1031 Exchange for Medical Suite

[Olga Nadal]

Hi,

My husband and I are planning on turning the proceeds from the sale of our vacation rental into a commercial real estate deal. Due to the nature of the 1031 exchange time is of the essence. We identified 2 properties and one of them was already sold to someone else so we are left with this one but want to make sure that the numbers make sense and we are not missing anything. Thanks so much in advance.

Asking price: $1,035,000

Offered: $995,000

Space: 3,920 sq ft $18.53 rent per sq ft = $72,672

CAP rate: 7.3%

Lease Type: NNN in Condo building

Existing tenant: Dermatologist with other 3 locations in the same city since 2008. Lease terms at this location 3/1/23-2/29/28 plus One 5 year option to renew

Finance:

Down: $584,000

Balance :$416,000

Upgrades: $50,000

Total: $466,000

Monthly Payment: $3,339

Monthly Income: $6,056

Monthly Profit: $2,717

Interest Rate Average: 6%

Amortization Average: 20 years