All Forum Posts by: Ash Patel

@Chris Pasternak I took @Katie Neason's advice and am in the process of getting a 90 day contract.  Turns out I know one of the candidates thats running for mayor of that town.  I am atleast going to give it my best shot.  The bank wants a six month dark period for other banks.  I will keep this post updated.

THANK YOU ALL AGAIN!!!! - Ash

@Joel Owens - I have to tell you, I have spent countless hours researching as much as I can about strips.  The metrics you listed above are very helpful.  I am grateful that you take the time to help all of us.  If I may keep pushing with few more questions:

How many years do you amortize for your analysis?  

For a strip in this range, do inexperienced landlords usually outsource the leasing/management?

Do you or would you consult out of state clients on deals in their state (e.g. Ohio)?

Is it silly to only look for deals like this in your own backyard and not out of state?  

Thank you again Joel!

I've been researching Strip malls that range from $2.5mm to $4mm.  Under 10 years old, good traffic counts and in growing areas.  In this range, the name of the game seems to be get it 100% leased then sell for an 8.5 cap.  

I construe this as a pretty high risk investment.  If a tenant leaves or rates rise, what little profits you have are wiped out.  I know while things are good, the tenants are paying down a large mortgage and there can be a light at the end of the tunnel.  Below are two examples of Cincinnati Strip malls:  Give me your thoughts on strip centers.  Would you spend your money on investments like this at 8.5 caps?  Thank you all!

$2.6 Million

$4 Million

Thank you all for talking me off the ledge!  @Katie Neason Thank you for the words "feasibility period".  I was looking for the proper way to ask, "let me test drive before I buy". 

At the end of the day, there is absolutely nothing going on anywhere near that area.  On to the next one.  

Do I need to be talked off the ledge?  Below is a picture of a former regional bank (Fifth Third) building.  

5000 sq ft - plenty of parking - 20 years old

Google Earth link: https://goo.gl/maps/hegqrmooRVn

Sale price $90k

I would assume this property can be purchased for around $70k which would make holding costs around $1000/month + maintenance.  The kicker, it is in middle of nowhere.  A small town called Russellville Ohio.  My thought would be to court another local bank to open a branch there.  If not, I would have to try to find a retail tenant.  There are no catalyst that would cause this area to grow.   There is a Family Dollar 1/2 mile away.

What would you do?  At around $15/ft is this too good to pass up or am I nuts?

@Eric Western - Welcome,

I too had and IT career that lasted 15 years until I ventured out on my own. REI has been full time for three years. Mostly commercial, some residential, one mixed use. I am in Loveland married with two kids. Hit me up if I can help with advice etc. Good luck and take the plunge!

Thank you @Neil G. and @Dale Shin.  I wondered this for years so its refreshing to hear I am not doing something out of line.  

I have what I am sure is a rookie question.  Do commercial landlords have keys and alarm codes to all of their tenant spaces?

In my case, I have keys/codes for the tenants that I signed, however, I do not have access for the tenants that I inherited.  There is no problem with me showing up during business hours and I'm sure if there was an issue, I can get a hold of the tenants after hours, but should I have keys/codes to their spaces?  

I have installed cameras for all of my tenants, so there should be no worry on their end about giving me a key.

Thank you all!!!!

@Joel Owens Thanks for giving it to me straight! I agree with you but I think I needed to hear it from a pro. I have to share that I score my best deals from residential Realtors who list commercial deals. They are not familiar with Loopnet/Co-Star, cap rates etc. My last strip was a true NNN purchased for a 16% cap.

In this case, the Realtor took my pro-forma and asked if he can show it to his seller.  He was totally unfamiliar with commercial financing/pricing.  I will pursue this deal if the price comes way down.  - ash  

Thank you @Dave Foster