Input requested pls! Nice mixed use prop with some risk

[Dennis Luker]

Greeting all. First time poster, long time listener (somewhat).

First off, thank everyone for making the community as awesome as it is and I would like your input on a current deal that I looking to contract along with risk assessment and any wordly advice from those who may have some experience or knowledge from the mixed use, commercial, or any sector for that matter.

Here are the details:

Duplex w/ commercial retail space on street.

Purchase price is $435k. Gross Revenue is around $62k per year ($3000/mo from duplex, $1700/mo retail, $460/mo misc-parking. NOI approx $49k. CoC is about 11%. Total ROI is about 18%. Location is in a A-/B+ area. Duplex is currently vacant but should easily rent as it is in a highly desirable area and retail has an existing tenant on month-to-month.

Retail space is my main concern at the moment especially with the current tenant being a long(er) tenant as a Vape shop that most likely sells CBD and the likes. So my question is 1) Does anyone have any experience in this area or care to share their opinion in general 2) What risks and possible solutions would you assess this situation? Obviously my main concern is I allow the tenant to stay, the risk of litigation that may arise from this business sector. If I have them vacate, then I am dealing with a retail space that I have no experience with and would need to fill in a desirable timeframe. If I elect to have them stay as they are only revenue source at the moment, I will need to secure mixed-use property insurance which I am finding is not that simple at the moment for this particular scenario.

Just curious what you all think about this deal and if anyone has any experience with any mixed use properties especially please feel free to chime in as I would very much appreciate it. Thanks!

Dennis