Commercial Properties...a Different Ball Game
I am wanting to get into more commercial peroperties. I have been looking the last month or so. It seems that commerical proeprties are a whole other ball game. While I am used to looking at residential properties, analyzing what rents I can get (or the current tenant is paying), looking at the structure, etc...and then making an offer with consideration to those thing, commercial seems to be backwards . Many folks don't want to disclose financials, rent rolls, or even let you look at the property until AFTER you have made an offer. Is that how it goes??
How are you supposed to make an offer without analyzing the deal? Usually, I Heard they want you to show you are for real, that you have the money, which is understandable, but upon presenting that, you should be able to get rent rolls, property set up, etc.
Call some commercial brokers "CCIM" and ask them your questions. Does notmake sense
I would never let you lok at my books unitl you have a solid offer on the table. I will, however, show you a proforma or a presentaion of he financials. Whjy would I waste my time with you and expose all my tenants nsmeas and rent to you if you were just shopping to learn. Sorry, it makes alot of sense to me.
Put you self in the sellers shoes and it is easier to understand.
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I think that its only reasonable to request rent role information, expenses, etc. I don't care what the names and addresses of the tenants are, but, I DO care about whether or not the property cash flows.
You don't want to waste your time with someone trying to learn, but I don't want to waste my time looking at a property that has poor cash flow. It's a two-way street ya know.
I agree. Any reputabel seller will have perhaps a twelve month trialing p and L as well as a rent history for twelve months and an annual operating statement for you to examine beofre you decide to buy. It is on this you make your offer or LOI. THEN you start your digging.
Whe I am selling a prop and the potential buyer asked for a rent role right out of the box, I just sent him a twelve month gross rent history - no names and not by suite or apartment.
Many sellers, esp mutli family like above, have v. poor records and can't tell you much of anything. Most cash is going into their pockets. These are often very good buys if you do your work properly.
Kendall, when you are done analysing this proerty, you should know it better than the seller.
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