Newbie Investor and Seeking help on this possible deal
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