Dec 6, 2019
We have discussed this topic in the past; I have an apartment building now what? A slight twist now though "I have an apartment building under contract now what?". A lot of time most people who don't know what they are doing, they try to negotiate the deal upfront which is necessary while you're buying a house.
While buying a house it's a different scenario when you write the offer as generally you have a week or two at most to close the deal so you'd start working on financing and have an inspection done and you may find out there's some repairs and maintenance that needs to be done such as roof needs shingling or the furnace is not working. You can still negotiate til you remove conditions but less so than on apartment buildings.
One of my students told me he had no luck getting a vendor take back when he is talking to apartment owners. So first of all I explain to him that not all the vendors know exactly what a vendor take back is. So make sure you explain them what that means for the vendors such as if you ask them are you willing to hold some financing as a vendor?
I also tell all my students to not ask for vendor take backs over the phone when you're calling for the building. First, get that building under contract. Most of the negotiations happen after you have that building under contract.
Once you have the property under contract then you'll have a chance to see the financial reports- such as occupancy, expenses like repairs and maintenance and operations cost. After looking at the reports you have grounds to negotiate the deal further if you see a vacancy rate is higher or has a roof that needs to be fixed or the boiler needs to be replaced.
So remember, don't worry what your offer is upfront. Most sellers realize that the negotiation is going to happen afterwards. They just want to find out if you're a serious buyer.
So get the property under contract and then do the due diligence. And use your team to help you with that as you don't have to know everything.
And your team includes your coach too as they have done this over a dozen times.