All Forum Posts by: Diem Tran

@Jon Holdman @J Scott  @Roy N.  Thank you!

Hi Everyone,

I understand that the 50% rule is basically, in MF, is the general rule for expenses which includes vacancy, management, trash, etc.  But is it taken from the actually income or potential income or potential market income????

For example,

In a 20 unit apartment building, all one bedroom one bath and pink in color.

18 are rented, 2 vacant.

The 18 that are rented for $500 per month.  But the market rent is actually $550 per month.

Is 50% expenses taken from 18x500 or 20x500 (20 units in total) or 20x$550 (market potential?

Thank you in advance.  

@Joel Owens @Marc M. And btw , this space that we're talking about is on the second floor. It's been vacant for about 2 months. 

@Pavel Sakurets thank you!

@Joel Owens @Marc M. Thank you!  You guys probably saved me from a big mistake.   Here's a more detailed version of the story. Today a leasing agent also called me with a client who wants a space for a tax preparation office.  Without hesitation I turned them down immediately because I already have an existing tenant that does taxes.  What I should of mentioned to you earlier was that there is already another church on the property. They've been there for 5 years and my best tenant, always on time with the rent.  Thus, I assumed that churches were ok. And I was  only  considering another church because I'm thinking that each church has their own members and not in "competition" with each other, like the tax places.   Also, I'm considering selling the property in a few months so  if I don't get another tenant by then, do you think I'll be better off with the space empty rather than having another church in there,  in the eyes of the lender?  If one space is empty,  I'm at 82% occupancy. 

Also, just so I don't leave anything out this time. I'm not sure if this new church is that strong ((financially)) anyways.  The lady told me that they only have 10 members and asked if I could knock down the rent from $1000 per month to $900 per month with a two year lease.  I don't know if this is just a negotiating strategy .  Is this a big red flag but I'm blind as a bat?!?!?? 

PLEASE HELP!  Thank you guys so much!

How would I go about screening prospective commercial tenants? I tried searching this topic on BP but so far, haven't found a discussion. So does it not exist or is it no different than residential tenant screening, where I screen the owner of the business personally?

Today, I spoke to a lady on the phone and she indicated that she wanted to rent the space I have available as a church. If this is a "start-up" than how do I screen? Would I screen them as a person as if she is applying for an apartment since this is a brand new entity?

What if her church is a existing entity? Is there a way to screen business entities to check for evictions or court cases?

Thank you in advance any help. 

How would I go about screening prospective commercial tenants?  I tried searching this topic on BP but so far, haven't found a discussion.  So does it not exist or is it no different than residential tenant screening, where I screen the owner of the business personally?

Today, I spoke to a lady on the phone and she indicated that she wanted to rent the space I have available as a church.  If this is a "start-up" than how do I screen?  Would I screen them as a person as if she is applying for an apartment since this is a brand new entity?

What if her church is a existing entity? Is there a way to screen business entities to check for evictions or court cases?

Thank you in advance any help. 

@Joel Owens Joel, are there any 20 or 30+ MF with separate water meters/bill? I've seen a lot of separate electric meters but not quite sure about water meters. 

@Bill Exeter thank you ,bill! Yes, investment was my intent.  I did not do a thing to rehab the property. I purchased in perfect condition with 8 tenants. And four months later, the property still has the original 8 tenants and is in the same condition when purchased. Thank you!

I was thinking about selling a commercial property that I just bought 4 months ago.  I understand if I sold it before 366 days of ownership, it's a short term capital gain tax. But if I did a 1031 exchange, there wouldn't be a short or long term capital gain, right?

Thank you for any answers to this question.