All Forum Posts by: Chris Connery

@Ihe O.

I definitely understand the point you’re making.

1) As soon as their grace period is over. Which is the 4th. If they don’t have a legitimate excuse for being late that’s when I’ll send their letter.

2) that really depends on the tenant. There’s been several times where I’ve inherited a tenant on a property I acquired and the first chance they had with me they didn’t pay rent. Those I want to get out. Tenants that treat the property like **** I want out. Habitually late payment tenants are the biggest headache tenants there is. If you have the chance to get them out I would. 

It’s rare that I just want the money, because I know it doesn’t just end there.

Jesus, this is my nightmare. I try to use commercial lenders, typically if the gift money is not secured by the subject property it would be okay. Can you delay closing and go find a commercial lender? this will definitely piss everyone in the deal off. If you have a financing contingency they should have no ability to go after you for damages. If you can take this deal quickly to another lender and give the sellers a preapproval quickly they may very well give you the necessary time. 

Agree with Jason. House hack and get started with 3% down payment. Any family/friends that trust you and will give a reasonable loan to help with a down payment?

I file ASAP because they do take 3-6 months. In my state if you get a favorable ruling from a judge that the tenant will get locked out you have almost a zero percent chance of collecting any of that 6 months of back due rent. Almost as if the judge thinks they are doing you a favor. In fact, even if the back due rent is held in court escrow and you get a favorable ruling, 9/10 times you won’t see any of that money because you “Won”.

@Hai Loc

If I don’t buy it I’ll shoot you the address ; )

I don’t know, I wouldn’t say it’s a long time on the market for a commercial property. 

@Justin Thiesse

I frankly just don’t have the 25% to put down. I would love to just take it to my commercial lender. Yes, it’s would definitely not be the discount of the century. I believe strongly that the property would appraise and I would obviously have that as a condition in the contract.

@Mayer M.

I believe 4 months.

@Hai Loc

Thank you for your imput. Respectfully, I am experienced in commercial property and tenancy and i cant help but think that you may be projecting the issues of your own market unto mine. If the market rate for office space in the town i am buying is $21.00/sq, why would i question that any more? If the vacancy rate in the area for office space of this type is 7% why would I question that any more?

This is not a situation for a ground lease like a Walgreens... This is an office building which could be held by any sort of small company. Remember this is 4600 sq ft. 

@Mayer M.

Why didnt I think of that!? Why not 15?

@Brian Schmelzlen

Thanks for the input Brian. Anything close to a 10% cap is definitely considered good in NJ. Attorneys will definitely be involved and there is Plenty of due diligence left.

@Rigo V.

Thanks for the input. So the tax office apparently had plan to downsize into a smaller office space in Philadelphia. The current owner bought out a smaller CPA firm several months back and has decided they need the larger office space and want to stay. 

As far as the potential for a large vacancy that of course has been on my mind. Conversely, I’m not sure how much more assurance an investor can be given beyond a 5 year lease. Just like any other building you do your best to adapt and move onto the next tenant. I’m counting on the location, demographics of the town and the ability this building has to be converted easily to suit different office space needs.

Came across an office building in my area. The owner and main occupier of 70% of the building is a large tax firm. They had plans to move out of the building a year ago when it was originally put on the market, since then their situation has changed and they plan to stay. They would take it off of the market but are open to offers. Given their profession being Taxes, they obviously see the advantages of seller financing and are more than open to it. According to the broker they would be willing to finance the property for 3 years at 25/yr amortization at 5%. Listing price is $535,000. They will also sign a 5 year lease to alleviate the concerns of any buyer as to the longevity of the largest tenant. The biggest question is down payment. I think I could get a full price offer accepted at a 10% down payment with owner financing. I have a good relationship with the bank that would refinance me out of it. The owner/tenant would agree to a 5 year lease (to help me refi out) at $21.00 sq ft and want to keep their entire 3200 sq ft space $67,000/yr. there are two other tenants that each have 700 sq ft at $21.00/sq ft, 14,700 each. They are long term and plan to stay.

Gross income is $96,000

NOI is $48000

Financing cost to seller annual $33600

I did not want to go through the entire P&L list but Vacancies have been accounted for, as well as cap ex, advertising everything.

This is an office building on a busy street in a good location. Built in 1978 and needs no work. It could be suited to 11 tenants but is fully occupied with only 3 now. The seller financing is what is keeping my interest the most. Expecting 60k out of pocket.

Any thoughts?