First Commercial Property investment
I am looking at making my first commercial property investment. I currently have one single family rental that has been a rental for 5 years.
I have found an investment that seems to me like a no brainer. I just have not done commercial nor do I know the first steps in large money cash flowing investments.
Any advice would be appreciated. Here are some of the specs that I know about the investment property:
Property amount: $1,816,000
Cap Rate: 6%
Sale Type: Investment NNN
Number of Properties: 2
Total Building Size: 10,321 SF
Total Land Area: 0.99 AC
Current Tenant is on a 10 year lease that expires June 2031
Current rent is $109,000/yr until June 2026 and increases to $114,450/yr until June 2031
Most Popular Reply
Not sure if I'm missing something here, based on the other comments. I wouldn't pay a 6 cap. Especially if rents aren't increasing for another 5 years. Typically, you want to see 3% annual rent bumps. It's hard to give you a definitive yes or no if this deal makes sense without more info. How strong is the tenant's business? How's the location? What is the demand for new tenants if they vacate? Is all major cap ex addressed?