I was at Chase Bank yesterday and over heard a conversation between an investor and what I assumed was his property manager. I went to my car to get my business cards and as it turned out he was parked right next to me. I approached him to see if he was interested in purchasing he said no but said he wanted to sell his properties. He has several 18 unit buildings in my farm area wants to sell as a package deal for $3 million. when I heard the number I hesistated and the look on my face must have said that I wasn’t able to handle such a deal. I quickly recovered and said taht I would be willing to look the deal over and even if I could not handle the deal I have a network of other investors who would probably be intrested. Long story short I got a first name and email address but no other contact info. I fumbled, but does anyone have any ideas on how to not make so such an error again?
You have heard the old adage: "Just pretend there all standing there in there underwear" we all put our pants on one leg at a time, just pretend the number was 3 dollars or 30 dollars and just because there asking $3m does not mean the properties are worth $3m!
In fact other than getting the facts, you could do nothing other than turn this kind of opportunity over to an experienced investor for a finders fee and walk away! Someone could say to me I want $3 trillion, but until I see the property and the numbers it’s just a property!
As far as commercial properties are concerned in the bigger picture $3m is not what it used to be!
I agree with you, Gold.
Just because they’re asking for the stars, it doesn’t mean they’ll get the moon. Nothing is set in stone, until you crunch the numbers and due diligence. You evaluate commercial deals, differently than you would a normal house. It’s ok, just follow up with him/her and try to get their number.
Thanks for the advise. I agree that nothing is set in stone and no offer is made without due dilegence. The problem is that I fumbled before I got the full info for the properties. I was caught of gaurd by the size of the deal. I guess that I have to work on my poker face
Everybody fumbles once in a while, but it’s how you pick yourself back up that counts. It’s probably because you were expecting to hear about regular homes, not apartments. Either way, a deal is a deal. As long as a commercial deal has a good cap rate, it’s just about good to go. Other factors come into play here like value adds and such, but that’s about it.