I drove by them they look to be in good shape. Not bad cash flow from my guess on the numbers they posted. I would just think sell one keep one but why sell both at same time and realtor says owner does not want to split them up. Do you think that I am missing something that I should think about in the future for when I come across this stuff again. I just want to know. What do you think?

I would guess they are selling both properties at the same time in order to buy a larger property through a 1031.

Alex Hart, Hart Management Group, LLC

There could be multiple reasons.  Sometimes landlords just want t get out of landlording.

415‑779‑2155

Thats a good point @Ned Carey and @Alex Hart the 1031 I am not familiar with yet. And I never thought of it that way I was just stunned that someone wanted to sell both at same time. I go with my gut usually and something just felt off about the situation.

I go with my gut usually and something just felt off about the situation.

Your gut may need some fine tuning which will come as you learn more. but if your gut is telling you something, try to understand exactly what it is telling you. It is usually right.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Originally posted by @Jon Mccarthy :

What and Why would someone sell two 4 plexes at the same time. I just can't seem to connect the dots. They are old, I drove by them they look to be in good shape. Not bad cash flow from my guess on the numbers they posted. I would just think sell one keep one but why sell both at same time and realtor says owner does not want to split them up. Do you think that I am missing something that I should think about in the future for when I come across this stuff again. I just want to know. What do you think?

Jon - I had no trouble understanding this post at all :)

If you check, I bet you'll find that these two properties are on the same note (it's called blanket note).  Both were used, or, I should say, the equity represented by both properties, was used to collateralize the loan.  If one of the properties were to be sold, the bank may not be satisfied with its' collateral position with the other property. 

So - the seller likely does need to raise some capital.  They might very well be satisfied to sell just one and keep the other, but not the bank.  That's likely why both are being sold...

Hope this helps.  Good luck, Jon!

I think the guy realizes that these are haunted houses and hasnt told you.

@Jon Mccarthy Are you curious because you're only interested in purchasing one of the properties or is it just for education purposes?  There are so many reasons the owner may want to sell both properties:

  • The properties may be on the same note
  • The owner may be using a 1031 exchange strategy
  • The owner may just want to liquidate all @ once rather than spread it out w/ multiple transactions.  We see this quite often w/ investors that have determined it's time to get out & if possible they look to liquidate it all @ once.

Probably a dozen other reasons to speculate why he's doing it.  

I am just curious for educational purposes. I was really interested in one of the properties but with them both tied up in to one I couldn't afford them.