@Tom Camarda, I am just finishing up stabilizing my first commercial property in Pittsburgh and it's been a great learning experience. It is a 6-unit in a trendy part of town, and it had only half of the units rented when I bought it. It was completely mismanaged by one of three brothers who inherited it.
I would agree with Arun and Remington, it's a deal by deal approach. In my case, I found it on the MLS and I was trying to do a 1031 exchange so time was of the essence. There were multiple offers, and just ran the numbers of how much I could get for the units, how much I thought repairs would cost (renovations, new roof, etc). With that in hand, I made an offer that was more than was asking price, but got me the property. I might have paid $25k too much, but I'm ok with that since I'm buying for the loan term. It got my foot in the door, completed the 1031 exchange, and into a property I increased the value of by $150k. I plan to keep increasing the income by raising prices next year (rents, parking, laundry), adding storage, and trying to rent extended stay airBnBs (30+ days) to increase my income.
As far as low ball offer goes, I don't know. I've heard a saying in my real estate learning, "Pigs get fat, hogs get slaughtered". The elderly lady could get offended or maybe you have a great rapport. In that case, maybe she's just happy it's going into good hands. Perhaps if she wants to avoid a big tax hit, maybe she would owner finance it? Maybe she doesn't need the income, and would just want a smaller down payment with monthly payments at low/no interest over 100 months? That could go to her heirs which might help her family and reduce her tax burden. Just food for thought.
As far as a commercial loan goes, I hit up most small banks and credit unions. I ended up going with my credit union, but most of the terms were similar: 20% down, 20-year loan resetting every 5 years. The rates were around 5-6%. My credit union was 5.25%. I didn't do it, but some will finance the renovations with you doing draws as the work completes. I believe those estimates had to be done ahead of time. I'm pretty sure this is common. Maybe someone can provide more details on that. I have learned that if you do loans over $750 and have a high occupancy rate, you likely are eligible to do "agency" loans with Fannie or Freddie. Those are lower rates (~4%) and longer-term (I think up to 30 years amortization without resets). Again, I didn't do that, but next year I might as I believe another appraisal would support a loan like that. If I do that, that's truly BRRRRing and I'm on to the next building!
For insurance, I called on a few insurance brokers that did commercial insurance. My consumer/residential insurance agents really didn't understand or flat out didn't do it.
For estimating rents, I use rentometer.com and hear it recommended frequently. It's pretty cool to see what is renting. It's helpful when presenting the ARV to a lender since you don't have a solid rent roll to provide them.
It sounds like your remote. I assume you know the difficulties of that. Don't be surprised if your current residents are not model tenants. My PM was instrumental in helping some of my inherited tenants finding better places for them as their leases expired.
DM me if you need any more info from my experience. I might be able to share some bank names or share how/what I presented to lenders.
Good Luck!
