8 Commercial Units in Hot Zone

8 Replies

Had a motivated seller call to sell her recently built commercial units. Has 2 buildings with additional 2 approved.  Then, found the owner of the vacant lot next door. He's willing to sell too. Attached is the breakdown. Looks like all we lack is the 20% down. A for Effort?  Forgive the 5th grade document. 

@Leo Varnavas These are proforma for sure. There are only two actual units on location. They're bringing in 3k and 1900 per month.  The other two are approved for build.  The lot next door is avail and will suit 4 units similar to lot 1.  

Also, great question about the $430k. This is just a pipeline dream, despite having already done the research and discussions with sellers. I'm a SFR kind of guy, so this would be way out of my wheel house. Just figured I'd share and see where the wind blew.

I'm always moving, but rarely chasing squirrels. 

@Marlen Weber This is just a concept for now. Thanks for your encouragement. 

@Chris M. Very interesting deal. Good luck with it. Does your pro-forma include a development budget with all soft and hard costs included as well as an operating budget, equity cash-flows, sources and uses of funds, lease-up time table, sales proceeds analysis, etc.? Are you syndicating this deal? Do you have a broker advising on the market and potential lease rates? Have you spoken with potential lenders yet?

@Eric Lefteroff thanks so much for the comment. We're hoping not to syndicate, but not ruling it out either. We're not using a broker, rather doing off market and calculating rents based on previous tenants in the two units and comps for those in the proximity. Very interested in learning more behind your verbiage soft & hard costs? Your questions while intimidating, also very motivating.

@Chris M. Not meaning to be intimidating at all with my questions but very glad if they are motivating you in any way. Hard costs are basically the site prep costs, construction costs, tenant improvement costs, etc. Soft costs are costs such as A&E, legal, accounting, survey & geo tech, title, insurance, loan costs, leasing commissions, fees, etc. Hope that helps.