Trying to Fool me on a 1.2 Million Dollar Commercial Deal
I bought a 2.1 million dollar commercial deal earlier this year with a partner. I was actually talking to him this week aboit buying another deal like this. Ironically a wholesaler reached out to me to sell an "amazing" commercial deal. It was worth $2.2 million and only selling for $1.2 million. I was really excited until I looked into the details.
##What were the terms of the deal?##
The first red flag on this deal, was they wanted to close in 2 weeks! Commercial deals are hard to figure out and it takes time. It had better be one amazing deal to close in 2 weeks for $1.2 million. The second red flag was they did not want us seeing the units and letting the tenants know the property was being sold.
##What info was I given?##
It can take a lot of due diligence to figure out a commercial deal. I was given a simple excel file that showed the rents, potential rents, vacant propeties, and value. Supposedely, this information was from an appraisal. At first glance it showed the value to be 2.1 million dollars.
The weird part was that the property was only making $6,000 a month. It had some advantages in that all the units were condos and could be sold separately. It was an old hotel that was turned into office space.
The wholesaler kept telling me how mismanaged the property was and how much money it could make. Something seemed way off on the value versus the rents. I drive by the property and none of the tenants they showed me, matched up with the current tenants. It turns out the tenants, rents, and appraisal they showed me were from 2008!!!
I asked for a current rent roll, and it was a word document with different tenants and rents. I asked for leases and how long the leases were, and nothing was given to me. I did more digging and the property was bought by the current owners for $650,000 in 2010. They refinanced it in 2013 with a local bank. I asked for the most recent appraisal and they claimed they never got one. BS.
So, they have no leases, no apraisal, won't allow access, and want to close in two weeks. I am guessing the appraised values they gave from 2008 were BS too. No way a place that makes 6,000 a month is worth $2 million.
If it sounds too good to be true, it just might be.
Don't let em fool you, he's a bad man
Would it maybe be worth $1 million? I think you should make a lowball offer on it at least.
I don't think so more like 800k
Did you make the "lowball" 800k offer? Do you ever do lowball offers? I've heard of lowball offers on Craigslist and stuff. It seems like it could work some of the time in real estate and I think it can work in "hood home" areas. lol Might be a good video idea.
FYI you might want to sign up with @dustsweeper.
Glad you did your due diligence and saved your money. Hate cheats!
You know what Bro just follow your heart and do what it's is telling you, you will get through it confateble. What am saying is go for it
I never knew that this profession of ours has its own bad side. All the same, thanks to God. You did not fall a victim to their evil plans
You have a minor misspelling in the following sentence:
It should be weird instead of wierd.To listen to the audio version of this article click on the play image.
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