Advice for a noob? (Purchasing a Commercial Property that is not on the market.)
I am looking to purchase a retail property that is assessed at $55k by the city. I contacted the owner of the property and he stated he was not interested in selling and would entertain offers. 
I don't know what my next steps should be. This is in an up and coming area, yet, this particular section has not yet been developed. 
Any advice on how to proceed would be welcomed. I'll do my best to answer any additional questions. Thank you!
[{"id": "e54le8q", "text": "First, make sure in the area where the property is located, property assessments are 100% of market value. I'm not sure where you are, but in the Philly area, the counties don't reassess every year. Every year, based on sales, a ratio is developed. Say a county hasn't been reassessed in 10 years, the assessment ratio could be something like 75%. Applied to that $55K assessment, the fair market value might be closer to $75K. \n\nBut you'll also want to find comps. Recent sales of similar properties in similar areas. Look at same prices on price per rentable SF, apply to your prospective property. \n\nFigure out what retail rents are in that area. Figure out what cap rates are for retail properties in that metro. Figure out expenses, get your NOI, cap it.  That's what the fee simple market value should be. Figure out what rents the current owner is getting. After they under market rents? How many years left on the term of the leases in place? If there are long term below market leases in place, leased fee value could be much less.", "replies": [], "depth": 1}, {"id": "e54s6bz", "text": "The property only derives value from its rent roll. Who cares what the building is made out of or how it looks. What kind of sales are the anchors and shops raking in? Is it triple-net? What\u2019s the expense recovery ratio? What\u2019s the Weighted Average Lease Expiration? What kind of debt is it encumbered with, can it be refinanced / paid down without penalty? Can you get a better rate now? Floating or fixed? How is occupancy? What are comparable sales pricing the submarket at? What\u2019s a comparable cap rate? Any indication of NTM NOI? Tax rate? Does your jurisdiction reassess taxes at entry? What\u2019s the expected assessment ratio for the area? Any brokerage costs? Are you coastal \u2014 what is insurance quoted at? Do you need earthquake? Etc.\n\nTHESE are the only questions to ask. Get answers and value the property.", "replies": [{"id": "e55nniy", "text": "Thank you for the detailed information.  The building is not currently occupied and is in need of repairs. I'm afraid the ownee is heavily over valuing the property due to perceived future potential. Once I determine my number, how should I go about negotiations? Should I find a broker? Thank you again.", "replies": [{"id": "e55qkz6", "text": "The current owner is valuing a class B/C retail property because of future potential? What\u2019s their upside story? I\u2019d be interested to hear, lol.\n\nI\u2019d fundamentally value the property using a discounted cash flow / LBO with the best information you get. This really is the only way you can decide a fair value.", "replies": [{"id": "e568amv", "text": "Upside is a new public transit system coming in that will run directly past this location with a stop. Also, the city has taken an interest in the area and designated it an 'emerging district.' Essentially what the owner said to me was that he wasn't really interested in selling and he would entertain an offer. He thinks if he sits on it short term (2+ years) he'll get more? I'm really not sure. Thanks again for the insight. Anything else I need to consider?", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e5clkul", "text": "I learned a lesson a long time ago in real estate.  Sorry this will be short but it gets to the point and hopefully you'll take the advice and not waste your time.  \n\n&amp;#x200B;\n\nWhen someone says they aren't interested in selling.... they aren't interested in selling.  Stop right there.  \n\n&amp;#x200B;\n\nWhen they follow up with but would entertain offers, you're going to be wasting your time.  They are just seeing what the market is out there and what price they could get.  \n\n \n\nOnly work with motivated sellers.... and even that's hard. ", "replies": [], "depth": 1}]