BRRR for a commercial office building

[Bharath Raj]

We are planning to get under contract on a 5500 sq ft office building with several short term tenants (month to month), and one healthcare tenant with a long term lease. Our intention is to vacate the month to month tenants and owner occupy ~55% of the building (office hack). We will give ourselves (via a 3rd party property management firm) a long term lease (we are a healthcare tenant too). We are unsure about the status of any deferred maintenance, but intend to fully fix up/replace any major issues ex: HVAC,roof,etc. We plan to seek owner financing for the initial period of implementing the above plan, until we are able to move into this space. Then, we want to refinance into a long term (20 year fixed with 25 year amortization) owner occupier business loan (may or may not be SBA). What would be the best way to position ourselves to achieve the highest appraisal value in this situation?

Bharath Raj

[Greg Dickerson]

@Bharath Raj make sure the building is in great condition and make sure you get long term leases of at least 10 years from good credit tenants. 

When it comes time to refinance make sure to talk to a bunch of local commercial banks as they all offer different programs rates and terms.