Next Level investing part 3 of Commercial RE Investing

October 25, 2021

So after working with the Mortgage broker, I

1) asked for the numbers on a 600k re-finance on a warehouse that my Holding company owns. The way that is set up , I took money out of a HELOC and loaned it to my Holding Company. The holding company purchased the warehouse and technically owns the property.

2) Received several rates all in the range of 3.5% based on amortization and fixed/varibable 1-5y. Was going to proceed, to the next step but

3) A week later, I got a call out of the blue from an older commercial realtor that I have known for +10Y. I used his company to find a tenant for that 7900 sqf warhehouse. He received a call asking if my warehouse was for sale. We had a good talk and i found that warehouse space in the area are selling for $400-450/sqf. I found this to utterly amazing. I mentioned that there was a tenant in the warehouse with an option to extend their lease, and it would be hard to kick them out, so in the end we just left it as a no. At that time, I contemplated possibly offering the tenant 100k to leave.

4) Checked the lease, to refresh my memory. Turns out that the tenant had to give written notice in July 2021 that they wanted to extend their lease. If they did, I would have to honor the extension or buy them out. I did not receive the extension notification, as in the middle of summer, that tenant was struggling to pay their rent. I did have to constantly write emails regarding the late payment and put them on a schedule.

5) So I looked at the options, a) keeping the warehouse and doing a 600k Re-fi, then taking that 600k with my cash on hand and buy my next commercial(milti family)

After discussing this with my partner, and we agreed that we would put the warehouse up for sale.