All Forum Posts by: Ibrahim Hughes

Thanks Bryan. I'm assuming you're talking about the gross rent *before* the vacancy is factored in, correct?

Thanks Scott. So when a seller advertises "10% CAP rate" and then sends you an income and expense sheet that omits the vacancy and management fee, can that really be considered a 10 cap?

Greetings everyone:

When analyzing commercial property and I receive the income and expense sheet from the realtor or owner, it rarely includes the vacancy rates and management fee. Should I include this (3-5% for vacancy and 5% for mgmt. fee) in their in order to calculate the true CAP rates and thus the value? I feel that their stated CAP rates and values are overstated if they are leaving out these two important 'expenses'.

IMO, this won't amount to much once the title co. sees that he is the Exec. AND sole beneficiary of a death bed will where no attorney was present. It SCREAMS a lawsuit if you ask me. The title co. will likely want the consent of all heirs via deed in order for the deal to close.

Don - In TX a deceased person can't be foreclosed on? Interesting. He/She definitely can in NJ.

Also in NJ, upon death, the beneficiaries are owners of the property. Yes the estate has to be probated for them to convey the property but they are automatically owners upon death.

Have you checked with the Son to find out how his siblings felt about the will? They may want nothing to do with the property. I've seen it go both ways. I've seen siblings come out of the woodwork when they wouldn't lift a finger to help Mom or maintain the property when she was alive. And I've seen siblings detach themselves from the property before and after the parent's death.

Whatever the case, the title co. will make the ultimate decision as to what's needed for you to gain marketable title.They may accept the will or ask that all heirs/siblings sign the deed. You can ask your lawyer but I'm thinking he's going to have to go to the title co. for the ultimate decision.

It's usually the municipality that handles code violations unless you're dealing with state sanctioned violation like those from the Dept. of Community Affairs in NJ (for violations against properties with more than 3 units).

Also, file a request under the Open Public Request Act (commonly referred to as an 'OPRA Request' - most states, like NJ, have one). In most circumstances, the information has to be turned over to you within a certain number of days.

Here in NJ a standard contract will contain a clause (can't remember the term) that states that the bank is not responsible for any damage done to the property between the signing of the contracts and the closing. Thus, we usually secure the property pretty well AND change the locks.

I wouldn't make an issue of it at all and would instead secure the property so that no more damage is done. Your job is to establish a relationship with the listing agent so that you can do more deals. You don't want to be a pain in the a$$ over what you see as "principle" and the bank sees as a minor issue being overblown.

Personally I wouldn't meantion the "father" or anything about "probate" in the letter (the offering of condolences, however, is a nice touch). Instead I would just meantion the property and address. Once in person with the daughter I would get into details so she can see the look of concern and sympathy as you talk about it.

Also, I get the impression that she called you and left a message for you to call her back. Is this accurate? If so, call her back immediately and forget the letter. However, if you two already spoke over the phone then the follow up letter is nice. Do you have her home address? If not, the dad's home will have to do.

In most states, unless the property is in a trust or something, the estate will have to be probated, with or without a will.

Tomorrow I would send a card and leave a note on the door of the house. If she called you a few days after the death, she obviously wants to deal with this now. Sometimes heirs who travel a long distance want to deal with everything in one shot (within a few days) so that they can leave town knowing that everything is in the hands of the right folks (lawyer, realtor, etc.). So she may have called you because she wants to deal with the funeral, house and other affairs of the estate right away and move on.

I would call tomorrow or Saturday.