Getting closer to Deal #1 - monthly payments freaking me out!

[Obaid M.]

Hello BiggerPockets! I'm getting closer to my Deal #1 seems like (closer than I've ever been)...and I'm getting a bit nervous thinking about monthly payments I'll owe to the lender. 

The property I'm looking at is currently 70% occupied. One of the 4 tenants has less than 1 year left and there are two units currently vacant.

What if somehow none of the tenants renew their leases and I'm stuck with this huge payment that I'll owe. I know every business has its risks - am I worrying for no reason? This is a 12 year old commercial property. Couple of the tenants have been there a long time. About 3 years ago property was 100% occupied I'm told. 

Am i worrying myself for no good reason? How do I verify past occupancy information? What is the worst case scenario I'm looking at if property goes to 100% vacant?

[James Maher]

My suggestion would be to not enter a deal until you have enough saved to make monthly payments for an extended amount of time.  Currently, I only own one rental property but I leave ALL incoming rents in one account so my monthly cash flow piles on each month and I could cover 6 months rent or so.  That being said, I started out with enough in the account to cover 3 months rent in case it was unoccupied.