All Forum Posts by: Gregory H.

It looks like the property he is referring to is in Lansdale, so like a solid B area. Typically I'm going to defer to local agents when it comes to pricing. Local agents are used to listing things and getting them under contract in 1-2 months at or near asking. In my core areas, I can tell you within $5-10K what something will close at. Many commercial brokers sign a listing agreement, throw it on Loopnet, and since everything in commercial tends to take a long time to sell, they tend to not worry as much about the short term (and they deal with clientele that can be much more aggressive when it comes to contract negotiations & legal headaches). Also, with regional commercial brokers, it depends if you gave them a realistic NOI (meaning does it include property management costs, vacancy, standardized maintenance & repairs, Capex, etc). A lot of times a commercial broker's pricing is going to be determined by taking your NOI & applying a market cap rate put out by firms like CBRE. Additionally, while commercial brokers may have contacts more than just locally, usually when investors are looking regionally or nationally, they are looking in the $2-3M+ range.

@Jay Hinrichs Correct, it's such a disjointed portfolio to sell as a whole (or for a buyer to manage). You have about a third of the properties in two neighborhoods that are two removed from Center City, that depending where they are in the neighborhood MIGHT garner 6-7 caps as they're rapidly gentrifying and will double in the next 5 years assuming the city doesn't kill development through construction taxes and removal of abatements. The rest of the portfolio I would need someone on the ground I trusted 100% and respected in those neighborhoods, because I wouldn't feel comfortable walking those areas with a uniformed police escort ... so comfortably double digit caps there. Much easier ways to make money, my class A suburban stock has appreciated double digits this year, and the equity portfolio is doing even better.

I just ran the entire portfolio on the MLS, owned by Zenith Real Estate, the vast majority of the portfolio was acquired in the past 8 years at a price of around $30K/unit, much of it not in areas that have or will gentrify in the foreseeable future like SW Philly. Only 3 properties go back 25 years. Would need to see the interiors of the units, but I assume they are not in good condition otherwise there would be pictures in the listing. There is a rental portfolio in Chester, PA that is similar in size to this, but fully renovated, also listed by KW Commercial. Also, full service property management runs around 8-10% if it includes everything. If it doesn't include everything, you are going to get nickel & dimed for things like leasing, service calls, eviction management ... things that are quite costly with cheaper units like these. If your goal is to find relatively cheap units in rapidly gentrifying areas, it would be less risky to pick off pieces of this portfolio like the Grays Ferry or Brewerytown neighborhoods.

Is water/sewer a public utility in your town? If so, you want to keep it in your name and pay for it yourself, because the town can lien your property if it is not paid. Just pay for it yourself & pass them the bill to reimburse you.

I just looked it up, this portfolio is scattered throughout some very rough neighborhoods in Philly, most of which I would not consider even walking in. It is being listed by a professional commercial broker, so it does give some legitimacy to the numbers, but unless you know your way around southwest & north philly ... stay away. It is a pretty low cap rate for that risky of areas, which is why they're trying to offer seller finance to convince a non-professional investor to grossly overpay.

Probably extremely overpriced class D real estate, and I'm guessing that "pro forma" is questionable at best. Incredibly savvy investors might be able to properly vet it & manage it to profitability, but those sorts of investors don't need to do seller finance. I'm not saying don't take risks, but you should have some ability to succeed with the risks you take, and you need a few years heavy experience under your belt before doing this. I manage a multimillion dollar portfolio, and I wouldn't get near this thing.

@Simon W. Agents aren't mad at wholesalers. The types of sellers that wholesalers go after typically are extremely uneducated, poor, elderly and/or have serious health complications (many times all of the above). That isn't the target market of any successful real estate agent. I typically won't even bother with any transaction under $250K for that reason, effort per transacted dollar is too low. I do get annoyed when I hear the ever too common tale of a wholesaler convincing an elderly person with serious health complications to part with their most significant asset and making them destitute in the process (or their children / grandchildren losing out on a small inheritance that could mean the difference between them being able to live in an affordable home).

Awesome guy, use him for all 20 of my properties in the philly area, hardest working contractor I've ever met https://gogreenheatingandair.c...

They did not inform you there was an issue. You do not need to reimburse them for the fridge because they disposed of your property without your consent, and the refrigerator will stay with the property after they leave. If they would like a repair or a reimbursement, it must be noted beforehand.

Even long term tenants still usually are only on month to month or annual leases, see when their leases are up and plan to issue notice of non-renewal, then move-in ... or make it a contingency of your offer that one unit is vacant at closing and have the seller deal with it.