Advice needed for potential commercial property investment
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[{"id": "ekt5tsq", "text": "I\u2019d definitely seek representation from an a gent. Since you already occupy the space the purchase should go smoothly. \n\nAlso remember when you use an agent to represent you on a buy you don\u2019t come out of pocket to pay them. I highly advise you use a professional.", "replies": [{"id": "ekt74lj", "text": "If the landlord isn't willing to pay a commission as it seems here, then who pays the agent?", "replies": [{"id": "ekt84u1", "text": "I didn't say he wasn't willing. I'm not sure on this. I assume he'd have to pay the agent. I just was hoping to negotiate a lower price by saving him from paying agent fees.", "replies": [{"id": "ekt9mtu", "text": "A seller does not have to pay an agent at all unless he's listing with a sellers agent. Now in residential it's normal to sell with the seller paying both buyer's and seller's agents. In CRE, things can be different. Many times the buyer pays for their agent and vice versa. If you guys already know each other and are able to directly talk, I don't expect him to pay for the agent's at all.", "replies": [{"id": "ekt9q5c", "text": "At 7.5 cap and 600k a seller is looking at 15k to 30k of broker fees. I would not expect a seller to agree to that at all", "replies": [{"id": "ekun4fw", "text": "Ok I checked, you\u2019re right he won\u2019t pay commission. He is asking $692k though not $600 with 6.6-7% cap per him. It\u2019s not on the market atm but he plans on listing for $692k next week. Seems like if it goes to market he\u2019ll have to pay commission at that point...", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "ekt8hgr", "text": "What part of the country are you in?  I\u2019m a retail broker in Chicago.  With 7 years left on your term a big factor is the level of credit your company possesses and how long you have been in business.   Do you have an termination rights or are you locked in for 7 more years?  Are you located in a strip center or 1st floor of a residential building?  \n\nI would price this closer to 7.5% Cap ~$600k as an investment purchase.  If you had less term on your lease you would be able to get a better discount.", "replies": [{"id": "ektjugk", "text": "Sent you a PM.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ektfagb", "text": "If he\u2019s not willing to pay a commission then that\u2019s a red flag. Don\u2019t buy it.", "replies": [], "depth": 1}, {"id": "eku5gp7", "text": "Pass on it. Best bet is to buy your own property with your own land and be done with it. Not worth all the risk associated with a condo where you don\u2019t control the other units and the uses that you may eventually have to share your space with.", "replies": [], "depth": 1}, {"id": "eku6qwx", "text": "If the cap rate is \u201ctoo high,\u201d then the property would be worth more.", "replies": [{"id": "ekuqni1", "text": "I think I misspoke. I\u2019m not sure if it\u2019s too low or ok. How do I find out the going cap rate?", "replies": [{"id": "ekv7elw", "text": "You have to know the financial info from sales.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]