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URL:  https://boards.fool.com/commercial-real-estate-34894764.aspx

Subject:  Commercial real estate Date:  8/6/2021  1:50 PM
Author:  amgentech Number:  86765 of 86821

I hope I am not too far off topic but the real-estate investing board seems dead.

I have no experience in comm real estate , in this case a professional office building. I'll explain the offer .If anyone sees areas of concern, questions to bring to the lawyer please speak up.

My SD rents a piece of the building and runs her hair salon of of it. The current owner wants out of the property management business. This is her last property to sell.

The deal offered to SD is a land contract at 2% interest ,30 year term. It also includes an additional payment that starts at 2000 a month and reduces to 1000 ending in 12 years. The contract makes the additional payment optional. The owner cannot take back the building if it is not paid.

The owner does not require a down payment as long as we (I) maintain approx 10% of the purchase price in an account that SD could access if needed. The owner doesn't care how it is invested as long as the balance stays above the minimum. We are still talking about that number.

The asking price is what the city estimated to be fair market value on the 2020 taxes.

The owner has supplied 5 years of her books. The numbers look complete and would result in positive cash flow with a cushion if 1-2 smaller tenants leave. Most tenants have been there for 10 or more years. Does this seem like a typical deal?

I might mention that the SD has been the defacto property manager for few years now. The other tenants are used to coming to her if there is a problem and she knows how get things taken care of.
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