Offer Price ? Need Some Insight
Ok, now I can spot a negative cashflow situation without a calculator…LOL.
7 apts, 1 grocery store, big corner building in urban NY neighborhood.
Note: The owner operates the grocery store so at closing (in theory), there would be no tenant. I have no intentions of operating a grocery store.
ASKING: $650k (no can do)
INCOME: 64,140 (less grocery store $1200 rent = 49,600)
The apt rents are below market w/2 yr leases, need to confirm if they are rent stabilized or truly below "market" because the owner's expenses are minimal so she just doesn't charge much. Still an opportunity to upgrade to sec 8 renters.
EXPENSES: 28,464
NOI: 35,676 (less grocery store $1200 rent = 21,136)
My questions are:
1. What dox/info should I ask for regarding the grocery store?
2. I was thinking of selling all the store's equipment & inventory to convert the commercial space into something the neighborhood needs. Would you sell the store separately after closing?
3. What range should I be in (offer price)? Thanks in advance for your insight.
I'd probably offer around $300,000.
That assumes that the old grocery store rent was reasonable and that the space is re-rentable without too much hassle.
I wouldn't count on getting too much for a bunch of used store fixtures. There is a glut on the market of such things.
I assume you mean by "sell the store" finding another grocery store tenant and getting some up-front cash for the existing fixtures/inventory. This is probably your best bet.
That's what I was thinking. Thanks CommercialKing. I was starting to wonder where you were
Sorry, the DSL was down for a couple of weeks and I am still digging out. (god, I hate SBC).