Investor/Partner Needed
We are under contract with a 250+ unit low rise garden apartment complex in Atlanta. Cap rate is near 10%, and it has very low turnover. One of our partners had another deal fall through and we are short about $750k to close the ~15% ltv gap from our financing. Purchase price is about $7.5M, and in addition to the excellent cash flow, there is room to move the rents up, and operating expenses down as the rents are clearly below market, and we have offers from a company to reduce one significant operating expense by at least 30%.
Aside from wanting to hear from any other interested investor/partners, does anyone have ideas, sources or methods of how to bridge the funding gap?
[ Edited by Toolkit on Date 12/03/2005 ]
Interested; what is the address in Atlanta and do you have a proforma that you can send? When is your drop dead date?
Mike in Gboro[ Edited by woodsong on Date 12/03/2005 ]
Insurance for loss of profit as far as I know is not an insurable product for landlords except in the case of a total loss of the premises such as a fire.
The theft of your property is covered by your H.O. coverage if you in fact bought coverage. But I would, and maybe you already have, file a theft report with your local authorities. Besides this being the right thing to do, your insurance company would request this as well. You do have the receipts for these appliances right?
You may also fall under the deductible of your policy for you to recover the worth?
Flyboy is right on. If your deductible is NOT much higher than the cost of a washer and dryer, it should be. Use your insurance for "catastrophic" loss exposure. Granted, this means different things to different people, but a good rule-of-thumb is to take the minimum claim amount you would file and double it. Use this as your deductible...
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It sounds like you may need a new Agent who understands REI and can help advise you...
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The company is only as good as the contract and the Agent or Agency that represents it. This article may help shed some light for you:
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=438
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Also, "loss of rents" or "business income" is usually included in the commercial package policy for non-owner occupied (habitational) policies. In the event you lose rents due to a covered loss,such coverage protects you...
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Thank you for your reply. Upon further investigation, I do not believe the tenants took the appliances at all. I had two rentals that went into evictions, the tenants left and I had a friend of a friend show the place for rent upon my ads posted. I live in New York and the houses are in Las Vegas. She cleaned the house and had her father change the locks, remove left furniture. I paid her father and her for their help as tenants were finally replaced. The new tenants remarked on how old the appliances looked for a new house. The "friend" said she wondered if her father took out the new appliances by mistake instead of the old. Impossible. The appliances were six months old and hooked up and the new tenant sent the pictures of the rusty ones that are not working. So I am out the washers and dryers and I am sure the other appliances have been replaced with old. I will be heading for Las Vegas to decide whether I have a claim! So much for my feelings about the people in Las Vegas!!
You should get an attorney to go after the rent and the cost of the washer and dryer. Some collection firms will take the case for free as they can recover their fees in the judgment against the former tenants. If the former tenants have any assets or a job, which you may know about from their application, the assets can be attached and the wages garnished.
Thanks. I am going to sue the tenants for lost rent in small claims court and hopefully garnish the wages. As for the appliances, I believe it was not the tenants but the person I used to help show the house and clean it up and look the houses over. It was two months before the house was rented, she had the key to both places and suddenly the new tenants inform me that the appliances look old! She will just say the tenants stole them and it will be difficult to prove.
Pat
Check this link for LV groups:
http://www.thecreativeinvestor.com/commercial/FindGroup-NV-Nevada-Real_Estate_Investing_Clubs.html
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I want to thank everyone for their input and suggestions. I will try the investment clubs as well as call some insurance companies. This site is so helpful!
Pat