First Commercial deal

[Bill W]

This will be my first foray into commercial RE.

Here are numbers:

A major retailer already on a 12yr triple net lease increasing every 5 yrs. Brand new building

Purchase price 2,400,000

Mortgage $2,002,500

$1,920,000 first @ 4.25% fixed for 7 yrs amortized over 20ys w/o escrows = $142,672

$82,500 second @5.5% fixed for 6 yrs= $4,538

Cash flow

yearly est $173,500 net income including $4,000 mgmt fee- $147,000 mortgage payments =$26290

Depreciation assuming $450,000 for land and component method $1,950,000/21yrs=$92,857 a yr

This property is Located in the second highest income area in the state at a great location with traffic light.

Any thoughts on this would be appreciated.

[Jon Klaus]

"Depreciation assuming $450,000 for land and component method $1,950,000/21yrs=$92,857 a yr"

Did your CPA verify this depreciation schedule? Commercial is normally on a 39 year schedule. What components are you accelerating to get you to a schedule that is this fast?