Multi-Tenant Commercial Building Deal

[Mike Zhou]

Investment Info:

Mixed use 2 commercial building , one building (4 apt units, 2nd floor) 2 store front (first floor) and  one large (5000sqt) storage building  attached buy & hold investment.

Asking price: $650,000

What made you interested in investing in this type of deal?

Current CAP rate is 11+%, (5% vacancy estimates) value added to raise rent 10-15% to market rate. Good location, next to a CVS store.

How did you find this deal and how did you negotiate it?

I found this deal from a broker. Owner holds the property for 20+ yrs and retiring. 

How did you finance this deal?

Seller is willing to do whole or partial finance. Also local bank is willing to do the finance as well.

How did you add value to the deal?

I plan to  reduce expenses by charge back utility and raise rents to market rent.  Might need to invest 30-40K for capx with roof or other areas.

What was the outcome?

In the processing evaluating.

What suggestions requested ?

1. My first time investing the multi-tenants deal, any gotcha for these mix-used commercial building ? 

2. Would retail store/storage owner pays the utility typically in this type of deal ?

3. What target price I should going for ? near by comp sells 7.9% cap rate (better location)

4. How  to structure the seller finance ?

5. What due diligence should be done for such investment? visited the property once and seems in ok condition.