In this episode I’ll go over my very first offer (which happened about 4 months into my real estate education). You can read the process here: https://montecarlorei.com/my-first-commercial-real-estate-offer-what-happened-part-1-of-3/ This will be broken down into a few episodes because it’s going to be a detailed explanation from beginning to end, and it will be as follows: How did we decide to make an offer on this property What did we ask the real estate agent to send us during the due diligence process Are we running this as a business or selling after remodeling, plus all the financial calculations Which items our attorney looked at and objected to from the title report What ended up happening and conclusion Things to note on the offer agreement We used the standard commercial offer agreement, and as noted above, we had to give the seller all of the inspections if we didn’t end up buying the property, so they could give them to the next buyer. A few other things that I highlighted on the purchase agreement were: 1. We needed to deliver the removal of contingencies or cancel the agreement within those 45 days, 2. If there was any problem with his purchase, we would have to resolve it through arbitration, 3. Both buyer and seller pay for escrow fees, the seller pays for County transfer fees, the seller pays for the city transfer fee, the buyer pays for all the reports, and the buyer also pays for the title insurance policy. These are just standard terms and we agreed to them. Things to ask the real estate agent to send during the due diligence process: 1. Recommendations for Structural Engineers, roof inspector, and contacts in the city of Salinas since she had been a broker there for a very long time, and she knew quite a few people. 2. The last structural report done on the property. 3. The blueprints so we can give them to our architect, otherwise if the architect did not have the blueprints we would have to pay around $10,000 to get have them redone. I needed those blueprints not only in paper format, but also in digital format since I wanted to forward it to our architect digitally via email. Both of these cost money so since she had the original blueprint (and it was about 11 pages long) she had to scan the blueprints and send them to me. 4. Rent comps, and sales comps in the area. Both of these are important in order for us to understand what we could rent the property for (and therefore what we could sell the property for), and what were people paying in that area once the property was fully leased and fully remodeled. All of this information was used in my financial analysis to do a best and worst case scenario so we could see what was going to be an ideal price for this property. Note that I asked for leased comps and sales comps from two different real estate agents and both of them provided me different numbers so I had to average them out to come up with the final number. You really want to make sure that you ask for comps from more than one real estate agent. 5. The lease for the nail salon, they were on a month-to-month lease and I wanted to understand if they were below market or not. It’s also important for us to have a copy of that. 6. Who the owner of the building next door was, because we were sharing a wall with them and we needed to understand if they did anything to the wall or not. --- Support this podcast: https://podcasters.spotify.com/pod/show/best-commercial-retail-real-estate-investing-advice-ever/support

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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