SOCIAL SECURITY BUILDING FOR SALE QUESTION

[A.R Shakir]

I HAVE A OFFER TO PURCHASE A 1.7 MILLION DOLLAR SOCIAL SECURITY OFFICE BUILDING FOR 1.7 MILLION IN CHAMPAIGN,IL THE ONLY ONE IN THE 50-70 MILE RADIUS.  

7% CAP, AND 9.5 YEARS LEFT.

ITS BEEN THERE SINCE 1996.

ANY THOUGHTS ON THIS? INVESTING IN THE GOVERNMENT? 

[Brian Schmelzlen]

Originally posted by @A.R Shakir:

I plan on 35% down on a 30 year mortgage
My concern is the tenant... if they leave I do not think rent is replaceable.
Never bought a place with the government as a tenant

That is certainly a valid concern, but if they are locked in for 10 years you are still in good shape. You should have made a great cash on cash return by that point, and once the government lease is up you have options.  You can try to get the government to renew the lease (they don't particularly like moving either, especially if the building suits their needs), find a new tenant, or sell the building.