All Forum Posts by: David Switzer

This was a very good read Chris, thanks for posting!

 Thanks Chris!

 This is excellent thank you!

Oh, what I meant was a single commercial condo, not an entire building.  Somewhere between 1000-1500 SF, and the locale is excellent in a market with many people moving in and new developments coming in.

I should have said "unit" and not "building"

I understand that Cap Rates are not a set number in an area/property, and they depend on many factors.  So here's my question:

How do you strike a balance between higher cash flow vs building value?  Example:

-------------------
Tenant A - Grandma Millie's Sewing Shop
Been in business 1 year, decently profitable, signs 5 year lease.
Rent = $60,000/year

Tenant B - Eye Doctor office.
Been in business 5 years, quite profitable, signs 5 year lease.
Rent = $55,000/year

Tenant C - Subway
5 year lease
Rent = $50,000/year
-------------------

If I assign the following Cap Rates, I get these building values:

Tenant A / 10% cap rate
60k/.1 = $600,000

Tenant B / 8.5% cap rate
55k/.085= $647,000

Tenant C / 7% cap rate
50k/.07 = $714,000
(or even $45k at 6% cap rate = $750k)


-------------------

I just made up all of these numbers.  What I'm basically asking is, how do I find the right balance between cash flow and increased building value?  I.E.  $15k more in cash flow per year vs $150k in increased building value

Your unit only has to be compliant for tenants?  Not for customers?

This is for a retail space

Hey all!

I am interesting in a small (brand new) commercial condo, and when I entered for a viewing the floor had been slightly raised up (I think because of the basement) and there was a long ramp up the side of the room.  I asked why they did that and they said it was for the ADA compliance. (there was a tiny set of stairs also)

The developer told me there was also an alleyway down the side of the building that could most likely fit a wheelchair and had direct access to the condo, so it's possible that would satisfy the ADA and they could remove the ramp on the inside of the unit.

I have never dealt with a property like this before, so I'm wondering, who do I talk to to make sure this unit will be ADA compliant?

 

Yeah I actually searched for credit unions that do commercial retail loans in the area and contacted a few with no one contacting me back!

I'd be putting down 20% at least

Hey all!

I have been looking at many of the various loan aggregator websites for the last couple weeks, and have done the applications and such, but everyone seems to refer me to someone else and they all keep asking for the same information. 

I am looking to buy a retail location in eastern Michigan, and here's the basic situation:

Asking Price (to be negotiated):  $685,000
Sq Ft:  About 4400
Space:  Retail, within a mall
No Current Tenants, but it will not be hard to fill.  

My personal income:  $180,000/year
My liabilities (Personal Home mortgage, other bills, etc):  Around $5000/month
I currently own one commercial condo that's retail, so I have experience.

I am looking for a lender who will give me a loan to buy the space.  I'm flexible on down payment and terms.  I thought this would be easy, but the banks I am used to working with don't lend on commercial retail, apparently.


Thanks,

David

 

Hey thanks so much for the great insight Chris!