All Forum Posts by: Robert Rixer

People very rarely regret holding long term. It may not be how you planned it, but you won't regret it.

There seems to be a lot of speculation in the post and the answers provided can only be speculative in nature given the information. Asking these questions directly to the specific parties involved would be a more efficient use of time.

Good question for ChatGPT

Pretty normal. A non-exclusive means if you find a property on your own or another broker sends it to you, you don't owe commissions to him. If it were an exclusive buyers agreement and insisted on 3% with no contingencies, that is a lot more rare and broker-sided but from the terms you've provided, it appears he's just trying to protect himself from timewasters.

You're going to chase your tail trying to apply cap rates to in-place rents. While this is the correct text book method of doing it, these days seller's are pricing their properties as though all units are at market rent.

The way I like to underwrite these deals is if the retail part was vacant, would the property still cashflow? If the answer is no, then I'm out. My confidence in backfilling Class C retail is low, but that's also because I'm not a specialist in it. May not be the right way to look at it, but it works for me.

Talk to an experienced finance broker. They can see if your situation is well and truly a dealbreaker or not. Usually there is a lot more variation in commercial for what a lender would be willing to take on, you just need to find a lender who is more willing to take a chance on a new operator. Worst case they can give you advice on best positioning yourself to lenders on future deals.

No excuse for poor management from an experienced sponsor. Lower than 90% occupancy in multifamily means asking rent is too high or units are offline (management issue).

Crunching rough numbers you need a significant percentage of depreciation in that first year to offset not only your tax liability but also the income of the property. Look into Cost Segregation and talk to a professional. It allows you to front-load depreciation way faster than the standard 39 year straight line.

Agree with the concept of spending more time searching for deals rather than money. Too many investors these days spend 80% of their time sourcing LP's and little in the way of finding actual value. With that said, you have to have at least some track record to lean upon. Best bet starting out is to partner with a GP who can bring some experience/track record to the table.