All Forum Posts by: Henri Meli

@Walter Ellis ... Just reach out to lenders. Start locally, as the lenders will be able to quickly assess the asset. 

Congrats on performing value-add and Good Luck.

@Account Closed If you have access to millions (that's the impression I have from reading your previous post), then you should definitely consider value Add investing via forced appreciation. You would need the expertise to understand how to buy undervalue, increase NOI and exit/refinance.

@John H. The value of a deal really depends on your goal and your business plan. 

If your goal is to sell (or refinance) it in xxx number of years at yyy price, then you need a business plan on how you will increase income and lower expenses ( grow NOI to justify the exit/refinance price).

If your goal is to get cashflow every month, then you also need a business plan on how you plan to deal with tenant acquisition/retention and day to day management to keep the cashflow you intend to get.

@Kyle Mitchell I don't believe that providing bank statements is a requirement. So, why should he/she? If there is no law that forces him to do so, why should he? 

@Frank Jones  Last time I checked, Mortgage brokers don't do loans. Banks decide on loans. There is plenty of loan options out there. Always shop around. Is the current owner have a loan on the property? If so, which bank is he using? You can easily find it out online.

Good Luck

@John Lee. You will need to be able to understand specific terminology for the commercial space such as NOI, Income, Expenses, Cap rates to be able to understand how such assets are valued (in general).

Buying a 5+ units is like buying a business. A good deal depends on a lot of factors. And you are the one who knows the importance of each of these factors to your overall goals. 

Some buy for cashflow (meaning, they want a certain amount of money remaining after they have collected income and pay all their expenses).

Others buy for value-add. Meaning, monthly cashflow is less important. What's important to them is that they can grow the value quickly through well established strategies such as rent increases, amenities improvements/additional, ...

There is plenty of blogs on this site about those. 

@Mark S. . We do have monthly meetings in the RDU area. You can come and meet investors in the area.

@Anders Jax .  @Joel Owens . Interesting.  Never heard of this. Can you elaborate more?

@Cody Elliott . If this is in the RDU area, then the rents are definitely lower. But it also depends on the quality of the amenities and the last time they were upgraded. It seems to me that if the building is from the 1940s and with lots of deferred maintenance, then you should look at a good amount of $$$ to upgrade them, so that you can charge market rent. I recently analyzed a similar property in Chatham county. 

@Jorjio Hopkins provided you with a great approach to determine what you should pay. 

Honestly, $100k per unit is too high for the RDU area, especially for a property this age. Also, why are two units not being rented, if the property is selling at pro forma?

@David Ronka Commercial is a different beast all together. Your comps here would be the square footage price on how much you would ask for NNN leases. What if you buy and the place remain empty for a while, which is very possible for specialized commercial spaces. You would need a leasing agent to be able to market the space to their lists. I would be hesitant to jump into it without consulting with a local broker.