Small Retail Shopping Center in nice community - newbie!

[Paul Ross]

Hi all, I've been passively interested in RE for like 15+ years and most recently became quite engaged due to realizing "forced appreciation" and tax benefits of commercial RE.

There is an off market deal that we can get and while I am doing lots of research/reading on my own I wanted to also get this communities take on it.

Here is the breakdown:

- The building is a little retail shopping center that has 5 retail spaces and a garage
- 4 of the retails spaces are rented and the garage is rented for a total of $3375/mo
- taxes are $8,000/yr, insurance we are finding out about (it's near a river with a VERY high seawall so i believe there maybe some flood insurance)

The good
- The building could use a little TLC, just some paint, minor landscaping, parking lot could use a bit of repair, building is NOT rundown.
- We believe rents are under market, they are $700, $740, $925, $600, and $400.
- Tenants seem good, cafe/smoke shop, dog groomer, hair stylist, detailer, and i forget the other one.
- The building has quite a large storage lot in the rear that is not being utilized, this could be used for storage or to house some other type of business like a trailer business, sheds, or anything else - maybe we even have food trucks there.
- the owner is my business partners uncle so we have a friendly relationship to work something out

The Opportunity
- the owner is asking $400k
- the zestimate is $383,300 with a range of $349,000 - $422,000
- the owner does have a mortgage on it, zillow records show he paid $285K in 2019, and that a few months before it was sold for $32k, and in 2010 the building sold for $385k - no idea what thats about
- a building right next to it which was "mixed use" and had 0 tenants and tiny parking, just a 4 bedroom apartment upstairs, a large garage, and retail shop in the front with $0 income sold for $340k a month ago

Things we are unsure about

- is $400K a fair asking price?
- is it a bad time to be investing in CRE?
- how are these numbers?
- is there some type of creative financing we could use?

What we are thinking
- We are thinking that with some elbow grease we can make the building look better
- we are digital marketers, so we think we can market the building better and drive more traffic to it
- we think we could raise rates, and we also have a business that would be the "5th" retail tenant which would pay ~$1000/mo in rent
- overall we think we can "add value" we just aren't sure if these current numbers are good/bad/mediocre and also if CRE is going to implode like ppl are saying it will.

Any help would be much appreciated!

Thank you