Posted by CJinPA on March 29, 2007 at 06:24:04:
Thanks for the suggestions Allen. The month to months and the anchor tenant (Bank) I intend to get signed on longer as a contingency in the LOI.
Properties don’t move too fast in the area I’m looking so I want to make sure I cover all my bases… this deal is strictly for cash flow.
Please take a look at this deal - Posted by CJinPA
Posted by CJinPA on March 27, 2007 at 19:41:18:
Here are the numbers and other info:
Mixed use commercial:
Tenant 1 - Bank - $3423\month - exp 3/09
Tenant 2 - video st - $2750\month - exp 12/08
Tenant 3 - Gov’t - $1000\month - exp 3/10
Tenant 4 - Shoe Store-$850\month - exp verbal
Tenant 5 - Retail $750\month - exp verbal
Tenant 6 - Apt 1 $425\month - month/month
Tenant 7 - Apt 2 $465\month - month/month
Tenant 8 - Office (vacant) ~$625\month
Tenant 9 - SIgnage Rental $25\month
Total revenue = $9688/month = $116256 (not accounting for the vacancy)
Expenses are as follows:
Garbage $1200
Water $2036
Electric $9986
Gas $8459
Sewage $1863
Maint. $1720
Insurance $2085
Taxes $9005
Total Expenses = $36,354
NOI = $79,902
Asking $850,000
I am looking to put down 100-150K. What are the experts thoughts on this deal? The building is the landmark on main st. downtown… my only concern is that the main tenant is an old established bank that could easily leave at the end of their lease. Should I put a contingency in the offer on renegitiating a longer lease with the bank?
What should I be looking at in regards to hurdles?
Thanks to all in advance
CJ
Re: Please take a look at this deal - Posted by Allen Scott
Posted by Allen Scott on March 28, 2007 at 10:48:42:
These are “Suggestions Only”, are not professional opinions, and are not to be relied upon in amy manner:
Most of the leases are month to month and the other ones expire within a short time period after the purchase. See if it is alright with the current owner to contact the tenants and see if the tenants are willing to amend the leases to a longer time period. In the amendments, seek an increase in monthly rent (over time). If the bank is serious about the location they will negotiate, if not, it could sink the deal for you. What does the building appraise for? What are the conditions existing in the building. What is happening to the surrounding neighborhood? There is more to look at than just the cash flow in this deal. Be smart - do some serious homework first.
Response - Posted by CJinPA
Posted by CJinPA on March 29, 2007 at 06:27:42:
Allen-
TO answer some of you questions… The area is stable, the building has just gone through a total renovation (2003) and this is why the maintenance is so low in 2006. I am having the building appraised now so I’m not sure of that answer yet.
And yes, I agree, if the bank doesn’t want to negotiate, it is a deal breaker.