Seller finance commercial deal

[Robert Sutton]

I was running my delivery route in the country(Texas), and I came across a commercial retail shopping center. It had a sign, for sale or lease owner financing. It’s under leased but I think the right facade and tenants could really bring up the value. My question is how do I analyze the deal? The country town is small, but not too small. I really think an Urban Air would do well there.

[Ronald Rohde]

Originally posted by @Bob Langworthy:

See what you can get for financial statements and/or tax returns. From there, you will can build out your own projections. Other questions I would want to know:

1) What's the prevailing cap rate in the area? A commercial broker may be able to give you an answer. The cap rate can end up being a negotiating point.

2) What major improvements have they done in the past 5 years?

3) What kind of deferred maintenance exists?

4) Can you see the current leases?

Hope this helps,

Unless you specifically request tax returns in your contract, I doubt anyone will share those with you. Defer maint, yes, leases definitely should, incl estoppel letters as a must.

Find a commercial broker or attorney to write your LOI, get it under contract, review DD, adjust price if necessary, then close.