Should I buy this one? MultiUse Medical

Question

My wife is a podiatrist, and owns a practice downstairs for the past year. Now upstairs, there is a 3 bedroom condo which is renting for 1200, while her medical office rents for 1700. We have an option to buy the small building for 300k. Should I buy the building?

Isaac S. · Answer

Thanks for the input guys! I will try and negotiate this!

Vinod Dasani · Answer

@Isaac S. - One other benefit of buying the property is your ability to claim depreciation on the building which reduces your tax liability.  However, you also have to consider what out of pocket expenses are there now that are being paid by the landlord e.g Property Taxes, Maintenance, Water etc and then see if the 1-2% rule works for you if not then negotiate the price

Jonathan Klemm · Answer

buy it!

Pete S. · Answer

I am a 3rd year podiatry resident and have the benefit of rotating through several podiatry offices. Some are owned by commercial landlords others are owned by the doc others are owned by an llc owned by the doc or practice. As it was explained to me, the best structure was for the property to be owned by an LLC separate from the practice and your own personal assets. This way you limit the exposure of your personal assets, your practice, etc. I am not a lawyer or CPA but those would be the folks you would want to talk to. Renting to your practice from your LLC would also carry some tax benefits I believe. Other costs to be considered would be snow removal in the winters in Chicago and general building costs. You could/should get all of that information from the current owner. Think utilities and other monthly costs as well.

Good luck, excited to see what you end up doing!

Isaac S. · Answer

Thanks all. My exit strategy would be to sell it to another podiatrist or I'd have to convert all it back to condo for the ground unit, which worries me a bit.

Isaac S. · Answer

I know the condo can be raised a few hundred in rent. Anything else to consider here?

Isaac S. · Answer

He's actually a nice guy, but I see your point. What about numbers wise? Any other factors to consider?

JR T. · Answer

Probably. There's huge value in getting rid of her commercial landlord beyond just the rents you'll collect.