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Real Estate Advice needed for leasing a commercial building

Discussion in 'Real Estate Investing' started by topherea, Jul 8, 2017.

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  1. SteveO
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    SteveO Legendary Contributor Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I always expect my management company to evaluate the potential tenants. The management company does not get paid without a tenant so they want one in there. I'm assuming that there will be a reason that comes back to you. It will either be financial or your company's fit with the unit and other tenants.
     
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  2. topherea
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    topherea Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    As always, thanks for commenting.

    I'm pretty sure its financial side. I just wish I knew where right now because I have another company who wants an application from me and I want to know if there is a simple correction or if I didn't communicate thoroughly something that needed written explanation. The application seemed to only allow a square peg to square hole applicant.

    What concerns me about this system is I'm pretty sure each one of these puts a soft pull on my credit and I work hard to keep my credit up. And, it makes me feel like a bit of a peon. Its this red tape right here that contributes to me wanting to avoid the broker system as I've mentioned I've had better luck with meeting an owner face to face followed up with a handshake, signature and an exchange of money for a key.

    Steve, this place was only $835 a month. I showed two accounts. One with some of my reserves which was more than adequate and the other account showed the money coming in, also more than adequate. My credit score is also more than enough and I pay cash for everything. The only debt I have is revolving which is always paid off immediately and always kept at less than 10% utilization. This is frustrating because I know for an absolute fact that I could've handled this.

    Now the new broker I'm speaking with says he can't stand that last management company. It could be a sales ploy but he sounds sincere. But man, this sure is alot of noise for renting something so cheap. My last apartment was $1200 mo and I had just started a new job! lol. My girlfriend's last apartment was a cash for key exchange and this place was in a mixed use live/work. I wish we were still there but I moved us out for safety reasons just over half a year ago.

    Anyway, I'm pretty sure its obvious why I have frustrations with agents. I won't give up but I also won't be a pawn in this antiquated game that I'm pretty sure with enough pulls will have the potential to ding my credit.

    Thoughts?
     
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  3. topherea
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    topherea Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Ok I finally was able to look at the letter and two things stood out to me:

    1) The TU credit score they pulled is almost 50 points higher than I thought it was. Very cool. I've been working hard on this and that is one heck of a payoff.

    2) The broker gave me a bit of misinformation and now that I see where the bottleneck is, I'm going to game the game slightly and make an adjustment. Then, I'll see if that makes it to the finish line with the next company I'm going to apply with. Now this might change but right now to get through this I'm going to use the government provided benefit of limited reciprocity via the use of an entity other than a human. At least that's where the thought is at the moment and then, win or lose, I'll take it from there and learn as I go.

    But first I have the right to obtain the report on me this last management company acquired and I'm going to do this so that I know exactly what they looked at.

    To be continued...
     
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  4. topherea
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    topherea Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    It's been a little bit since I updated here but since my last post I've been at it researching and looking and learning. If you've been following along you'll see that I had one out in the country that I liked and made an offer on it but was told by 'my' agent that the owners were out of town, blah blah blah, and since I haven't heard anything. Anyway, no thanks to my agent, I had to make the phone calls to get down to the bottom of what was going on and come to find out that the city was on the owners for having to redo their septic. They apparently were maxed as far as capacity. Eww.

    This takes me to yesterday where I met with another management company (who was 20 minutes late) to see another house zoned business. Now this was a friggin joke. Where do I start... How about the basics -- the foundation was shot, there wasn't a single floorboard in the entire house that wasn't soft and spongy, the "Michigan basement" was on dirt! And the driveway was completely cracked up. But the clincher was that the owner wanted a $200 cleaning fee (the place was filthy) and also a $100 application fee and then had in capitals on the application that the owner reserves the right to pick and choose who he wants in. So, I read this as he was going to stack up a bunch of application fees whether you passed or not. And folks, this wasn't in Detroit or Pontiac or Wasteland or Roachville (Westland Roseville) this was in a high dollar area by West Bloomfield and Commerce. Again my original experience that I claimed in my opening post is still holding true. Brokers don't have MY best interest at heart.

    So, last week I had a discussion with an actual owner and it went very well. He's a nice guy who actually called me back a couple times and I went out to see what he had to offer, which I liked, but it's a 40 minute drive from the core of where the work is (30 the way I drive...but still...). In calculating fuel expense, wear and tear on the vehicles and drive time it became a moderate discouragement as compared to what he was asking. However, he said he would work with me. AND, as many of us know, the goal is to get 'out' of the business and 'on' it. Plus, the business keeps growing! 2 new customers in the last two days plus customers are starting to throw side jobs that are unrelated. This thing is starting to break out of the seams.

    I think what I'm going to do is gamble and spend the next month saving more to cover these initial additional expenses in hopes that this owner doesn't fill the place. Now what is a positive about this location is that I purchased a property last year, that's tied into this whole crazy idea of mine, and it's located only ten minutes away. And the goal is to start working on it slowly as I'm able and as this business goes through some transformations. So there are benefits with the location.

    Anyway, here's some photos of this one. I'm not going to give any numbers yet until I know for sure but it's over 5000 squares and the owner will let me take little pieces at a time, provided they're still available, of course. The first part I would take would be the apartment which is twice the size of what I need, as it is, and the owner doesn't care if I convert it around a bit to what I need.

    BTW I somehow lost a few of the photos but these will give an idea:
     

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  5. topherea
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    topherea Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    the rest
     

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