Which property to buy?
Hi dear BP friends we are new to commercial real estate investment and would like to ask for your input on these two potential investment properties. We have already bought a mixed use commercial property that has a store on the front and three residential units on the back in a small town. There is a parking lot on the back that can potentially fit 8 cars if tenants park as instructed. But we need more parking space because we are thinking renting out one big unit by room so will need more parking space. The rent of the whole property might be doubled if we rent out all 5 rooms. Currently it is being rehabed. There is also street parking option, but not that convenient.
# 1 potential property is next to us (also a commercial lot currently rent as a retail store) and will be for sale soon. If we buy it, we can have more parking space for use for both properties, mainly at night time bc # 1 property uses the parking lot mainly in the daytime. The rent is not that high (not even hitting 1%), and is less likely to increase within a short time. It may not even cash flow if rent is not raised.
# 2 potential property is a few blocks away, also mixed use, stores and residential units currently all rented out. Rent is much higher (can hit 1.4%) and will cash flow a lot more than # 1.
We can only buy one with our current fund. Which one makes more sense? We appreciate any input and creative ideas! Thank you!