Purchasing the unit I’m renting
Hey BP! I’m currently living in a 10 unit apartment complex located on direct inter coastal in S. FL. I’ve been interested in buying the unit and have been reaching out to my landlord. He is unsure of what he wants to do and is interested in hearing my offer. He inherited the property a few years back. Unit is outdated. Wondering how I go about approaching him regarding a sale price. Should I have him make an offer first before I do?
@Mike Talbott, I recommend spending some time understanding commercial real estate and how it's valued. It's very different than the residential market. You can have him throw out a price, but you'll have no idea if it's any good. There are a ton of resources here on BP.
@Jaysen Medhurst sorry, I forgot to mention that it it only 1 unit that I’m purchasing within the complex.
It's always better to hear his number first. If he cant come up with a number then you will have to throw one out there. The best way to do this is to talk to him face to face and see what his problems are....such as he cant come up with a price? He cant maintain it? He doesnt have time to rehab?..etc. The best way for you to structure your offer is to create it around solving his issues. If he is unsure if he wants to sell then you need to be delicate. He might not be able to afford it without having a tenant in place. That is where I would start. Do you have a personal relationship with this landlord? Is he the son of the previous owner? Make a connection with him to get him to open up more. If he is unsure about selling, then he has a reason for that. Best of luck, my man!
@Tommy Cangelosi thanks for the response! He is the son of a previous owner. He doesn’t live in the area and has a property manager that I deal with for everything. So face time isn’t really in the cards. I have opened up a line of communication regarding an offer and he’s open but won’t give number cause he’s not sure what it’s worth being that he’s not familiar with the area. Trying to build relations as much as possible without actually being physically present via email/phone.
@Mike Talbott
How did this play out?
Many owners who are not investors have an inflated vision of what their property is worth. There is a high likelihood the number that emerges from him will be wildly high and there is further risk that that number will get locked into his thinking. I personally would do my research, develop comps and offer something at the lower end of that range (or slightly below) and have a ready explanation for why you are offering the amount you are.