Bridge Capital
How Bridge Capital can help prepare The Solution (continued)
your property for a Buyer
At Bridge Capital I use a income statement form that separates but includes non-recurring expense items so a Buyer and Lender can see what’s going on with the property. Other forms can be used as long as an accurate story is told.
Next, the rent roll can be verified with the actual leases so that all of the data is in line. If there are rent concessions they should be identified. If rents are significantly under market then market rent comparables can be developed to support an increase in future income. And of course good market data is extremely helpful to the lender’s real estate appraiser.
This writer worked for a number of years as an institutional commercial underwriter and it is amazing how little or inaccurate information impedes the flow. At Bridge Capital I approach each transaction with the closing in mind. Preparing your property before an offer is accepted simply requires reviewing data from the start and developing a plan to deal with challenges. This positive approach puts an emphasis on the bottom line drives up the value of the property.
Further one should anticipate other potential obstacles and work in concert with brokers, owners and managers to implement solutions. Should the property exhibit deferred maintenance then the deal needs to be structured to handle those repairs. Lenders are less concerned about these issues if a plan has been established. My view is that you don’t want to leave it up to a Buyer or a Lender to dictate how the sale will be structured when you can lay out a plan in advance. This preferred approach is to anticipate costs associated and determine how best to handle the costs before the Buyer is identified.
In Review
At Bridge Capital the emphasis is on closing the deal by eliminating red flags, identifying challenges and recommending solutions. To best prepare your property for sale you should know all of the property’s essential information: operating income and expenses, capital expenses, details of the income stream, a complete rent roll and leases, identify rent concessions, comparable data, and condition of the structures. You can establish a plan to cover temporary issues like repairs or vacancies. This information should be provided in a detailed and verifiable format for a Buyer and a Lender. This action plan will enhance the property value and create a win-win situation. The property qualifies for the maximum loan at the lowest cost to a Buyer who is seeking a quality project with all issues identified and resolved. And best of all there is a plan established for the property owner to control the transaction from the start.
A Few Helpful Forms
Income and Expense Statement
Rent Roll Form (Multifamily)
Rent Roll Form (Commercial)
Contact Information
T. Budd Fletcher (831) 239-8504 bridgecapital@gmail.com
Bridge Capital CRES
425 Capitola Ave #4
Capitola, CA 95010