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Updated almost 5 years ago,
Triple net - With a gas station
Hello all!
I have been presented with an opportunity to invest in a commercial property, a triple net property with 6 units.
Currently 3/6 are leased. 2 of the 3 leases end this year, another one it leased until 2028. The asking price is 1.65 million. I always thought that valuating a commercial property was (NOI/CAP rate) - cost to stabilize. Currently the income is about 67k a year / .08 (8% cap rate) - 60,000 for a year to stabilize (worse case scenario). This has the property at about 782,500. Which is almost a million less than asking. Also, this doesn't take into consideration that the property will be 5/6 vacant in the next coming year.
Also, the property comes with a gas station with 6 pumps and currently vacant. What should one look out for when purchasing a property with a gas station on it?