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Brian Kraby
  • Real Estate Investor
  • MN
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Building a Dental office to rent out

Brian Kraby
  • Real Estate Investor
  • MN
Posted Jul 17 2018, 09:54

HI,

I am considering constructing a 2200 sf dental office. Due to the specialization of the plumbing and electrical, etc, I will have an above average outlay in cash compare to office/retail space. Estimates from architect/contractor are coming in around 285/sf. The practice will furnish their own chairs, wall fixtures...basically providing the vanilla shell. Dentist is willing to sign a 10 yr lease and is credit worthy. NNN lease.

 I already own the land its going on free and clear.  I plan on getting 10 year loan on the building of a rate around 5-5.25%.  So some questions to ask:

1.  How do I set the rent?  Is it based on my mortgage plus profit for taking the risk?

2. Will the CAM fees assessed on top of the rent to the office have some operations profit for administering the arrangement?

3. How do I set the cam fees?  Since there is no historical value to start from, do I set a number right away or have a contingency to reset   on the next year since it is a de novo building?

4. Do I need a broker or can I pay an attorney to set up everything, or myself?

Thanks

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