What information do I need to get before buying a commercial prop

[Cory Sparks]

I am helping someone out that is looking to buy a commercial property. It is a strip mall with about 14 units with a cap rate of 8.37%. I am doing all the calling around to get all the numbers. I will be a property manager for him once he buys something. I have never bought a commercial property and don't know what information I need to get to relay to my buyer. Anything helps, thanks in advance. 

[Spencer Vickers]

@Cory Sparks

This is a great starting place for you in Commercial Investing and an incredible thing that you are taking the time to understand the intricacies of the deal on behalf of your buyer. I can already tell you will be a good property manager for them.

If you are looking for the basics, here are a few:

Average Occupancy

“T-12” Revenue, Expenses, and net operating income (Trailing or most recent 12 months)

First-Year Returns: CAP Rate is unlevered yr 1 yield. Understanding the yr 1 levered yield gives a good indication on how an asset will perform going forward (yr 1 is a whole lot more certain than year 5)

Here are a few things that may also be helpful but are really the investors’ job:

MSA (Metropolitan Surrounding Area) Drivers: Pop and Job Growth

Holding Period Returns: IRR, Cash-on-Cash, NPV (A quick Google search will give insight into these

This is probably a good starting place. Let me know if you would like more info.