All Forum Posts by: Seth Wilson

I didn't write "*****" just to clarify

Surprise expenses.

When people are late to meetings/appointments.

When your vendors don't do what they were explicitly told to do with excruciating detail, then try to tell you that there was a 'miscommunication'. Then they ***** when you demand a reduced cost, then immediately after firing them after paying them.

When things that should work don't (see surprise expenses).

People calling me a slumlord.

The list continues....

Where-a-bouts in Kansas?

Just to close this loop I wanted to follow up on my own question. So I called my attorney to ask him the same question. He told me that it has never made any sense for a client of his to purchase the company that holds the asset, due to a couple of very large reasons;

1. The depreciation schedule does not start fresh. So whatever depreciation that the seller has taken on the property is gone. In this case there would be nothing left as the building was built in 1986.

2. I would be on the hook for any litigation against the property, even if it hasn't been filed yet! If there was an incident 3 years ago and the lawsuit is filled after I purchase the company, I am on the hook for it. This of course would make my insurance sky high.

In conclusion it is a bad deal all around. And I will pass on aquiring the building this way.

Good afternoon,

I have been talking to a property owner for close to a year, made an offer his 12 unit, and it was rejected but now I can do a little better on the offer and I do like the market, the building and the tenants. Long story short, he wants to sell me the business, as opposed to the building, something about getting hit with double taxation and repaying depreciation.

Some more details;

He built it in the mid 1980s and is now in his 70s looking to make life easier on himself, as he manages it. I have no reason to believe he is trying to pull one over on me but it did raise the questions: "Why don't more people do this? And what are the pros and cons of buying the building vs. buying the company that owns it?"

I am having a tough time trying to figure this out but I knew that the collective of BP will get me up to speed!

I will take a look at your investment package if you'd like to PM it to me.

Rob, I would agree with the other posters of this topic to answer your questions. But it seems like you might not be 100% up to speed on how the military housing system works. As having completed 4 years of active duty in the Air Force and another 4 years of Air National Guard time (my current day job for the next 12 years or so), I thought I could help out.

You said; "The military gives a stipend to personnel to live off base and you can report problem military tenants and swift action will be taken as it's the U.S. governments money."

Reporting problem personnel is very true, however, so far as the government's money is not. The Airman will be paid twice a month and included in that pay would be half of their BAH (Basic Allowance for Housing) this is tax free pay, it is then their responsibility to pay their landlord. So don't believe that talking to their 'First Shirt' aka Sergeant will resolve the problem for you and they will just write you a check on the spot, you will still be required to go through the local courts for a legal resolution. Also remember that the military is an part of the government, so there is a lot of bureaucracy and red tape.

The BAH calculator is correct but unless they are married or have children most of the young enlisted are required to live on base. I wouldn't expect anyone under E-3 or E-4 to live off base, and even then they would most likely elect have a roommate. Remember they are 18-21 years old and all of the buffoonery that comes with that age.

In my opinion would wouldn't expect those bases to close anytime soon, especially the Air Force Academy. But the next BRAC is coming in 2015 so we will see...

Finally, I would and do invest in places that I wouldn't necessarily live. But I am an A-class apartment renter.

Well you need to look at the market and the tenant that you are trying to attract. Then go to similar apartments in it's market to see what they are renting for, what amenities are offered, the overall condition of the complex, and what the occupancy is, for a start. Then look at your apartment in question, see what repairs and capex it will need to be like the comparable complexes if not a little better. Finally, bid what needs to be done with contractors, handymen, etc.

Every market and property is different, so looking for the shortcut of 'rules of thumb', which are wildly popular on this site, is really asking for trouble. (unless it is the 50% theory, that is pretty accurate, but still a back-of-the-napkin approach)

Al,

I see an issue with the fact that you only have one bank interested in you/the property. I would either spread a wider net to court these banks or re-evaluate your deal.

Second, it doesn't sound like you have evaluated this deal. There is no way you can make an educated offer without the rent roll and operating statement. Either contact the seller or the agent to get this info, if they are unwilling to release that, see if a intent to purchase would loosen their grip. If not then pass on this property and move on to another one. Trust me you don't want to have to deal with an unmotivated seller.

With commercial property you will probably not get a pre-qual or pre-approval as the loan is dependent on the deal, not 100% on the sponsor as in residential.

So what you need to do:

1. Get the rent roll and operating statement.

2. Think of every single expense that you will be responsible for...trash, water, insurance, electric, capital expenses, etc... this is what you will need to fill in on form that the bank has given you.

3. Make offer

4. Due Diligence

5. More due diligence

6. Ask questions on BP

7. Get Financing

8. Close

9. Get all of the money!

I am sure people will refine what I have written and I encourage it. The only reason I know this is because I filled out those papers for 5 banks last fall and I had financing offers from 2 of those. Let my mistakes and hiccups smooth out the ride for you.

A presto,

Seth

Excuse my ignorance but what is a 'Green Card Inspection'?