All Forum Posts by: Will G.

currently working a deal in lenoir city, adjacent to knox, my banker insists class c properties should be at least 8% cap, but i have yet to come across anything more than 7ish with needed updates etc. I am aware of a 20 unit property off market if interested.

@David Miller thanks for the reply and yes the agreement does obligate the seller, but they seem to think a quick books type report is sufficient, with just a yearly total of income and expenses, while lenders template has everything broken down by month. I suspect trying to hide vacancies or???

As if this market isin't difficult enough, the car salesman broker on multi I have under contract, wont supply a T12.

Lender emphatically stated he needed the trailing 12 month expense breakdown to move forward on the loan.

Broker says he never heard of a T12 before and just wants to obfuscate with a yearly report.

Any suggestions to promote compliance?

Is requesting a T12 unusual for commercial purchase?

what is your cost per sq ft to build new, including teardown of existing structures? what will it rent for?

@Bjorn Ahlblad that listing showed up as an alert right before I saw your post, wow, what a coincidence that you have been in it!

The o.m. listed a closed comparable @ 2.5% cap rate! 

I bet someone on this thread could explain how that makes any financial sense????

My guess is something like the swiss national bank, along with their 80 billion in us stock purchases, went shopping for some real estate with their freshly printed francs.

 @Bjorn Ahlblad     And here i thought there were no good deals out there....2135 california st in san francisco is being "offered" at a screaming 3.9% cap! (at 30% expenses) and WAY better than the 2.5% cap rate from the listed comp! You guys wanna go in on it? only $16000000,... wait, is that in dollars or? 

full disclosure, this is not a solicitation for a syndication offering, I do NOT want to buy property in s.f. :)

Hmmmmm, how about $300k? This amount would let you purchase a $1millionish property with fannie mae financing($750k minimum amount financed), or a couple of houses, but theoritically cost you 1700 month if it were otherwise off making 7% somewhere.

@John Warren I don't think i have ever witnessed balanced conditions either, maybe just cyclical nature of r.e. or something else, but the trend line for appreciation just keeps up with inflation outside of the big, multi year market swings

@Bill F. my example was somewhat hypothetical but a reality I am currently facing, and no, there were no major shifts in the dynamics, simply baseless optimism and this has been the case across the board in my area. So back to mikes intent(i think), waiting for some possible conditions to exist some point in the future, can be very expensive, and risky.

one concrete example I can give, on why I think re prices cant correct much, was 2010, port st lucie fl, arguably ground zero for the mortgage crisis. I spent my days going through houses (10 a day) to evaluate for purchase or auction. Now this situation was "new" in the collective conscience, people had no idea how long this "crisis" was going to last or what it meant long term, but still there was intense competition for sf assets, which absolutely provided a price floor. Now if next month a major crisis occurs and regular folks stop buying shelter, there will be a large amount of capital  chasing "deals"  and therefore imo keep prices up. Can you imagine, these giant equity funds who won big from the last crisis, will probably be super aggressive if any opportunities arise in the market.  

Thinking back to many years in real estate and having trouble remembering a "normal" market, if it exists, what does it look like? I have heard metrics of 6 months housing supply, 5% interest rates, and sustainable 3-4% home price appreciation, but have you ever seen/lived through a "normal" market?