All Forum Posts by: Steve Morris

Think you need to talk to them about the joint/several liabilities on rent and damages.  Make sure all the tenants understand, that they are responsible individually AND collectively for payment.  I go thru the same thing with room-mates.

That is, if the sub-lessee skips out or ruins the place, the original lessee is also responsible.

S*** happens.  Not to be cavalier, but use it as a lesson on your properties:

1) Make sure you're setting aside reserves and your prop generates enough free CFBT for emergencies

2) Do a life assessment on mechanicals.  e.g. water heaters are a 15 year life.  If you've got a bunch that are pushing 30 years, you're very fortunate - Today.  Plan for replacements

3) Look at major structures, your biggest issue is moisture invasion.  Fix it NOW, waiting makes it more expensive.

4) Once you go thru cycles and deal with stuff, it'll be better.  It's just dealing with any problem the first time is a stressor.

1. How do I best approach the best and most connected commercial brokers? 

1) If you're looking out of town, contact a national chain like ARA, JLL, CBRE.  They usually kickback commission to the local guy so you have someone in town working for you.  Plus they have offices all over the place and most can do financing and brokerage.

2) Be honest about where you're at in terms of location, type of property, timeframe and how much you have.

3) Anything you can to impress the local guy you're serious.  If he runs a bunch of stuff past you that you ask for and you do nothing for 2-3 months, you'll lose a lot of their motivation.

2. Should we sell before seriously beginning the buying search?

1) You know the Bay Area better than I do, but I think we're at a peak in value in the area.  I'd start to list stuff to see how much I can really get.

2) If 1031 is NOT a concern, then tell the broker.  Some brokers exploit 1031 buyers by getting them in contract (even on bad deals) and then dragging their feet until past the 45 day line and you're stuck with 3 (some instances more) nominations to close on.

Well, in this business its give to get.

A lot of retail leases are gross leases (i.e. their profits determine part of their rent).  I think I'd sit down and say let's look at your numbers first.

The guy may well be hurting and some forbearance or delayed payment or lease extensions may be options.

Do you think there is an advantage to become a realtor to find your own investment properties?

They have two things in their favor, os you decide:

1) Access to RMLS and can set alerts and

2) They spend all day long looking at the RE market and talking with owners.

Unless you want to pay that price, I think I'd find a good broker and make friends.

In RE, making friends means:

1) You have the ability/wherewithal to close deals and can prove it

2) You can decide quickly

3) You are somewhat loyal.  They find out you're running several brokers on the same chase and you'll drop in priority.

What sort of response are you getting?  

Not endorsing it, just curious.  I get a lot further with phone calls.

I'd first go to a 1031 accommodator (have one here that works with out of state investors) since a lot of them are offering this service.  Opening a 401k is not that hard.

Main thing is that you need to exclusively fund your investment from the 401 and then any profits go to the 401.  I guess there is some really fancy footwork to get around this, but I'd assume it needs to be ALL 401 money.

Can anyone testify to using a broker for investment property purchase vs not using a broker? Has anyone gone down the not using a broker path? What issues did you run in to? Was it worth the savings?

Assuming you are NOT paying a broker commission, I'd use one.  It won't make a diff pricewise, but the listing broker may be less friendly if he has to co-op a commission.

If the broker is decent, he'll be able to advise on bad/good price, off-market stuff and manage the process paperwork.

I'm a broker and I'd say most are pretty helpful.  If they want to charge you a buyer broker fee for a deal you found and analyzed, I'd think hard about getting an EXPERIENCED RE atty.

A broker will prob get you the best rate since he shops all lenders (that pay referrals of course).  A bank (unless you have a very good personal relationship) will only reflect their rates and desire.  Some big banks are not that hot about apt lending right now rates reflect that.

At 85% LTV, 5.25% seems a little high, but that is a high LTV for non-owner-occupied property. If you wait a few months, the COVID thing will be a lot less (please) and the banks will be more accomodating.

Well, am a comm broker in OR.  I've used RealHound, ClientLook and APTO (Salesforce front-end).  Now I"m back to 4 XLS.

Seems like you spend an inordinate amount of time putting in info and then learning how to get it to do stuff you want like who do I need to call today and why.  My father, the mechanic, said you get paid to fix cars, not to polish tools.

Add in, once you put your info in, it's almost impossible to get it out into a new system.