All Forum Posts by: Scott W.

9-10%+ CAP rates on current NOI with either (or both) under market rents or addt'l vacancies that can be filled. Rather be picky and not buy then buy and regret later. Want a lot of wiggle room for when things don't go exactly as planned...

I normally approach banks in my area for commercial loans simply due to having existing contacts.  I came across a site recently (commercialloandirect) and not sure if a gimmick or not, but advertising very low fixed long-term rates, non-recourse loans, etc...  I'm looking primarily at $2M+ loans and it seems the local banks all want recourse on these loans.

Any recommendations for $2M+ loans for commercial office/retail space that have longer fixed terms and are non-recourse?  Credit and income are high (I own and operate businesses outside of the real estate industry) so those are not a concern.  We're buying very cash-flow positive properties at discounts so should meet all requirements that lenders have re: debt-to-cash flow ratios, etc...

Thanks in advance BP community!

Originally posted by @Ben W.:

Scott, if it is the one that I believe it is, it may not be as great a deal as you think.  If it is that one, it has been marketed for some time.  I mostly do buy and hold of residential but do own one strip center as well.  Don't know your experience, but neighborhood centers are much different than the bigger centers. 

Feel free to PM me if you want to discuss.

Ben

 Thanks Ben - i'll PM you...

Thanks so much Joel -- i'll contact you privately re: the OM...

Thanks Sean.  I'm more curious as to why a fairly large shopping center is 60% vacant -- and if it's due to poor management of the property and too aggressive rent prices.... or if it's b/c the neighborhood no longer supports a big retail center like that any longer, if the property has just lost it luster, needs to be brought back to life, etc...?

Hi All-

I have the opportunity to purchase a retail center in Cincinnati that is currently ~60% vacant -- it's in Hamilton County in zip code 45240 (I believe Forest Park is the actual city).  Was hoping someone from the Cincinnati area could shed some light on the area, etc... before i explored any further...

Thanks in advance...

Thanks for the feedback all.  Was hoping there was a creative way to (legally of course) do this deal to enhance our return and minimize our risk... but it sounds as if no bank will go for it the way i am envisioning.  

@Joel Owens - do you think the bank would allow you to take the funds and place them in CVS bonds over that 10 year period (so at least you received a chunk of the interest on that $) or would they only like to see the $ sitting in an Escrow account during that entire time frame?

Thanks Nate -- it's not the tenant that owns the property - it's the seller. The tenant won't sign another lease -- i'd like to know how i can structure the deal so the Seller pays my group (the Buyer) the $1.4M at closing vs. discounting the purchase price by another $1.4M. So essentially we'd be purchasing the property for $8M (which is still a 7.75% CAP on a property that normally has a 6%-6.5% CAP) so the bank is still financing 75%-80% of true appraised value... and we'd be getting another $1.4M back from seller at closing (making it truly a $6.6M purchase and enhancing our cash-on-cash return). Is this doable?

Hello All-

I have the opportunity to purchase a 3-property portfolio all with a major chain store and triple-net leases.  The main leases expire in 10 years -- and then there is a 3 year rent holiday -- and then there are multiple 5 year options to renew.  This is a credit rated tenant and all 3 properties are in great locations.

The portfolio is being offered at a 7.75% CAP -- which is 1%-2% higher then normal CAP rates for the tenant -- so appraisal should be easy. The Seller is offering an additional credit off the sales price or credit at closing due to the 3 year rent holiday (comes out to $1.4M)

My question is -- I can buy the portfolio for $8M.  I want to put 20%-25% down ($1.6M-$2M) and have a bank finance the rest.  That part i'm not concerned with -- what i want to know is:

"How can the seller -- instead of discounting the price of the property by an additional $1.4M -- offer me the $1.4M in cash at time of closing"  So the bank is still only loaning 75%-80% of the appraised value... i still put up 20%-25% in cash... but i then get a big cash check at closing - or in a side escrow deal - which enhances my cash-on-cash return that much more.  I would take $X per year to set aside over the next 10 years to make sure there were required funds to pay the 3 years of debt payments during the rent holiday -- and would even put that $ in the lending bank's checking account so they had proof that money was being accrued."

Any help on how i could do this deal (ie: how can i get this cash back at closing legally of course) and what types of lenders i should be talking to that would be potentially interested in a deal like this?

Thanks in advance!!!!!