HI, im new in the bussines, and this gentleman that i know wants to sell his property, is a rooming building with i think a lot of potential,the good thing is that he told me he wants to sell it because he’s to old already(he’s 84)and the bad thing about it is he has lung cancer and has told me that he cannot take care of the property good enough due to this issue my question is if you where in my shoes, what will be your approach to this gentleman to get to sell it to me and what will be my first move…thank you :help
Hi.
First things first.
1- Due diligence + find out the value of the building
2- Neighborhood analysis
3- Repairs or upgrades needed
4- Will you be responsible for water/utilities/yard
5- Your Cash flow versus anticipated repairs
6- Wil you manage tenants or property manager
7- Decide beforehand your offer to make the numbers work
favorably for a win-win
*Note: When purchasing any kind of real-estate, don’t buy based on
emotions ie, cute kids or someone’s health condition. On the
other hand, we are never to take advantage of anyone either.
I once lost a $90,000.00 house because I let my emotions get
in the way. I fell in love with my tenants 2- year old little son.
"The parents knew this and jerked me around and simply sto-
ped paying their lease. Long story short, my lender took
the property back. You see in real-estate, you have to treat
this just like the business that it is!! Just go within your
self and the right answers will come. Regardless to
what anyone else may say, ultimately we have to make
our own decisions.
To Your Success! :beer
“gentleman that i know wants to sell his property, is a rooming building with i think a lot of potential”
Yes, approach this on a business matter. On what you wrote, the above statement is the key thing that matters. Do your due diligence. Because its a rooming house, check with the building department first to make sure that if you buy the property it will be allowed to continue as a rooming house. I backed out of buying a rooming house because in the area I was looking to buy one it was grandfather only up to the present owner. Once I buy it, zoning becomes a 3 family and therefore my numbers changed.
Once you know the info, check on the numbers. There is a lot unreported cash in a rooming house. Get a good handle on this. Once you know the true numbers (income and expenses), go ahead and formulate your offer. I always advice try to get owner financing if you can.