Hi Bigger Pockets,
My name is Julian Matta and I'm a co-owner of a business in Santa Fe Springs, CA. I've been listening to the Podcast and reading some of the Bigger Pockets books that Brandon wrote. My business partner and I are looking to move to a 11,052 sqft building down the street but we definitely don't want to overpay for the building as we already are quadrupling in size, buying machines and taking on a lot of debt. I ran the numbers but not 100% sure I'm getting the correct calculations so I wanted to reach out and see if someone can help us.
Here is the info on the building we want to purchase:
11,052 sqft
$169 per square foot
Needs about $100,000 in repairs (roof, electrical, paint, cleaning etc.)
Rents for 0.82 cents per square foot.
We would put 25% down and pre-approved for the rest of the purchase price at 3.85%
A similar comp down the street that just sold:
11,747 sqft
$163 per sqft
rents for $.79 per sqft
The building was move in ready, no repairs needed.
When you compare both properties it would seem that you would come to the immediate conclusion that we are getting a bad deal but I'm just wondering how much to offer. We are thinking we should offer no more than $158-160 per sqft for the building because we are taking in to account the time and $100,000 needed to bring the building to safe and working condition.
Any help would be great. We are a successful business with a lot of cash on hand. In the next year I'm also looking to start investing in real estate and my path would be buying and holding and bigger pockets seems like a fantastic place to start networking! Thanks in advance for your time and advice.
