Help wholesaling a Commercial Property....

[Mike Nelson]

So I had a lady call me today about a commercial property located in MD. This is a used car lot and she is desperate to sell, I would really like to wholesale this deal but I'm really not sure how to go about this.

How would I evaluate a property of such? She asking for $650k but I know she would take much less.

[J Scott]

The big questions you'll need to ask (and most investors are going to ask you when you go to resell) are:

- What are the details of the land (size, shape, zoning, any restrictions, etc)?

- Is the owner of the land also running the business? Or is there a tenant leasing the property running the car dealership?

- If there's a tenant, what are the terms (and expiration date) of the current lease?

- If the owner is running the business, does the business come with the land? If so, what is the NOI?

- What is the highest and best use of the property (can it be used for something other than car dealership to make more money?

Once you have that information, you can start to evaluate what the land (and possibly the business) is worth and that will help you determine what you can sell it for and the most you should be willing to buy it for.

If the land is leased or if the business comes with the land and the highest and best use of the land is this business, a simple income based analysis using the NOI of the lease or business should give you the value.

If the business has no value, then all you care about is the value of the land, and you'll need to find comps for other, similar pieces of land in the area.

Once you have the value of the land (what you could sell it for), subtract your desired profit and that's how much you could pay for it.