All Forum Posts by: Zachary Webster

You should be able to copy the link and paste it at the top of the page. Anyways, the MI grant (covers 50% reno. for the upstairs) requires that you rent to low/mod. income for 5 years so the ROI is ~7% and after the 5 years it goes up to 8% with cash flow of ~$25,000. These numbers are conservative and include all vacancy (10%) cap. expense (5%) and operating expense (5%), mortgage, property insurance and taxes etc.. All utilities would be paid for by each unit's tenants. At year 10 ROI is ~10%. 25k cash flow per year seems great, but that's with us paying ourselves 2k/month for the rent for the downstairs unit, which makes it not seem so good. That's why I go back to the ROI and feel like 8-10% is way too low for this type of renovation. Thoughts?

We're looking at a building that has a cafe on the 1st floor, which we would operate, and the 2nd floor is vacant-would be renovated to 3 apartments. Current asking price is 375K, but I think it's worth closer to 300k. Renovation of the upstairs would take ~450k (including a new roof, AC in the cafe, fixing exterior brick etc.) The state of MI has a grant that would cover 50% of the upstairs reno reducing our reno price to ~300k. The link below shows the breakdown. Is this as straight forward as the numbers show as we'll operate/own the cafe and own the building? We figured 2k for rent to the building LLC for the cafe. Sorry if this is confusing and thanks in advance.

https://www.biggerpockets.com/buy_and_hold_results/783420

Correct, we would be occupying 50% of the space w/an SBA loan.

Hi all,

We are in negotiations on a commercial property and I have concerns about the following two sections we had written into our letter of intent:

- Certificate of Occupancy: Shall be applied for by Purchaser with the Seller responsible for any existing code violations.

-Seller counter: The sellers wants to cap this at a certain dollar amount: $500-1000.

-My thoughts: they already went through cert. and therefor there shouldn't be any/many. They should be responsible for the new cert. and knowledgeable of what code violations there may be

- Other: Seller agrees to refrain from negotiating with any other prospective purchaser(s) or entering into an agreement to sell the Property for a period beginning with the execution of the Letter of Intent through the expiration of the Due Diligence Period so long as Purchaser is proceeding with its Due Diligence and/or is negotiating the Contract.

- Seller counter: seller will continue to market and accept backup offers. 

- My thoughts: hard to police this, but if they accept back up offers then this could drastically affect our negotiation during our due diligence period.

Thank you in advance for your comments.