All Forum Posts by: Brian Ellison

Great comments and questions, @Jonathan R McLaughlin and @Steve Morris, thank you!

The dentist office has been a tenant for 4 years, do not know appetite for moving at this point. Sounds like I have some homework to do there. 

@Steve Morris great call-out on utilities - these are paid for by the tenants. 

Seller is happy collecting a check every month for the property without having to put in any extra work to find tenants, increase rents, or maintain the property. Currently, the seller is self-managing the properties here (meaning the property management cost is also an estimate). 

Hello! Here's the deal: I found a strip mall listed for $900k, 4-unit (fully-leased). Looking to approach the seller with a rent-to-buy option or seller financing at a 10% APR.

• List Price: $900,000
• Tenant 1: Chiropractor, $1,000/mo, 2,000 SF
• Tenant 2: Dentist, $4,000/mo, 3,000 SF
• Tenant 3: Salon, $900/mo, 1,000 SF
• Tenant 4: Individual Business, $650/mo, 1,000 SF

Tenant 1's lease is technically expired and are working off a 'handshake' agreement. Tenant 2's lease runs out in 9 months. Tenant 3's lease goes out 25 additional months, and Tenant 4 is month-to-month.

This is not an NNN property, so I'm accounting for $10,000/year in taxes (based off most recent assessment of $550k * 2 multiple to round to purchase price). Keeping a 10% vacancy reserve of $7,900/year, Property Mgmt of $7k/year, Main't of $7,800/year, and CapEx of $4k/year.

Still with all of these variables, the $3,350/month with a cap rate of 5.8%. 

I am thinking of asking the seller to consider a rent-to-own option where I can come in and work to lock down the handshake leases. From there, I estimate that I'll need to put in work on the exterior to repaint.

After this, I know leases in the area are going for about $14-15/SF (yearly) versus the $11/SF that's currently rented. I feel I could increase this value over time and have a nice monthly income going here.

Punchline: Am I crazy - This seems WAY too good to be true and I cannot help but feel I'm missing something here.

Thank you!

Hey @Joel C.! It's been a while since this post; wanted to check-in with you to see how your journey is going. 

I live outside of Atlanta with my wife, and we are looking at investing in the Evans area. I would love to hear your story!

@Sara Parker Interested to hear if you ended up investing in Lithonia. I too came across some properties here that are worth a closer look. Although in looking at the crime records, I see the city of Lithonia has one of the highest in the Atlanta area. Interested if you are investing there, or if you ultimately did not, what made you change your mind? Thanks!