All Forum Posts by: Tanh Truong

Does the lot already have utilities on it? Option 2 sounds like the better option considering the ROI, but I would challenge you to look at it long-term as well - will it be easier to sell in the future as a mobile home or as a steel building rented out to a business?

@Mike B. Very true, but in commercial oftentimes the tenant pays TI, so you're not out of pocket any money for reno. Even if the tenant would like to negotiate some TI, you could bake it into the lease and wouldn't be out of pocket for any additional capital. Another option is to get financing terms that include a rehab draw, interest-only periods, or even a bridge loan. 

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Sounds like good debt terms. Why not negotiate terms in your favor? Leave the interest rate and the down payment, but ask for a longer amortization period. Or an Interest Only period.

Actually, it may be possible. And if you're assuming you're unable to utilize OPM. With 500k, it will allow you to purchase a 2.5m property. With a value-add approach, let's say you increase the value of the property by 2.5m within 18 months (aggressive), that would net you with $3m. $3m would allow you to purchase a $15m property. If you're able to increase the value by $5m in another 18 months, that nets you $8m allowing you to purchase a $40m property and 24 months remaining to add $12m in value. Optimistic, I know. But with the right plan and the right deals, anything is possible. 

I've been in commercial for some time now. Is this a NNN lease?

In my experience, less is more. Showing the main info is great in terms in returns, etc. If investors are interested, they'll reach out and you can discuss in more detail. 

Based moreso on Net Operating Income. And yes, if it's 5+ units. 

I have a deal I really want to keep, but it's outside of my buy box.

Here's a summary: 

Location: Hamilton, OH (edge of Hamilton, St. Clair Township, 5 minutes from new Spooky Nook

Type: Gated RV Storage zoned B3 commercial (self-storage allowed)

Occupancy: 75% (61/81); 70% of tenants pay in advance. 

As-is COC: 14%

Pro-forma COC: 50%+

Average rent per space: $43

Market rent per space: $80

@Catherine Davis if there’s a need, it sounds like you have the demand covered. I’m not confident I understand what you’re asking, but I’ll give it a shot. I generally follow the 1-2% rule - if the monthly income is 1-2% of the purchase price (plus reno), it should be a good to great deal. With renovations I don't go over the top - I tend to keep it in line with the other rentals in the area. For me, builder grade cabinets, formica countertops, traditional appliances, and vinyl planks for flooring do the job.