Possibly buying a mixed use property

[Frank Jennings]

I am considering making an offer on a mixed use property. It has 2 apartments renting for $450 a month each and 1 commercial tenant renting for $2400 a month. The commercial tenant is a chiropractor.  If they leave then the property will lose $1200 a month assuming I take out a commercial loan for 80% Ltv. The lease ends June 1st and they have to notify by March 1st if they want to renew. Not sure what to do. If the chiropractor stays long term, it's a great investment. They leave, it's terrible. The location isn't great (not horrible either) and may be hard to find a new tenant.

Should I make a contingency of 100% occupancy? Closing would be in April. Can I speak to the chiropractor directly to learn of their situation and intentions? Because I want to know about their long term plans 3-5 years into the future.

Thank you.

[Greg Dickerson]

Originally posted by @Frank Jennings:

I am considering making an offer on a mixed use property. It has 2 apartments renting for $450 a month each and 1 commercial tenant renting for $2400 a month. The commercial tenant is a chiropractor.  If they leave then the property will lose $1200 a month assuming I take out a commercial loan for 80% Ltv. The lease ends June 1st and they have to notify by March 1st if they want to renew. Not sure what to do. If the chiropractor stays long term, it's a great investment. They leave, it's terrible. The location isn't great (not horrible either) and may be hard to find a new tenant.

Should I make a contingency of 100% occupancy? Closing would be in April. Can I speak to the chiropractor directly to learn of their situation and intentions? Because I want to know about their long term plans 3-5 years into the future.

Thank you.

Yes you can write up the offer contingent upon the chiropractor renewing or anything you else want. Everything is negotiable. 

You can also ask to speak to the chiropractor directly and inspect the spaces as part of the due diligence prior to moving forward with the rest of the inspections.