Aquisition Question
When working with a buyer that wants to aquire multiple units in a condo conversion that are rented with tenants in place what is the best way to structure the deal. Sorry for lack of info just ask and I will provide.. Thanks for the help..
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If you have any questions please let me know feel free to contact me at any time.
The leases run with the property, so the buyer has to understand that the tenants will remain in place until the leases expire. All earnest money deposits, etc. are transferred to the buyer. Other than that it is done just the same as if there were no tenants.
Chris
What does your contract say re: occupancy? Who will manage the property once you close? Is this drop enough for you to consider pulling out of the deal (assuming you can contractually)?
9 vacancies in January seem reasonable for a college town. Unless things have changed, I know i used to make it semester by semester. Different loan, scholarship, etc package each semester. Im sure you know the market, i would bet vacancies are higher than that in the summer. But at $275/mo, seems like you should have renters.
I hope you do not need to count on the sellers; these guys will be your competitor after the sell goes through. So if you cant make it with out them, you shouldnt buy.
College students, God bless you, you are going to need it.
You could offer a free case of beer with move in.
I would request the last 2 or 3 years income & expenses on the building.
The seller should be able to provide
Rent rolls
3 yrs operating statements
yr to date expenses
3 yrs taxes or schedule E of taxes
Occupancy for the last yr (looking for at least 90%)
Is there a management co. being used
Is the seller willing to carry back a portion to help with financing.
This is the beginning questions I would be asking.
Good Luck,
Robert
[addsig]
sorry if this is a hijack
how do you cashflow at all if you have the seller carry a 2nd? Pay him later withou payments monthly?
How will he be taxed?
Thanks