Apartment Conversion Math
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We\\u2019re going to look at a sale offer of a commercial office building and we\\u2019re going to dissect the viability of this offer.
\\nThe seller in this case is offering to sell a property that has an as-is appraisal for nine million dollars from a major brand name commercial brokerage house and appraisal firm.
\\nThe seller purchased the building a couple of years ago for 5 million dollars. He is willing to seller finance the building with $750,000 in secured debt and another $2.25M in forgivable debt that would be unsecured.
\\nThe offering prospectus has a plan to convert the building to residential, and the assertion is that the building would be worth $17M after the conversion is complete and leased up and stabilized.
\\nThe building is currently 50% occupied.
\\nThe question is whether this offer is a good deal?
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\\nHost: Victor Menasce
\\nemail: podcast@victorjm.com
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