The next podcast update is here with a continuation of our buying and selling in the current market discussion!
Listen in as Marcia and I turn back to the buying side to discuss bidding on the purchase of a commercial property.
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Buying & Selling in the Current Market – Part 9
Marcia Edwards: I think that it’s time to talk on the commercial investment side, it’s kind of a mystery how to navigate this market, and what’s appropriate as a buyer and sellers don’t even understand how to analyze the opportunities when there’s more than one in front of them. Fortunately we have René, who is a guru, a queen of investment real estate. René, what are you doing differently now than what you were doing in a prior market place?
René Nelson: Well, you know, we would see a property come to the market and the buyers would just offer the asking price, and I think I mentioned I rolled out an 18-unit apartment complex last week, and we had nine written offers, six of those were at asking price.
Marcia Edwards: Isn’t that crazy? And the other three?
René Nelson: Actually, I take that back, we had four over price, so four over the list price, and two of them were all cash.
Marcia Edwards: Okay, so you got the pickle and letter. How do you approach that as a seller?
René Nelson: Really, I sat down with my seller and we analyzed each situation in each scenario, and those four really rose to the top, and to be fair to all four of those buyers, we went back one more time and asked for their best and final and gave them four hours basically to come up to best and final.
Marcia Edwards: So you actually get an Excel spreadsheet out and you put all the variables on it, as I understand it, to make sure you know every element of the success and the risk involved.
René Nelson: Yes, because on two of them, specially the cash offers, one had a closing date in July, well, my seller is going to do a 1031 exchange and he wants to move his portfolio out of the state. Well, that means he can’t make an offer on something until June or July, so if he sees it today, he can’t make an offer on it unless he’s going to pay all cash, and why would you do that? ‘Cause now you’re going to screw up your exchange.
Marcia Edwards: So it is all… It is a lot of the details to a lot of things besides price, it’s not just price that you’re looking at.
René Nelson: That’s right. So when we went back and asked for best and final, it was not just price, it was also quick, how quick can you do your due diligence, and I’m like, you, Marcia, I want them to scratch and sniff every surface. I want them to look in every nook and cranny of that apartment, I want them to do all their inspections and have a thorough due diligence, but sometimes that means you have to do that in five or 10 days, not 14 or 22.
Marcia Edwards: That’s right. Due diligence used to be a way to slow the process down in a sense, you can’t get away with that as a buyer these days at all.
René Nelson: No.
Marcia Edwards: So, if you have any questions about how to manage or navigate as a seller in the investment apartment, especially market place, call René, she’s great at what she does there.
If you’re considering investing in commercial real estate, René is here to help. To learn more about what options are available to you, schedule a 15-minute discovery call today.
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