All Forum Posts by: Josh Delaney

@Ronald Rohde yeah my business can handle the whole principle no problem and would actually save me money long run on shipping costs as I would do it myself (team).

@Jason D. Makes more sense now. How do I find out CAP of properties in the area?

@Jason D. Thanks for the response! From what Ive learned cap rate isn't always the best to look at. Location, community, etc.

But this is $1.4m ask and $11.7k/m rental income. Principle will probably be $8-9k/m, NOI is $35k about. So cap is 9%ish.

$1.4m price

$11.7k income

4% rate (waiting on this)

10% down

Is that math right?

@Josh Bakhshi that KS for the response! I appreciate that it sounds like not a bad deal. Landlord status is fine for me. I've owned multiple business and franchises so dealing with many people "customers" and building/unit issues I'm used to. Renting and maintenance should be no issue. I understand stuff can happen. I'll learn as I go if I don't already know it and have an operations team to help.

Really my concerns are price point and is breaking even on rental income and expenses ok?

Data points:

-$1.4M asking price (off market)

-24k sqft flex space

-warehouse/office/some newly renovated space

-3 miles outside of major downtown city and from where I live.

-Very nice building with parking lot, multiple entrances, overhead doors, etc. Good curb appeal.

-Growing community and up and coming neighborhoods for near downtown living.

-Reason for sell, owner is sick and wanting to organize some of his priorities and we have a great relationship. I've also invested a lot of money I to my space so he trusts I can get it done.

-$11.7k in current potential rental income including me. A few open units 2 of which I would take over.

-$12k-13k in potential rental income after I take over. Easy rent adjustments, currently now market value.

-$2500-$3000/m operating expenses including my taxes, insurance, maintenance, snow, etc.

I currently rent 2500 sqft but want to take about 8k-10k sqft for my own business. Keep other units rented to tenants. As I grow I can take over more as leases are up or needed.

I've been approved for everything. SBA loan. 10% down, no penalty for early playoff games, working with a city SBA program.

Owner/Seller is OK with any contingencies for work needed to bring up to selling speed. Maybe $60-$90k in maintenance. 1/3 New roof and some interior updates.

My questions:

It's my first deal, does this generally sound good?

My net profit would be $30-$40k/year, that would go to the expenses essentially having me breaking even.

My thoughts were to have my biz pay entire principal then add tenants income to principle as well. Is that good or bad idea?

***Anything particular I should ask when doing inspections? Appraisal?

I don't know what I don't know. I'm not looking to make money, I'm looking to invest in my business and build an asset. Is this smart at this price?

Any advice?!

Thank you!!!

Im looking at a 24k sqft flex building that I currently rent from. It's a pretty awesome building 2 miles from downtown. Easy access to and from. Parking lot, garage doors, clean etc.

It's rent potential is $11.7k. it's about 1/2 rented and my business could take that empty half honestly. That's apart of the intrigue.

They want $1.4M for it. I got approved for an SBA at 10% down.

The cap rate seems to be 2.7% if I'm doing my math properly but I'm not sure.

Can anyone give me guidance or advice on what to look for or ask to the sellers etc?

This is my first commercial deal.

Thank you so much!