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  • Questions to ask when looking to buy a facility

    My boss is looking to purchase a storage facility that is currently bank owned. I will be going there on Friday to take an initial look at the buildings and grounds.
    I hope to also get a copy of their rental agreement and vehicle addendum or agreement. Their advertisements say: You Store It and We Secure It.
    I see that as a major lawsuit in the making. That is one of the reasons for me to see what disclaimers are in the rental agreement. One of the first
    things I would do if my boss does buy the facility is change all the ads and send each tenant a letter to let let them know that THEY are responsible
    for the security of their property. I'm getting ahead of myself. I want to ask the following questions but I'm not sure if I should:
    I want to ask the managers how long they have been employed at the facility and if they have written contracts. As far as I know my boss will keep the current managers if they have been doing a good job. However the occupancy is only about 62%. The office is closed all day on Sundays, and from Mon thru Thur the office is closed for lunch
    from 12 - 1 pm. Office hours also start at 9 am. An offer has not yet been made on the facility. I'm open for comments and suggestions.

  • #2
    Re: Questions to ask when looking to buy a facility

    If the facility is bank owned a reciever will be operating the business so be sure he/she is aware of your visit and is prepared and allowed to answer your questions. They work for the bank and may or may not be interested in remaining at the facility when it is sold.

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    • #3
      Re: Questions to ask when looking to buy a facility

      I assumed that the managers were left over from the previous owner. We will have the real estate agent or someone from the bank or both at the facility when we go there. Now that I think about it, a Bank tried to hire my wife and I to run a storage facility for them until they could sell it. They guranteed us at least one year on the job and if the new owner didn't want to keep us or we didn't want to stay, the bank would pay us for the remainder of the year. That was about twenty years ago. I'm glad we stayed put as it has allowed us to be with out grand children as they grew up. One even works for us now as a relief manager. Thanks for the help. I know they won't release any info on the files etc until our boss makes an offer and its accepted.

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      • #4
        Re: Questions to ask when looking to buy a facility

        Actually if your boss has signed a confidentiality agreement with the bank the reciever may be able to answer many questions you might have. Deal doesn't need to be done before info is exchanged.

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        • #5
          Re: Questions to ask when looking to buy a facility

          Consider negotiating a purchase agreement SUBJECT to inspection and due diligence. You get the price you want based on the NOI/CAP rate and save your time/efforts for a later time when you have a 'done' deal

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