All Forum Posts by: Cason Acor

Hotels are popular investments for a lot of commercial investors. However, they’ve been hit the hardest by the pandemic and you are buying an actual business, so it’s harder to be hands off. But that also means that you can get an SBA loan to buy a hotel with a lot less money down. 

Another thing to note, is hotels routinely sell for 10+ cap rates, even in good markets. So just because you see a hotel listed for an 11.85 cap, doesn’t necessarily mean that it’s a steal.

I would say set your sights on Las Vegas. It’s a higher growth market and a better transportation hub. Plus it’s a lot closer to Phoenix, if that’s your ultimate goal. Let me known if you need help identifying a specific property. I’m out of Salt Lake City, but have a lot of connections in Nevada. 

Research which properties you think you’d be interested in buying and use sights like Landvision and Reonomy to find ownership and phone numbers. Then start making phone calls. 

Your proforma NOI would be less with either a gross or full service lease compared to NNN. So yes, that would negatively affect your market value.

What sort of terms are you offering? Consider lowering your asking rate or other concessions to get the space filled. A unit with a tenant paying slightly under market rents is better than an empty one. 

They expected you to just blindly accept changing the rate to 10% of revenue without looking at what that revenue actually is? Sounds very suspect to me.

As is, it’s costing you money for them to remain in the space. I say cut your losses and start eviction if you can. 

And what if they do start paying again after you renegotiate the lease? That means they’ve had money to pay this whole time and deliberately haven’t. Even paying partial rent is better than no rent and goes a long way with maintaining goodwill between a tenant and landlord. 

What pricing trends are you seeing?

I think first and foremost is to decide which asset class you want to focus on, at least in the beginning. That will dictate what you most need to learn. 

There is no specific MLS or centralized listing service for commercial real estate. LoopNet is okay, Crexi is another website to look at. But a lot of the industry is relationship driven. Call around to brokers in the area you want to buy and find out what inventory they have available.

I would recommend going the SBA route, so you can buy with a 5-10% down payment, instead of 25-35%. The only issue with that is the business would have to buy the building, not a separate LLC. I'm sure there's mortgage brokers on here with more knowledge than me that can give you a better idea of what that would need to look like.

That’s a good sized facility for a first time industrial lease assignment. There are a lot specifics to an industrial lease that you’ll want to make sure you’re familiar with, such as column spacing, clear height, power requirements, building construction, tenant improvements, etc. Let me know and I can provide some resources that can help you navigate the space. 

An acceptable commission is going to depend on the size of the deal-the bigger the deal, the lower the commission percentage. Your respective market is going to play into it as well. If this building were in my market, I would expect anywhere between 4-6%. Also keeping in mind you’re sharing that if another broker brings the tenant.