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Updated about 6 hours ago,

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Dan Cooper
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Buying Restaurant / LazyDog property as a first timer

Dan Cooper
Posted

Hello all -

I have been thinking of getting into realestate investment for a while with a goal of generating income stream (today my only income Is through my job - I make decently as a senior exec). 

I'm planning to move what I have in stock market ($2.5-3Mil) to buy a good realestate. I came across this brand new property, in a great intersection that's leased out to LazyDog restaurant & running well. Property is $6.5M, leased for 20 year corp-guaranteed with a current rent of $450K (10% increase every 5 year). I ran the numbers and looks like a good deal (7% cap rate, 5% ROI, and ROI will improve as the years go by). Moreover, thE Property is in a great intersection in a major metro (household avg income of $200k).
What is the downside/risk here? One risk I could think of is - Even witb a 20 year guaranteed lease, thr company could bankrupt & may put me in a situation to look for a tenant. And, that could take a good 6-12 month given the type of Property (large restaurant). Anything else?