Commercial property questions

[Brad Birky]

I found a commercial multi unit property on loop net that I am interested in pursuing. It is set up as short term rentals and being sold turnkey.

I’m new to the commercial realm - do I need to search out my own broker to set up a showing?

I am also wondering how to come to a valuation, since I would be buying more than just the property (it is fully booked for the holiday season and the sale also includes all FF&E). Is there a formula based on revenue that is generally accepted?

Thanks in advance!

[Ken Naim]

@Brad Birky loopnet will have contact information for the listing broker or you can have your broker reach out to them.

Commercial real estate is valued 3 ways. Based on the

1. Net Operating Income, NOI

2. Sales comps

3. Replacement cost

Short term rentals are part real estate investing part business, so it is a hybrid model. Pricing a str based on the NOI will have you overpaying as business typically sell for less than real estate for the same NOI as it is much more active. Also str can vary widely between the off season and season. Price based on ltr with a premium but make sure it makes sense if the str doesn't work.