HELP! Offer for Vacant Daycare Building

[Jay Peterson]

Hi BP! I'm looking to purchase my very first commercial property. (Yikes!) It is an old daycare building that hasn't been in about 10 years. The broker says the owner is willing to owner finance. The price is $250k for 5,000sqft and it needs a lot of work. I'd like to keep it as a daycare, fix it up and lease it. Getting a GC and inspector out will take some time. 

Q1: Is it a good idea for me to present an offer to the owner prior to getting the estimates? I'd like to tie it up and negotiate from there.

Q2: In my experience with estimating rehab for residential properties, I think it'll cost between $75k-100k for rehab. Here's what I'm thinking of offering: Purchase price: $219.9k, 15% down payment, payments to begin 6 months following closing, $1,500/mo, 6% APR and balloon payment in 36 months.

Any thoughts?