Posted by John Corey on April 26, 2006 at 18:01:28:
Rob,
Go over to the commercial forum as there are more commerical investors there.
Consider ordering Ray Alcorn’s Dealmaker’s Guide as that will give just about everything you would ever need to evaluate a commercial deal. I would consider overnighting the package if you really need the guide to to work on this deal.
The property type is going to be a problem when it comes to financing. The price is low, the type is mixed and maybe not conforming or otherwise outside most lender’s guidelines. The reason the seller is offering financing is because the seller knows they have to if they want to move it. You will have to do the same. You may never be able to refinance or otherwise tap into the equity. The cash flow might be great.
If you buy this expect to own it for a long time as there will be few buyers for it unless lenders are interested.
I have some other ideas but you can email me for them as they are a bit weird. Not the sort of things that most people should consider.
I’m looking at a commercial building with 10 efficiencies and 3 store fronts. Property was built in the 1920’s and has been vacant for about a year. I’ve only walked through once, but at a glance some of the plumbing needs to be updated, needs a new rubber roof, several radiators need to be replaced or repaired. The structure is sound and needs mostly paint to spruce up the units. There is one boiler to heat the whole place.
I’ve worked on historic properties before and own a historic 4-unit. However, I have never taken on a commercial property. I’m not sure of everything to look for when evaluating this deal. The asking price is $79,900 with the owner carrying a mortgage. However, he will reduce the price if I purchase out right. The efficiencies could rent for $300/mo, I’m not sure about the store fronts. Any suggestions would be appreciated. Also, any suggestions on financing options (hard money, small banks etc.) would also be appreciated.