commercial units are only cherry on top

[Jason Malabute]

Sometimes you'll come across mix used properties. A mixed used property is an apartment complex with residential and commercial units.

My advice is to only buy these assets if you can purchase these properties if you can make the numbers work while underwriting the deal without including the cashflow from the commercial unit and still get desired ROI.

The thinking is that as retail businesses move towards more to online platforms you want to protects your investment incase tenant moves out of commercial unit and is vacant for a long time.

I was just going back and forth with seller of a 12 unit with a commercial unit today. He wants me to pay full amount of NOI (to include commercial unit cash flow and no vacancies).

I walked away. NO DEAL IS BETTER THAN A BAD DEAL.