All Forum Posts by: Khaled Seirafi

My family's owned a mix use building in San Mateo, CA for close to 40 years now and we have a potential commercial tenant looking to fill our last vacancy. Now these tenants are trying to negotiate property tax and insurance caps, while we've said that we're only agreeing to a NNN lease. The issue is that if we decide to sell, I expect the new owner's property tax bill to jump anywhere from 2 to 3 times our current property tax bill. So the tenant's share of property tax would jump from around $250 to $500-$750 per month, which is quite a significant jump. I know that this is why most tenants would negotiate for a cap, however setting a cap (for insurance and maintenance as well) would also take away from the property's value come time to sell. I'm trying to not screw over the tenant if and when we decide to sell, but trying to look out for our interests as well. Any words of thoughts or words of advice?

My family's owned a mix use building in San Mateo, CA for close to 40 years now and we have a potential commercial tenant looking to fill our last vacancy. Now these tenants are trying to negotiate property tax and insurance caps, while we've said that we're only agreeing to a NNN lease. The issue is that if we decide to sell, I expect the new owner's property tax bill to jump anywhere from 2 to 3 times our current property tax bill. So the tenant's share of property tax would jump from around $250 to $500-$750 per month, which is quite a significant jump. I know that this is why most tenants would negotiate for a cap, however setting a cap (for insurance and maintenance as well) would also take away from the property's value come time to sell. I'm trying to not screw over the tenant if and when we decide to sell, but trying to look out for our interests as well. Any words of thoughts or words of advice?

I'm currently looking at purchasing a property, preferably multi-family, in the DFW area. I'm an out-of-state investor and am looking for properties in the $500-600K range. My goals for my new purchase will be mainly long term growth, although some decent cash flow would be nice too. But again my priority is equity growth. What areas would you suggest that are safe, have solid job growth, good schools, hospitals, etc. Any up and coming areas to pay attention to? Essentially A or B areas with the potential for growth. Also, what are the paths of progress to look at? Many thanks!

I'm currently looking at purchasing a property, preferably multi-family, in the DFW area. I'm an out-of-state investor and am looking for properties in the $500-600K range. My goals for my new purchase will be mainly long term growth, although some decent cash flow would be nice too. But again my priority is equity growth. What areas would you suggest that are safe, have solid job growth, good schools, hospitals, etc. Any up and coming areas to pay attention to? Essentially A or B areas with the potential for growth. Also, what are the paths of progress to look at? Many thanks!

Hi everyone,

I'm currently looking at purchasing a property, preferably multi-family, in the DFW area. I'm an out-of-state investor and am looking for properties in the $500-600K range.  My goals for my new purchase will be mainly long term growth, although some decent cash flow would be nice too. But again my priority is equity growth. What areas would you suggest that are safe, have solid job growth, good schools, hospitals, etc. Any up and coming areas to pay attention to?  Essentially A or B areas with the potential for growth. Also, what are the paths of progress to look at? Many thanks!

@Bennet Sebastian I'm not quite sure about industrial space in this area (Bay Area). I do know that commercial spaces have mostly been leased as NNN. But since Covid hit, there's been a lot of movement away from the Bay Area and California in general. So I've heard leasing agents say it might be worthwhile to get a non-NNN lease. But, they also knew that we are looking to eventually sell. They may be trying to get us to get on board quickly and sell through them instead of telling us to be patient to find that NNN lease. As for NNN expenses, yes our property taxes are quite low. The property was bought in the early 80s. I'm not sure how it is in other states, but when you sell in California, the property tax base will be reassessed and that would double or triple the tenants' share overnight. That is unless they work out a deal with the new owner. I had one potential tenant even ask me if we're planning on selling out of fear that exactly that would happen.

Thanks @Cason Acor. Right now, we take care of water expenses (we don't have separate meters for each unit). But, I'm thinking of offering two months free rent on our ads, as well as to lower the rent somewhat while aiming for a NNN.

So I have a vacant commercial space in San Mateo that I've been trying to lease out. Normally, I only do NNN leases for our commercial tenants. Now I know that with these uncertain times, it might be a stretch to hope for a tenant who'd be willing to sign a NNN lease. But if we were to sell the property (it's a mixed use building with two commercial spaces downstairs, the other commercial space is on a NNN lease), would it hurt its valuation if this space were leased out with a non-NNN lease? If I am able to get a tenant who'd sign a NNN lease (probably not going to happen, but let's just say hypothetically) and then I decide to sell, that will cause their share of the property taxes to at least double and perhaps triple overnight due to the property tax base reassessment. The other space is paying about $260 per month for property tax as it is. So, that would go up to $520 to $780. Not sure if it would be ethical for a new tenants to have them sign a NNN lease while we have the intention of selling.

Any thoughts?

So I have a vacant commercial space that I've been trying to lease out. Normally, I only do NNN leases for our commercial tenants. Now I know that with these uncertain times, it might be a stretch to hope for a tenant who'd be willing to sign a NNN lease. But if we were to sell the property (it's a mixed use building with two commercial spaces downstairs, the other commercial space is on a NNN lease), would it hurt its valuation if this space were leased out with a non-NNN lease? If I am able to get a tenant who'd sign a NNN lease (probably not going to happen, but let's just say hypothetically) and then I decide to sell, that will cause their share of the property taxes to at least double and perhaps triple overnight due to the property tax base reassessment. The other space is paying about $260 per month for property tax as it is. So, that would go up to $520 to $780. Not sure if it would be ethical for a new tenants to have them sign a NNN lease while we have the intention of selling.

Any thoughts?

Hey there,

So I have a vacant commercial space that I've been trying to lease out. Normally, I only do NNN leases for our commercial tenants. Now I know that with these uncertain times, it might be a stretch to hope for a tenant who'd be willing to sign a NNN lease. But if we were to sell the property (it's a mixed use building with two commercial spaces downstairs, the other commercial space is on a NNN lease), would it hurt its valuation if this space were leased out with a non-NNN lease? If I am able to get a tenant who'd sign a NNN lease (probably not going to happen, but let's just say hypothetically) and then I decide to sell, that will cause their share of the property taxes to at least double and perhaps triple overnight due to the property tax base reassessment. The other space is paying about $260 per month for property tax as it is. So, that would go up to $520 to $780. Not sure if it would be ethical for a new tenants to have them sign a NNN lease while we have the intention of selling.

Any thoughts?