Analysis Of Commercial Foreclosure
Hello all,
I have been purchasing SFR's at auction for a couple of years now, with good success. During one of my searches, I came across a commercial foreclosure, that (at first glance) appears that it might be worth buying. It consists of two modest size (1000 sf) retail outlets (both currently oppupied by a fabric store), a fairly small office (500sf, currently occupied by an insurance office) and an attached apartment (900 sf). Single level, built in the 1970's. The two retail stores face the main thouroughfare thru town, and are more or less in the center of town. The building appears to be in decent shape, with a modest amount of defferred maintenance. Auction price to be around $180,000. I intend to try to scope out what leases/terms all of the tenents have, but what else should I consider? Shoot for a "cap rate" of 10? "cap rate" is annual NOI/cost, right?
Any help is appreciated.
Thanks
:-o
A .10 cap is a good thing. A .12 cap is even better. Given that you are buying at auction with several unknows i'd probably want better than a 10 cap.
What I have been trying to do have late, if to buy the note at a discount to try and juice up the deal.
Esp. if I know the borrower is NOT going to come current.