All commercial real estate professionals are not created equal. As in any service industry, there are some extremely hard-working and dedicated professionals, and some that are not. Working with an experienced commercial broker, someone who specializes in apartment properties and has a proven track record can literally save you thousands and thousands of dollars at the negotiating table. Working with an inexperienced broker or with a residential realtor who has open houses on Sundays, and expecting them to assist you in making a profitable apartment investment is not realistic. What Should You Do? we feel extremely privileged to be able to work with some of the top commercial real estate professionals in the West. Their tremendous dedication to their clients’ needs coupled with our experience in financing income properties leads to an unbeatable combination of real estate expertise by which all our investor clients ultimately benefit. Should you be interested in engaging one of the very best commercial real estate professionals in your market area, please give us a call. We can recommend without hesitation some of the best in the business!
Don’t take a Seller’s or listing Broker’s word for what the property is worth… DO YOUR HOMEWORK. Know what comparable properties in the general area of the subject property have sold for – per unit, per square foot, etc. What Should You Do? Call local Title insurance Companies for information on recently closed transactions in the general area where your subject property is located. Title Companies are usually happy to give this information to you free of charge (it is public record anyway). Information concerning values can also be obtained from local appraisal companies. Don’t be afraid to contact one or more appraisers in your area. While some may not be willing to divulge specific property information, most are willing to talk with you about general property values in a specific market area, including the prevailing acceptable CAP rate for any given area. Understand that rental markets are changing – and some are changing very rapidly. Throughout the country, acceptable CAP rates have changed dramatically over the past several years. If you are unclear as to what is happening in the rental market area you are considering, call us. We can either give you current information immediately, or forward market information to you very quickly.
Lenders today are more credit conscious than ever. Most will decline to even consider a loan application if a borrower’s credit scores fall below a certain level. Very often a borrower’s credit scores will not even be reviewed until the entire loan application package has been submitted. Then, regardless of the strength of the entire file, and after a considerable effort on the part of the borrower to provide all of the requested information to the lender, the application will be denied based on credit.
What Should You Do? Know what your current credit scores (FICO scores) are before making application for an apartment loan. Remember, even experienced real estate investors with multiple properties can typically carry a lot of mortgage debt. Mortgage debt on a credit report tends to depress FICO scores, even if the investor has perfect payment records for each account! we offer all of our clients the opportunity to be pre-qualified from a credit standpoint. Simply put, we will, at no cost to the client, run a current credit report on a client, and then analyze that report from both a credit scoring basis and a debt to income basis. There is never a charge for this service.
Unless you are an experienced contractor and can analyze the structural integrity of a building and its systems yourself, you are negligent if you do not hire a professional to look at these things for you. In some cases you may need to get the professional opinion of more than one contractor. The three (3) most costly parts of a building to repair are the roof, the plumbing system and the electrical system. If you are investing hundreds of thousands of dollars purchasing a property, it makes no sense not to spend a few hundred more to have these major areas examined professionally.
Call us for our list of lender approved property inspection firms. We work daily with professional inspectors and we know exactly what type of items they look for when inspecting a property on behalf of a lender. These are the same types of things you should be looking for as you do your due diligence. Inspection reports do not have to be costly, and could end up saving you thousands of dollars in the future.