All Forum Posts by: Brian Serina

Hi Sudhir, imho Folsom is #1 place to live in the Sacramento area.  We moved here in the 90’s because of Intel and love it although it is starting to really grow.  Look up Folsom Ranch and see the development they are doing.  FolsomRanch.com.    Not too sure if this w/b the place for non-personal residential investment.  Feel free to reach out if you have any questions.

Jeremy, 5.4% is cheap money on taking paper back on the sale of a restaurant.  Assuming the restaurant’s assets are the only collateral??  The restaurant business is considered high risk and most operators rarely see a profit.  It’s worse than trying to flip homes in a down market.  I am going to guess that your in-laws are using a residential broker??  It is not unusual to see 7~9% interest on seller carry and the buyer’s house as collateral.  High chance the loan doesn’t get paid back.  Remember too,  if the buyer quits paying on that note, your in-laws will have to re-possess the assets and take over the restaurant.   And the landlord will have something to say about that since there is a lease involved.  Also, just a FYI, I sell restaurants and banks rarely will do a loan on the sale of a restaurant.  Food for thought...

Fundrise and live off the annual 8~10%

Thanks for sharing, Spencer.  Section 8, ugh!   Realizing proforma numbers can be difficult and a lot more of a challenge than installing cabinets on your own for the first time.  I am sure, one day in the not to distant future, we will be hearing about some guy in LV who rolled their 4plex into an 8plex. 

 Just a side note.  Get a good realtor/broker in your area - one that you really trust and will look after your best interests.  No need to have a lawyer write up a purchase & sale agreement.  These are simple and redundant deals and there s/b preprinted forms already out there that realtors in your area are using.   Once you have your agreement all filled out (by your broker who doesn’t get paid until the deal closes...) have a lawyer ‘review’ it (i.e., buy an hour or two of his time).    

Hi Breanne,   depending on the size of the job, KS Plumbing out of Rancho Cordova.

https://ksplumbinginc.com/

Hi, as both a business and commercial r/e broker, I can say that assignment clauses in commercial leases are very common, especially retail ones. Any buyer of a business will have to be approved by the landlord (LL), thus the assignment clause. That review of the new tenant costs money and the LL charges for it (in your larger grocery store anchored properties, the review is usually done by some corporate lawyer). Typical fees I usually see are $1k to $2k per each assignment. So, assignment of commercial leases and fees are very common. Two noteworthy items buried in leases that are much more ominous regarding assignments and usually missed by brokers are: 1) the options are not transferable. Say the current owner is in the 3rd year of a 5 yr lease with a couple 5 yr options to extend, the ad will say something like ‘...attractive lease, 2 yrs left to go with two 5 yr options.' Digging into the lease the clause will say ‘options are personal to the original lessee' meaning those options are not transferring to the new owner. You are buying that business with only two years left. And 2) many leases have this ‘kick-out' clause which reads something like ‘if current tenant asks the LL to have his/her lease assigned the LL can terminate their lease with a 30 day notice.' I have never seen it put into practice but I have seen that clause many times especially when ownership is a REIT or PE group.

Henri, great story and insight of what it took you to acquire an office building. I am sure the sharing of your experience into a multi-tenant CRE investment will provide positive encouragement for others to do the same.

 Nap Index??

www.taynr.com

His work seems to be good on a commercial lease I put together for a client