Help Analizing a comm property

[Bob Romano]

Can anyone help me analyze this deal ? Asking 1,250.000 , rent is $7500 month , tenant is in till March 2027. Has modified gross lease 

I would keep tenant until then , then move my business in it. 

https://www.loopnet.com/Listing/103-Glenham-Ave-Warwick-RI/3...

[Masoud Arouni]

@Bob Romano Henry's due diligence checklist is solid. The financial picture is worth running before you get that far though.

At 7500/m that is 90000 annual gross rent. On a 1250000 purchase price your going-in cap rate is 7.2% before expenses. For a modified gross lease in Rhode Island that is reasonable but the modified gross structure means you need to read exactly which of the expenses you as landlord are responsible for, typically property taxes, insurance, and roof/structure fall are on the owner while the tenant covers utilities and internal maintenance. Get clarity on that split before you underwrite anything.

The bigger issue for your situation is that you are planning to owner-occupy in March 2027. That means you are really buying this as an owner-user with a short rental window, not as a pure investment. The analysis should include a rent versus own comparison for your business — what are you currently paying in occupancy costs and how does owning at a fully loaded monthly cost compare. At 20% down on 1.25M your mortgage payment alone at current rates is roughly 6700/m before taxes and insurance. If your business occupancy cost today is less than that all-in number, the deal needs to pencil on other merits like building equity and appreciation.

What is your current monthly occupancy cost for your business?