All Forum Posts by: Bharath Raj

We are still negotiating, but it seems to be heading in the right direction. What would be the best way to finance the landlord portion of the build out, from a tax perspective? I am hesitant to use my own cash. Is there a rule of thumb amount that I need to hold in my reserve? 

I decided to not go into a contract on this "pseudo deal". Thanks guys. 

I offered additional $/sq ft, and now I have a offer from a physician to lease the whole space (1700 sq ft is built out by prior physician tenant, 1900 sq ft is shell space). The tenant rep is asking for the landlord to pay for all electrical, HVAC, ceiling, walls and plumbing. They want to provide us a design, which means I may have to knock down walls from the part where it' already built out. Tenant is willing to sign a 5 year lease & pay for finishes (flooring, sinks, etc). Tenant has roots in this part of town and had to move due to unfortunate events (plumbing issues + mold). When I was looking up how much it would cost me to handle the tenant' requests, I found random numbers ($50/sq ft for shell space without finishes, $25/sq ft for previously built out space). How would y'all recommend negotiating the build out and lease (NNN lease)? Should I engage a real estate attorney at this stage to draft a lease?

@Vijaianand Thirunageswaram I have been looking hard in the Kingwood area for ~1 year now. I don't find any office space available @ 7% cap. I am currently using a commercial realtor, but haven't been ale to look at too many off market deals. My timeline to move makes me reluctant to pass this over. 

Would you consider this if the price can be haggled down to $650000. That would be a cap rate of 5.2%. 

@Jerry Shen The bank is BBVA compass commercial lending division

@Ronald Rohde My current lease expires in 9/19. I want to move in to my own space by then. This prospective office has a dentist occupying 1/3rd, with the remaining space all being very small (100 sq ft to 250 sq ft) offices with short term leases (no more than 12 months). From a convenience perspective, this seemed like a good fit. I do understand that the price is on the higher side. 

@Joel Owens I will definitely look into strip centers. 

@Andrew Johnson I went back and offered them $650 k with conventional bank finance. I am willing to walk away if they don't take it. 

@Casey Mericle I am looking to buy since I will be moving my business into it. I have been leasing my office space for almost 2 years. After I found biggerpockets, I decided to buy instead of lease. I am trying to"officehack" so that the other tenants pay almost all the expenses. It's been very difficult to find any inventory in Kingwood, Texas. 

@Joel Owens I agree with you that the cap rate is less than optimal. I have been looking for inventory on loopnet. How should I go about my search for a better yielding property? Do I call up commercial brokerage houses and have them assign me a buyer' agent? 

I am trying to buy a commercial office space that' 100% occupied. The NOI is $34k (I verified it to be true, with a more seasoned investor). I am trying to buy it for a cap rate of 4.8%. The local commercial bank said that they typically find 4% to 5% as being good deals at this time. I offered $7000000 (discount of ~$100 k from asking) with 10% down and 90% owner financing for 10 years at 4% rate. They accepted the price, but not the owner financing terms. I had previously offered $550000, but increased it because the seller' broker had led use to believe that he could work on the owner' financing. My goal is to pay off the loan in 10 years. The bank will give me a loan for 10 years at 5.5 % to 6% (fixed rate), with 20% down. I calculated by 10 year cost of buying the property as being ~$830000 based on my desired terms of owner financing. How can I get my terms, while also keeping the seller motivated? Seasoned negotiating tips will be greatly appreciated.

@Khanh Tran I have had one showing for a medical group, but nothing sealed yet. Strangely, I had my agent ask me if I wanted to sell it. I told him that my focus was to lease it out. 

@Ash Patel The property is listed on loopnet. I am thinking of self managing too, but I wonder if it will take too much of my time. 

As a consolation, the adjacent building was leased to a chain of Autism treatment centers. So, my building is the only inventory left for medical space in this part of town. That makes me optimistic. If it won't lease within the next 4 months, I will just owner occupy and open up a 2nd location for my own business. That' my exit strategy. 

@Khanh Tran I have not leased it yet. It's not yet listed on loopnet. I am using Justin Clark from "Clark Gaines". I will keep you updated on how it goes. I do feel like I have a better shot this time, but who knows. 

I have a update. I got a new commercial real estate broker. I can already appreciate the specialization he has been bringing in. I spent $2400 to paint the walls, replace ceiling tiles, patch up dry wall issues,& painted the entry door. We had a professional take pictures and will soon list online. I am feeling good about this. I hope this translates into some action.