All Forum Posts by: Keske Toyofuku

Great, thanks for the feedback!

Hi All, I've been looking at a number of mixed use commercial properties in the Chicago area by using BP tools as well as my own spreadsheet analysis.  I don't have experience with estimating costs for retail units and associated expenses (vacancy rates, property mgmt costs, etc.) so advice would be helpful.  To make things a little more complicated for myself, it also needs an extensive rehab, but for the sake of analysis, let's fast forward to when rehab is done and focus on proforma. Here's the summary (somewhat ignoring the listing broker's analysis which seemed overly optimistic):

• 28 Unit in Chicago's South Shore
  • (6) Retail - (3) rented, (3) vacant and assumed to need moderate TI
  • (14) 1/1 apt 
  • (8) studio apt 
• Asking $845,000
• Assumed vacancy rate of 20% (applied to both retail and residential units)
• Property tax per the county stays flat (AV is 120k which is 10% of the EV @ 7.841% if I understand the assessor's logic correctly)
• Total Gross Income - $308,400 (annual)
  • Retail 
    • (2) units 62' x 15' - $600
    • (1) unit 62' x 30' -  $2000
    • (1) unit 52' x 25' - $2000
    • (2) units 25' x 15' - $600
  • (14) 1/1 apt - $950
  • (8) studio - $750
• Operating Expenses - $177,000 (annual)
  • vacancy $61,680
  • capex and repairs $30,840
  • water & sewer @ $11760
  • insurance $6000
  • electricity $2400 (assumed tenants pay electricity and gas, thus this is for common areas)
  • garbage $6480
  • property mgmt $30,840
  • property tax $28,200
• Thus NOI - $131,400

Thanks again for any feedback you might have

Hi Everyone - I just wanted to introduce myself to BP.  I live in the SF bay area and after spending some time in tech, I am looking at transitioning to commercial real estate investing to build our portfolio.  My wife is a local RE agent in the bay area and we have three great kids.  I am currently looking at markets in Chicago and Texas but I'm always open to new areas for the right opportunity. 

I've already learned quite a bit from BP by listening to podcasts, reading forums, etc. and I hope to learn more from all of you and pay it forward to those who come later.  

I'm also looking at taking a prospecting trip to Chicago in the coming weeks so please contact me if you're in the area and want to meet up for coffee, etc.  I'm of course happy to meet up w/ any of the local San Francisco Bay Area folks as well (I'm in the east bay).  

Thanks!