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Updated over 3 years ago on . Most recent reply
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Prelim thoughts on 4 unit commercial plaza
Hey BP,
All I've ever purchased to-date are residential (single and duplex) units. I have a seller who offered the following to me. What questions should I be asking? Any thoughts or feedback on this deal would be greatly appreciated.
FROM SELLER: Please see attached leases for 7,000 sq ft office space/retail complex. Excellent rental history with tenants. Two of the four tenants have been there 20 years, the third for 10 years. The fourth is a newly signed tenant who invested over $20,000 in renovations for their space. Total rental income = $84,000 per year, with total expenses of approx. $11,000 per year. There is a net operating income of $73,000 per year.
Sales price = $750,000.
(Tentants are: pizza chain, dentist office, salon, juice/smoothie bar)
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Bueller, bueller, anyone? :)
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Hey @CJ M.
It sounds like this deal has some pluses. I am not a commercial property investor but having the same tenant for 20+ years is definitely reassuring. It shows that the area and clients of these businesses can support the rent for the buildings over a long time period. It also makes me wonder if the owner has also owned the building for 20+ years too.
How do you intend to finance the purchase of the building? If you don't have the financing completely in place or even if you do and you want to keep more cash in hand you should be asking if the seller is open to seller financing. Never hurts to ask.
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