All Forum Posts by: Michael Hoss

Sorry for the confusion:

August 2013 Expenses:

Management Fee: $1000

Electric Bill for Sign: 150

Clean up: $320

Lawn:$200

General Maintenance: $60

Then add Insurance: $583

Tax: $1000

Total: $3313 per month $39,756 per year

I am sure i can get a commercial loan on it, i didnt apply, the seller wants out quick and accepting the offer if we can come up with cash quick, her husband who owned the property suddenly died in Sept 2012 and it was in litigation till last month when it was listed for sale. Don't commercial loans take a longer time and wouldn't the home loan be cheaper rate?

I am looking for advise and weighing my options and don't mind paying for experice if someone in the Dallas area can do a walk through with me

Michael,

Yes they did fill 2 empty vacancies in the last months with lease contracts expiring in 2016 adding $2400 extra cash flow

the highest paying tenants are the grocery store, $4000 leased till 2017 and Liquor store $2000 leased till 2015, Barber college $1500, bails bond: $940 leased till 2018, a beauty shop, resale shop and barber shop leased till 2014 adding another $1650 total $10090

Thanks Jon,

I don't have any experience in commercial or retail experience, crime and vandalism is a factor that i need to consider, since you are in the Dallas area, this property is close to the Fairpark area.

The tenants have been there for years, some locked in to leases till 2017 and i don't think they are going anywhere but i never say never.

I am open to learn and not make mistakes, that is why i am here. I wish I had a better way to finance this deal or any deal, i don't like the idea of taking a mortgage on my home and would like to avoid it if possible.

Hi everyone,

Thank you in advance to all the help and advice you provide on this great forum.

I am looking at a Shopping Center in Dallas that is for sale, possibly going under contract today but before I do that I need some input and analysis of how to go about this without major mistakes.

1- Older Shopping Center Built in 1969 in Downtown rough area

2- % 100 leased with leasing contracts extending for 2 to 4 years - Long term Tenants

3- Exterior painted in 2012

4- Roof repaired in 2011

5- New Signs in 2012

6- Resurfaced lot in 2012

7- 13,314 SF with 2 legals - 7 stores - I have a copy of all leases

a- Liquor store since 1984

b-Grocery store since 1999

c-beauty shop since 2011

d- barber shop since 1969

8- Utilities are seperate metered and paid by tenants, tenants do own repairs

9- Seller pays Taxes: $12000/Year, Insurance: $7000/Year, Exterior and Sign Electric $1800/Year, Parking lot daily cleanup $3600/year, management fee is 12000 / Year ( I can eliminate that and do it myself?), Lawn care: $2400

10- Original Asking price: $850K

11- Accepted price:$650K if all cash offer and close in a month, seller husband died(verified) and she just wants out

12- Price per Sf at $850K is $63.84, at $650K is $48.20

13- 2012 Gross Income: $106,080

14 Operating Expenses: $20,840, $12,000 of that is management fee

15- NOI: $85,240

16- Pre tax cash flow: $81,840

17- Cap rate at asking price of $850k is %10 higher if i get it at $650K

18- Cash to invest $500K, I own a paid off home worth $175K, talked to a lender who can get cash out of %80 loan to Value at %3.5 - 15 year loan

so I can get $130K from House and $20k borrow from family to come up with the $150k short to pay the $650K

19- 2013 Current rent collected increased from $8500 to $10090

Breakdown: Rent collected: $10,090

Monthly Expenses with current management company: $1730

Gross: $8360/Month = $100,320/Year

Tax: $12000

Insurance: $7000

NOI: $81,300 with management company - add $12,000 if no management company used

Please let me know how to proceed, good deal or stay away? How to get a proper inspection on a commercial shopping center with 7 tenants, who to hire, an attorney for the contract?

I am in TX

thank you

Thank you all for the replies, I have contacted the seller to get the 3 years worth of tax returns, rent roll and P&L statements, will share once received.
a closer look from 2012 P&L, what can be cleaned, are these typical expenses such as Manager Health Insurance? This property was built in the late 60's but according to seller, it has been kept up with. I hope this gives a better picture of the deal if there is one
I will do a drive by and certainly will hire an inspector if I will move forward. Do I need more than $50K reserve?

$1,500 CLEANING
$3,700 TRASH
$12,500 SUPPLIES
$10,250 REPAIRS/MAKE-READY
$1,700 PEST
$25,000 ELECTRIC
$5,650 GAS
$18,650 WATER
$800 PHONE
$475 ADVERTISING
$29,300 MANAGEMENT
$4,900 INSURANCE
$16,550 PROPERTY TAXES
$6,570 EMPLOYEE SS TAXES
$340 PAYROLL
$3,920.00 gas/phone reimb
$8,400.00 health ins
$390 Misc

$153,000 Total Expense

I am glad to have found this valuable real estate investing forum, I am novice and willing to learn by reading and following advice from the members who have been in my position. I thank you all.
Searching online, I found this potential deal I need your input on
36 class c multifamily unit all Bill paid property in TX 30 minutes from were I live
According to seller, %93 rented, 2 vacant, 9.1 cap rate asking $790k, from 2012 actual P&L figures are as follows:
$225,193.96 Total Income
$152,705.89 Total Expense includes tax, management and utilities, make ready
$72,488.0. Net income, seller mentioned rent is $30 below market currently between $570 to $600
What should I ask, look for, be careful off,
I am 36 years old, IT freelance consultant, works from home, have $400k to invest for passive income, no debt, wanting to retire 55, please advise Good, fair deal or stay away , what to expect in finding financing, what to offer seller based on numbers, what is the going commercial interest rate for a $350k loan? What is the average loan length, can I manage it myself and free about 30k management expense?
Novice who doesn't want to make a mistake with 10 years of savings.
Thank You