All Forum Posts by: Courtney Duong

Hi, 

I am in the process of starting my first deal for a storage unit facility. I have been researching and analyzing deals for about 2 years now, and I am ready to move forward. I would like to get some insight on what is fair/reasonable/good deal for this storage unit facility I am looking at for my Letter of Intent (LOI)

The broker is telling me that the next step is to put in a Letter of Intent. This is the info that the selling broker is asking for that I am looking for insight on:

-Due diligence time frame    (What is reasonable here? 30 days?)

-Closing time frame-Earnest money - we are looking for at least $10,000 to be held by a title company    (Is this fair and reasonable?)

-Evidence of cash and of financing     (Does this have to be a Financial Qualification Letter or can it be something else?)

- Any contingencies - however - my owner is sensitive about that - he won’t do a financing contingency - our view is that you have 30 days to look at everything and pursue financing.       (I am doing a SBA loan for this, and the bank is asking for a LOI. BUT, the LOI is asking for evidence of cash and financing. It's like they are both dependent on one another. How do I navigate this?)

Any assistance would be greatly appreciated!

-Andrew

@Arturo Fuentes Send me a DM and I will send an Excel worksheet and guide that will give you a good introduction to CRE

Hello! Just wanted to find out what a typical security deposit is for a commercial space when negotiating a lease agreement?

Current quote is $15,000 with a cap at $18,500. Project will be around $175,000 - $200,000, so about 9%. From what I can find online, that's not unreasonable.

Current quote is $15,000 with a cap at $18,500. Project will be around $175,000 - $200,000, so about 9%. From what I can find online, that's not unreasonable.

@Venkat K. My opinion on the free rent for x months is just that, no revenue for x months.

Reasonable. 

May I ask the specifics of the 6 months of free rent? Is that a hard date or contingent on tenant's permit application or approval?

Have you considered negotiating the commission percentage from 4% to a lesser amount? Building a good reputation with tenant reps is important so keep that in mind, they frequently share owner info. 

If paying the commission is of major concern, I'm curious about you thoughts for tenant improvement allowance and how you've navigated that topic with the prospective tenant so far. 

You can negotiate to structure it however you’d like. How it’s presented here, monthly, quarterly, annually, whatever. I’d also add that 4% commission is a little high if they’re just the tenant rep, and not representing you as well. Everything is negotiable.