All Forum Posts by: Joe Gleason

Jon - Many thanks for the advice. Don't worry, you aren't a dream killer. I don't mind risk but am definitely trying to stay away from certain financial doom. This may be a case where it wasn't meant to be but you've given me lots of potential avenues to explore before passing this one by.

Thanks,
Joe

Jon,
Thank you for your very thoughful reply. At this point, I'm probably going to pass on the deal unless I can get it at a much lower price. I suspect I could make it work if the price were closer to 1.5m but I doubt the owner would consider selling at that price.

I've walked through the property and can tell the owner has definitely not put much in to the building over the past few years. Latest major expense was a new roof a few years ago. The heating system is servicable but really needs to be upgraded/replaced. The apartments are in decent condition

There is some room to raise the rents but I think the revenue from that would be offset by improvements needed to the building.

The theatre space used to operate as a 5 screen movie house but is way below today's standards. Its only hope for seeing use again is to return it to its original use as a live theatre space. Easier said than done I know. I have worked in and run many performing arts buildings in my career. It is a very tough business to survive in.

Personally, I don't see anyone making a play for this property. Me, I'm a theatre person and would dearly love to see this gem of a theatre resurrected. I can't do that if the cash flow is negative though.

If I could somehow wrangle the price down to 1.5m and assumed the operating expenses were closer to 45-50%, I think that would work, no?

The city has their tax records online. I have found out that the assessed value of the property is 995K which makes sense given the tax rate of $15 per thousand and the current taxes being paid.

I know the assessed value is not the fair market value but I don't think there should be that much of a disparity. Given the previous information about expenses and income, what would you say the property would be worth?

Thanks,
Joe

Hi Jon,

Thanks for the response. Leases are not NNN. Expenses are as stated. I've got a max of 10% to put down and was hoping to not exceed 2.3 mil on the property.

Is a commercial 30 year possible? I haven't researched the finance angle much at all, just beginning the process now. Any help in this regard would be appreciated.

Thanks,
Joe

Hi all,

I am currently looking at a commercial property in NH. Three buildings which include 22 apartments, 9 retail storefronts and a vacant theatre.

Annual Gross income is $252,000
Annual Operating Expenses are $75,000
Assume a 5% vacancy (-$12,600)
Leaves a Net Operating Income of $163,000
Asking price is $2,500,000

All units are rented except the theatre, it needs work and is what I ultimately want to renovate and reopen. For now, I'd be happy if the rest of the property paid for itself.

What kind of financing would be possible on a property like this? Given the numbers above, how much could be financed and remain cash positive?

Any help or advice on this deal would be appreciated!
Thanks,
Joe

Hello Everyone,

Like many folks, I'm new to REI and am here to learn more about it. Of course, my interest has been heightened due to an opportunity that I am currently pursuing. :D In fact, I will be getting my first look at the property this weekend. I'll post details about this deal in the appropriate forum.

Joe