Hello everybody and I hope you’re having a great week!
—This is my first post on here—
I’m 35 years old with on and off experience in real estate mostly as a broker. I’ve rented apartments and I did some sales but nothing major under my belt. I know the business but mostly in theory as I have friends who did deals, flips, buy and hold etc. Also, I’m constantly reading about real estate and I’m always looking for deals. In addition I’ve read Unscripted and loved it.
To get to the point, I’m trying to buy my first property (or at least my first involvement in a property since I’m not in possession of this kinda money)
It’s a commercial property. A Rite Aid pharmacy. They recently signed a 5 year lease and have 4 five year options (total 20). It’s backed by a corporate guarantee and the numbers are good ($5.2mm annual revenue for this store). It’s a fee simple deal and I’m trying to get it for cap 10 and sell it for cap 7 or just refinance and hold. All in all it looks like a solid deal and it’s still available only because 2 buyers fell through due to a lengthy 1031 transaction.
I did some research on the financial health of Rite Aid and they seem to be in good shape but they also show a few weaknesses.
-Walgreens bought a huge chunk of their stores and closed 600 of them.
-Their net income is negative.
-There’s a stiff competition in that market and Amazon, Walmart and other online retailers are a constant lurking threat.
Can anyone with experience in commercial real estate help me assess this deal further?
I want to buy it all cash and refinance in three months or so.
-Can I get refinance at cap 7?
-Will I be able to get it refinanced in three months?
-Do you recognize any risks in such deal?
What questions would you ask before entering a multimillion commercial property deal?
In addition I’d appreciate any help or input!
Thank you!
Moe
—This is my first post on here—
I’m 35 years old with on and off experience in real estate mostly as a broker. I’ve rented apartments and I did some sales but nothing major under my belt. I know the business but mostly in theory as I have friends who did deals, flips, buy and hold etc. Also, I’m constantly reading about real estate and I’m always looking for deals. In addition I’ve read Unscripted and loved it.
To get to the point, I’m trying to buy my first property (or at least my first involvement in a property since I’m not in possession of this kinda money)
It’s a commercial property. A Rite Aid pharmacy. They recently signed a 5 year lease and have 4 five year options (total 20). It’s backed by a corporate guarantee and the numbers are good ($5.2mm annual revenue for this store). It’s a fee simple deal and I’m trying to get it for cap 10 and sell it for cap 7 or just refinance and hold. All in all it looks like a solid deal and it’s still available only because 2 buyers fell through due to a lengthy 1031 transaction.
I did some research on the financial health of Rite Aid and they seem to be in good shape but they also show a few weaknesses.
-Walgreens bought a huge chunk of their stores and closed 600 of them.
-Their net income is negative.
-There’s a stiff competition in that market and Amazon, Walmart and other online retailers are a constant lurking threat.
Can anyone with experience in commercial real estate help me assess this deal further?
I want to buy it all cash and refinance in three months or so.
-Can I get refinance at cap 7?
-Will I be able to get it refinanced in three months?
-Do you recognize any risks in such deal?
What questions would you ask before entering a multimillion commercial property deal?
In addition I’d appreciate any help or input!
Thank you!
Moe
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