All Forum Posts by: Curtis W. Sutherland

My attorney is reviewing it, but I'm not sure that he's ever dealt with a fire damaged property before. 

My all cash offer was accepted on a 38-unit apartment this week. The property had four units that were recently damaged by fire. 

When the seller sent the contract, there is also a release of lability that he wants me to sign. 

He says there is no pending law suits that he is aware of. That concerned me. Then to release him from any past or future environmental issues really concerned me. 

What issues do I need to know about before I pay for this property? 

Thank you, Christopher!

Awesome information, Tony!  Thank you!

Thank you sincerely, Joel.

I'm not taking it lightly at all, Joel. It's an aweful lot of money. Stretched over 50 years it will likely go to at least three generations and maybe four. I woukd have thought an 8% cap rate would be reasonable. They did mention escillations every five years. I want to make sure its a true NNN lease...my taxes on this property increased 122% this year. It would still be undervalued on the tax rolls if the went up another 500% next year. I contacted a real estate attorney this evening for help with the lease when the time comes. Honestly the whole deal is making me a bit nervous. I realize any mistake I make on this could effect my family for generations. I'm closing on a $300K house tomorrow...no stress at all with that one. It seems to be more in my comfort zone :) Thank you sincerely for your response!

Yep, Christopher, you are correct: Its a lot of money. I paid $350,000 for the property in 1991. Today its worth around $7,000,000. Six months ago they offered me a ground lease for 25-years at $25,000 a month and I passed. Today they offered 50-years at $20,000,000. It's kind of like winning a small lottery :)  thank you sincerely for your very sound suggestions!  I guess at this point I'll just wait to see their written offer, but before signing anything I think you're absolutely correct: pay the upfront cost to make a bundle on this deal.  Thsnk you again!

Thsnk you and I'll do that, Konstantinos.

You don't have to be very educated in the process...it's basically the same as residential.  Locate your deal and buy it.  It can be very lucrative.  

You can start small. I found a house in 2001 that I thought would be commercial one day because it was on a busy street... the access road under an overpass. I leased it out until last year when I changed the zoning to commercial. I paid $55K for the house and leased it for $950/month while it was residential. After spending around $20K to change the zoning and upgrade the house, the property now has an excellent commercial tenant that signed a ten year $350K lease.

I bought a commercial property in 1991 for $350,000.  Today I was offered 50-year ground-lease at $20,000,000 just for the land that my building is on.  

Best of luck in your search!

You need to send information on your property to fund managers.   There are many that now invest in real estate also.