Developoing the strip mall

[crusadercommercial]

Hi Investor123.

It looks like a decent deal on the face value.

You need to establish NOI and DSCR to determine an acceptable profit margin.

You need to get a rent roll for the past year and also a P&L.
I would ask to see the audited P&L.
You can also request a copy of their last years taxes or have them sign a 4506t IRS form which allows you to order a copy of the taxes if they don't have them handy.

As for part 2...

The building is no longer 100 years old. It is 25 years old if it was rebuilt from the ground up.

Check with your county and twon regulations to make sure there have been no ordinances regarding mandatory parking availablity, but with lot across the street I imagine that suffices.

You should have no problem with 30 year amort. We do them all the time. You would be best off with a neg am or interest only loan, which would increase your profit margin for at least the first 5 to 7 years.
We do 100% apartment building loans for 20 or more units with FICO above 700. and in under 20 we do a 2 stage combo loan to accomplish 100%.

The goal, of course, is to have the lowest down, the lowest monthly payment and the lowest maintenance while realizing a great profit.

Unfortunately, you can't always have all of those, but we try to get as close as possible to that.

If you do not have down payment, and you own a home with some equity in it, you might also be able to cross collateralize the home in lieu of the down payment.

Whew, fingers tired lol.

Jeff

[Desperado]

investor123,
I am just wondering if the reason you are buying strip mall is because of the ROI which is higher than owning rental units?

[investor123]

Desperado,

I have rental office units. I wanted to look into the strip mall as they are not more difficult to manage than office units. Basically wanted to broaden my horizon not neccessarily for the rate of return. Actually I have not found a rental unit with good positive cash flow for a while as prices have gone up a lot.

[crusadercommercial]

Strip malls, historically have a higher occupancy rate than office units.
They pay a higher $ per sq ft. and require less $$ expended in maintenance.
More responsibility is borne by the tenant than in an office rental unit. Utility charges are generally lower as there is less common area to light, heat and cool.

Jeff