All Forum Posts by: Chad McIver

"What kind of lease is the Retail space on?? Are there restrictions on what type of retail can go in there??"

I believe they were on a 2 year lease, I will be talking to them to see if they have any interest in staying

"If they leave how much would it cost to re-tenant the space?? "

Excellent question

"If the rent is well below market than you should be able to get a new lease commitment before you purchase at a higher rate.Does the lease not have graduated payment clauses in there??"

I have yet to see the current lease agreement

"What about the current retail tenant are they a mom and pop or a credit tenant.If you got rid of a mom and pop that was there is this a location a credit tenant would find attractive??"

Yes I believe so. The street it is located on is home to many restaurants,bars, and other retail operations. Current tentant's website: http://carolstreasure.com/

"Usually retailers make most of their money during Christmas.In fact many will make a profit or go out of business simply based on the numbers at the end of the year.If the strongest sales cycle has passed it might be hard to re-rent to someone else."

Possibly so..

"What are the immediate other retail spaces offering per square foot??"
Other spaces I found are being offered up for $10 SF. This retail space is approx 3000.

"Where the updates completed up to code or would they give you future problems??"

Something I def. plan on checking into.

"You can't base rent solely on sq footage.That is a massive mistake."

Totally agree, this is a high traffic corner location, with excellent space.

"Have you talked to the existing tenant and do they plan to renew and if not what problems have they faced?? You need to see what is the highest and best use for your retail space and go after that tenant.Many landlords just rent to any retail tenant that comes along and that is where the big mistake happens."

Good advice!

"You need to do much more research than just what you have posted.I agree the numbers are too light. "

Thanks for the insight, I have zero experience with anything commercial and hopefully the experienced investors like yourself on the forum will help get through it!

The income/expense report was copy and pasted directly from the MLS listing. I will be meeting with the agent next week to get more info on the expenses.

What would be a good reserve for capital expenditures?

Im really hoping I can get the property for something closer to 350k...

I do agree that more analysis is needed and after I get more info from the agent, who is very familar with the subject property's market, I will post it up...

Thanks for the help!

Property is a foreclosure in a historic city, with plenty of traffic. Asking price is 400,000. 7000 sq. feet.

Building is 3 levels.

First level is retail space that is currently rented at $2000, but lease is up in a few months.

2nd & 3rd level are lofts, that consist of 3 units. Current rents are $1000, $900, and $850.

Building has been completely updated within the past 5 years.

My plan is to move in owner occupied, live in one of the lofts and hold and find new renters for the retail space, which is rented below market rents for the sq. footage, approx 3000.

Gross Operating Inc $50400.00
Total Expenses $12234.00
Net Income $38166.00
Assessed Value Land $48750.00
AV Improvements $518280.00
AV Total $566850.00

Looking for financing now, and hoping to make make a deal on this.

Let me know what you think

Property is a foreclosure in a historic city, with plenty of traffic. Asking price is 400,000. 7000 sq. feet.

Building is 3 levels.

First level is retail space that is currently rented at $2000, but lease is up in a few months.

2nd & 3rd level are lofts, that consist of 3 units. Current rents are $1000, $900, and $850.

Building has been completely updated within the past 5 years.

My plan is to move in owner occupied, live in one of the lofts and hold and find new renters for the retail space, which is rented below market rents for the sq. footage, approx 3000.

Gross Operating Inc $50400.00
Total Expenses $12234.00
Net Income $38166.00
Assessed Value Land $48750.00
AV Improvements $518280.00
AV Total $566850.00

Looking for financing now, and hoping to make make a deal on this.

Let me know what you think

:lol:

I was the high bidder earlier this week at a W&W auction, and this is the exact situation I would like to avoid.

Hopefully you can get a response ASAP.

It is not fair to have you waiting, not knowing.

I just won the bid on a condo this week at W&W auction. Guess we will see what kind of response I get, if it comes before the 14 day deadline.

What I find interesting within my reading as that some suggest to setup a seperate LLC for each property you rent/ or flip..

Thanks for the prompt and informative reply!

I have done a little research on pre-foreclosures, and maybe it is something I should focus more on with my current $ position. Preforeclosure propertioes are easy to find, as they are listed in the MLS tax records. Based on that, wouldn't there be many other investors barking up the same tree? If so, I would need to do something that sets me apart for the crowd.

A partner is something I have been considering, and I have someone willing to work with me that has a similar cash position. Would it make sense for us to partner up in the LLC or to setup a joint venture agreement, with my LLC?

Mixing appraisal business with investment business is not something I will ever consider, and will make sure to not misrepresent my self at any point in time.

Little background..

Im a certified real estate appraiser in St. Louis, MO.

I have enough capital to outright purchase my first investment property and flip, but based on current market conditions I feel that purchasing REO/auction based foreclosures, fixing , renting, and selling 3 years out is the optimal plan.

The problem I have is I do not want to spend all my capital on one property. I can not be successfull without leveraging my $.

I have excellent credit, but I feel that Conventional financing will be an issue as Im self employed and can not provide suffice DTI.

Could I setup an LLC and fund my first property. Then go to a commercial lender and show that I have postive cash flow on my first deal and hope they refi me to fund my next purchase?

Thanks in advance for your replys!

Thanks for the replys! I will continue to research old post throughout the forum.

I will post in the starting up thread!