I am involved in a deal that to be honest is WAY over my head. Another agent in another state sent me a referral for a man wanting to buy apartment buildings. Price was not an issue, nor was the location.

I found a complex that he may be interested in, and sent him all of the information that was sent to me by the listing agent. The problem is the information is kind of all over the place. Several (about 12) different files, and in many different file types. Some are in Excel, some are in word, and some are in PowerPoint and so on. The response I received for the investor was, "I hate to be picky, but this information is all over the place. I can not make hide or hair of it, and do not have the patience or time to put it into a presentable format. I want the basic information, in a free flowing presentation"

So what I am asking is, what all does an investor need to know whether he is interested in the property or not?

What is the best format to provide this information, and does anyone have a presentation similar to what I would need that I could use as kind of a cheat sheet?

This is a very large deal, and would be one of those defining moments in my still very young career. I can not afford to drop the ball on this (at least not again). Any advice is much appreciated.

I would explain to Mr Investor that obviously at his buying level he is going to demand more of your time and expertise. At that level you require a flat fee to compile the information he requires.

Well, the commission structure has already been put in writing. And to be honest, I am very pleased with the amount I will receive. This is why I am sooooooooo worried about making sure not to drop the ball on this one. I want to make this presentation is as top notch as I can get it.

Thank you for the advice.

be very careful with investors, esp if you have not secured some time of exclusive agreement of representation. Also, be up front and ask for some type of letter of credit or bank approval. Many investors will give you the run around and let you do all the work and ultimately walk away or find a route around you to secure the property. That being said, you should ask investor exactly what he needs to move forward and tell him you will send him detailed analysis with answers to his questions. Also, you might ask listing agent to step up and send you something that is a little more presentable. A good listing agent on a large commercial or multi family transaction should always present property with a detailed analysis of income/expense that is easy to interpret and communicate to other agents and buyers alike.

thank you Dallas, very good advice there.

Ask Member "Gulf Winds" to look at your post and see if he can help. He does alot of commercial projects and investing. He is very helpful. He helped me last year get my first commercial listing. I was going to refer it out, but his advice convinced me to tackle the listing.

You ARE way in over your head on this one.

What size is the complex? 8,12,50,100 units? Economy of scale matters and how you value the deal.

Are you looking at a class A,B,C,or D building?

Is the price point and cap rate realistic for the area the investor wants to buy in?

You NEVER,EVER go by the numbers the seller provides. When buying a multi-family building you go buy what the property is doing today not overpaying for a promised value in the future like sellers and brokers like to tell you.

What is the NOI based on? Does the owner manage himself to increase the NOI or is there a good property management company in place? Is the property submetered or on a master system included with the rent payment?

Does the apartment have value plays in it?

These are just the basics. Ask the listing broker to send everything in one format so that can be relayed to the investor.

More specific questions just ask.

I think Blaine has received everything from the individual Listing Agents and his problem is that each Offering is in a different Format. The details for Commercial Listings seldom fit into nice little MLS Formats like Residential Listings do. Often, Listing Agents just pass along what they are given - exactly as it is received. Listings are usually supported by multiple income and expense schedules or Schedule Cs which may be present; partially complete; factual, or pro forma. Sounds like a Mish-Mash. I don't hear multiple MLSs; so that's a plus !

To earn his keep with the Buyer, Blaine is probably going to have to subject all 12 properties to some spread sheet analysis that is done at the level of sophistication that his Buyer can digest. Perhaps someone like Gulf Winds, who Dayton mentioned, has a Comparative Analysis Format that has been successful in the past for a little project like this.

The prettiest presentation is WORTHLESS if it isn't understood by BOTH you and your Buyer. I would try to start out just getting some of the basics for these 12 into a common matrix format and present them to elicit questions. The quality/complexity of the questions will tell you how to proceed in modifying the Format to satisfy the needs of this particular Buyer.

This might turn out to be a case of the Blind leading the Blind; but you may luck out and have a Patient Investor who can give you decent guidance because he'll be able to tell you what his criteria are. Or else you will discover that he doesn't have a clue. Good Luck !

This is a slight tangent, but should still help the original poster b/c it relates to valueing these properties.

I'm curious as a potential investor . . . we own several rentals and have considered jumping into the multi-family arena. My question is HOW would you ever know that current rents are accurate? I mean, it's not exactly difficult to write a lease yourself, including whatever numbers you need.

Thanks!
Tina

Interviews with a sampling of Tenants ?

Certified Copies of the Current Owners' Tax Returns ?

If they're going to over-state the Income from the Units, it won't be here ! I have actually seen situations where income is understated around here ! Hard to believe isn't it ? Many Tenants pay with something called "CASH" which is hard to trace.

Don't use anything unless it was good enough to give to the IRS.

If they have a CPA, he/she should be Trustworthy ?

But, Like RR said "Trust but Verify"

I think that's all I know !

It all depends on WHAT records the seller has actually kept.If you aren't paying cash and or you are doing owner financing a bank will want at the last 6 months of records for the complex.
When a property management company is running th eproperty the records are usually better kept and more accurate.Your job as an investor is to sniff out "What is it that this seller is not telling me??"

They always paint a rosy picture but it's your job to find out what is really going on and to not overpay for the risk if yo uare going to take on the problems.


Alot of muiti-family is mismanaged by part time investors.You know what rents are by comparing similar buildings in the area.They are classified by 1/1's,2/2's,3/2's etc.

Class A building is brand new and is usually sold to institutional investors such as insurance companies,retirement funds and pensions,and real estate investment trusts.These companies usually pay a lower cap with a higher price than we would pay because they want the security of a newer building even if the returns are lower.

Where value is created is with the b,c,and d classification of buildings.You can buy at say a 9 cap and creat a 15 cap value when it's over with using value plays to improve the property and increase the rents.By looking at comparable rents for other similar class buildings you will get an idea if your potential property is at market rent value,below it,or above it.

A property with no vacancy doesn't necessarily mean it is managed right.They could have too low of a rent for the area and or alot of no to slow pay renters.

You want to look at the rent rolls to see what is charged,who pays,and when.Anything over a quad unit you will start going into commercial loans.

good luck

Have your investor do some of the work, ask him what formula "he" uses to determine a good buy. Most investors will try and make you prove it's a good deal? Good deal to who? Of all the investment properties I've done over the years no two investors have exactly the same criteria.

You will need some help here, find an agent that deals in apartments and cut him into the deal. If you get greedy and try and do this yourself a sophisticated investor will find you out and then probably go around you. Big commission's mean big responsibilities to your client, take care of him, get some local help . . .

Stan

I guess I put this in the wrong spot, hope this is right.

Have your investor do some of the work, ask him what formula "he" uses to determine a good buy. Most investors will try and make you prove it's a good deal? Good deal to who? Of all the investment properties I've done over the years no two investors have exactly the same criteria.

You will need some help here, find an agent that deals in apartments and cut him into the deal. If you get greedy and try and do this yourself a sophisticated investor will find you out and then probably go around you. Big commission's mean big responsibilities to your client, take care of him, get some local help . . .

Stan