Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 4 years ago,

User Stats

20
Posts
20
Votes
Ladd Brunner
  • Rental Property Investor
  • Twain Harte, CA
20
Votes |
20
Posts

Commercial Real Estate Opportunity

Ladd Brunner
  • Rental Property Investor
  • Twain Harte, CA
Posted

Almost 3 years ago we acquired a 4-plex that was owner financed, one which we would have had limited opportunity through conventional financing to purchase.  We have since refinanced (3.625%) and cashed him out and now have a very strong long term and desirable asset in our portfolio.  We have built a trusting relationship with him and his family (they have many properties and are looking to downsize) and they are giving us the same opportunity (owner financing) on one of their desirable commercial properties.  He is offering us the same financing structure, which is ideal for us as we both have good w2 income but we're not in a position to acquire a commercial loan.

I understand that there is risk in all real estate transactions but with Covid19, I'm particularly cautious with commercial real estate at this point. Or at least until the covid dust settles. I've read all the dread and predictions, particular with commercial, but I also know that real estate is very local.  These 9 units are not retail but more office/professional.  Attorneys, financial planning, educational (reading center), counseling, etc. in a prime location.   All rents have been current and the complex has 100% occupancy.  Most are on 3-5 year leases with 2 on MTM. Additionally, this is in a desirable Sierra foothill town that has seen a recent influx of Bay Area folks that want a more simple and safe place to live and do business.  Just hope the fires don't reach us!!!

The cap rate is pretty steady here at 6% and I have most of the numbers to determine a fair price. We have already discussed initial ballpark numbers.  There is more due diligence to be done on my part and he's not in a hurry, but I'm starting to think about the potential of this acquisition.  Additionally, l have a trusted property manager, who I also have a good relationship with, that has offered to manage this property for me (he's current manager).  

Any thoughts on this?  I just like to take the temperature of the BP folks and get your thoughts and perspectives and perhaps think about things I haven't pondered yet. I'm a school teacher in the middle of my first week of seeing students, so my analytical skills are shot!!  Send me your initial thoughts!  Thanks.

Loading replies...