Wholesaling Commercial - Posted by David C. Cooper

Posted by David C. Cooper on June 25, 2007 at 14:04:43:

I posted this in the Main News group, but didn’t get any response. So, I thought I’d try here.

I recently came across a commercial/residential building FSBO for $400k. It has frontage on the major highway (highway 101) and sits directly across from the local marina with great views of the harbor, lighthouse, etc. The building is in great shape with about 1600 sq ft of retail space; about 1200 sq ft of residential downstairs and 1500sq ft of residential upstairs that are used as vacation rentals.

The business currently occupying the downstairs space will be vacating and current rental rates for commercial propery here runs $0.70-$1.10/sq ft.

There is also a 30’ easement along the rear of the property that hasn’t been used in years and another lot across the easement that the county is trying to sell.

What are the differences between wholesaling commercial and residential properties?

How would I determine my max purchase price? (the same FMV*.7-repairs formula used for residential or?)

What other costs do I need to anticipate besides the normal expenses connected to residential RE?

What kind of extra due diligence will I need, or my wholesale buyers expect, on a commercial property to properly structure this deal?

Any ideas or suggestions are appreciated.