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Author Topic: Corono...Testing....1 2 3  (Read 2051 times)

Offline samson

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Re: Corono...Testing....1 2 3
« Reply #15 on: May 01, 2020, 10:26:23 pm »
It's been YEARS since I was on this forum and this place was the first RE forum I ever joined. It's good to be back! Sadly what prompted my return is this pandemic  :shocked

My parents and I have been putting a lot of time, effort, and money into RE since the 08 recession and we've done very well in both residential and commercial. I'm the only one in the family to take over my dad's businesses (CPA firm + RE firm) so I'm feeling the pressure as they're both very lucrative. A great opportunity for generational wealth.

We're very worried at the moment, however, as one of our largest acquisitions mid way through last year was an LA Fitness. Great location, large chunk of land in a beautiful city, below market rent, part of a larger shopping center, and we got it for a great price with a brand new lease term. Sadly, it's been non-operational since March 15th and they're not paying us rent until they open back up. Our biggest concern is if they file for bankruptcy which would effectively allow them to sever the lease and renegotiate rent at a much lower price point. Gyms will be the last thing to open when it's safe to do so so sadly, I am expecting the worst possible scenario.

We do have ample cash on hand, we have zero debt on all our properties, and all of our other tenants are still paying rent so there is some positive news. We don't own any stocks but it's been really fun watching the absurd market swings. Talk about a game of emotions!

I don't see residential taking too much of a hit this time around. Perhaps in a few cities/states but nothing like 08. My theory is that commercial will take a huge hit. Restaurants, gyms, office...all of these were prize acquisitions before all this happened and they're all effectively dead in the water right now. I'm curious as to what will happen to those massive multi-use properties being built all over the U.S. that are filled with restaurants, retail, office space, movie theater, and apartments.
« Last Edit: May 01, 2020, 10:46:31 pm by samson »

 




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