48500 sq ft commercial building with @ 15K of office space… Germany Co owns it… and are willing to finance it to me for 5.5% Interest. However it is vacant… I have spoken to several realtors who say its worth it… they will sell it for 2 million . I would like to be able to lease it out for like 5.50-5.75 sq ft. How should i handle this one… ? I dont want to be stuck with an aligator… Its a growing area , we bought a commercial warehouse zoned mfg. @ 8.5 miles down the hwy from it last year for 800,000 and have already gotten offers for 1.3 million 12 mo later and would like 1.5 million or to actually lease for 5.50 - 7 dollars per sq ft… New England - TOP NEWS !!
RI tops appreciation for the nation at 17% USA average is 13 %
Howdy Mohegan:
Is there anyway to breakup the building into smaller units. I am going to do this with the 30,000 foot building I am buying for $165K in Corpus Christi. Just a little cheaper than yours. I should be able to break even including all the repairs $200K at 50% occupancy.
Another idea is to find a tenant before you close the deal. At almost $10K per month on a vacant building would eat up a lot of money fast. If there is no way to lease before hand I would figure a year perhaps to rent. You should have $120K in reserve and maybe even more say $150K in case it takes longer to rent. If it will rent for $5 plus per month you would have a sweet deal even if it is not NNN. I hope it works out, Best of luck
I agree with ted, look like a good deal. you could reduce your vacancy risk is your purchase contract can be extended if necessary, giving you time to market for tenants before you buy. I would put a provision in the contract stating you can have access to show potential tenants the property, etc…
I bought a 90K distribution warehouse last year for 1.25 a foot, but the local market was soft and I figured I would need 18 months to find a good tenant, so I put it under contract for 90 days with a 90 day extention. the 4th month, I found a lease/option tenant and closed on the property. However, this doesnt always work if a broker is representing the seller.
good luck!
Lance
What kind of contract ideas can i implement which will give me the time and/or control option to leverage this situation… Thanks for your responses everyone…