Long time since I’ve been here I just wanted to share with everyone that I actually have found my first deal.
I have bought and sold property before but never positively geared. I was extremely interested in positive cash-flow but have been concentrating on business for the past 2-3 years.
I was actually just finishing off Steve’s 2nd book ( for the 2nd time…lol) when I stumbled across this deal 10 minutes away from where I live and work !!!!!!!!!!!!!!!.
A 41sqm, free standing shop in a complex of 28 being sold privately (by a small sign in the window). The owner is retiring and wants to sell the shop. Other similar shops in the complex lease for $850 per month and $780 per month. When i inquired about the price she said ” um well about …something around $85,000″. The price was including G.S.T. She said once it sold she would pay rent for 1 month so she could pack all her things and leave. The shop will then not have a tenant , It will be the 2nd only vacant one out of 28 in the complex (I don’t think it will be hard to rent out). I gave my details to her and expressed my interest, we then chatted for about 15 minutes. When i left about 1 hour later I got a call from her husband who left a voice mail message with me wanting to meet up next week, I have not called him back yet.
From here should i propose an offer of something like $70,000 including G.S.T with a 2 month settlement period, then as soon as they accept start advertising for tenants?
Does any1 have any other suggestions for this deal?
Sorry I should of added the shop is about 40 years old and the stata fees are $106 per month
How long has the other shop been vacant?
Im not sure I didn't find out how long it had been vacant for, but I spoke to the store owner across from the one being leased and she told me that they could of leased it 8 times by now but apparantly the real estate never awnsers phones or returns calls.
ANYWAY!!! I went out there this morning (friday) and offered $70,000 with a 3 month settlement and we negotiated to $75,000 with a 10 week settlement. I also added a clause stating prospective tenants could view the property in the settlement period.
I have put an advert in the sunday paper offering it for lease at $750 per month.
I will also put an advert in the Saturday paper next week and perhaps REIWA aswell.
Any advice or comments received would be great !.
I imagine the first thing you need to do is find out about retail leases and what outgoings are usually the responsibility of the tenant ( insurance land tax, rates, water, small maintenance? ) as well as any obligations/restrictions you have as a landlord. Also what is usual as far as yearly rental increases go (CPI or a fixed percentage?) and decide what is the shortest lease you will accept.
All very different to residential so this is the time to go educate yourself if you're new to this area.
One tip I have is if you find a prospective tenant who wants to negotiate a reduced rental and you are willing to drop the price……. do not reduce the rent. Grant a small rent free period instead.
This way your property keeps its value and the decrease does not impact the rent for the following years.
Now that you have bought it can you tell us where it is please?
Great Idea. Yes I now most commerical properties have there rent raised annually at cpi+2 ( I own a boost juice store in shopping center). Thanks for the great idea of offering a rent free period instead of dropping rent AS i would love to get some one to sign a 3 -5 year lease. And you suggest that I take a deposit , the first months rent and then offer a 1 or 2 month free rent period (if they were negotiating)
I will tell you where is it is a month or so as there is a second shop in the complex that is for sale (it is the reason we originally went there) If there is a high demand for tenents for my 1st of I may buy the second one too…. The second one is made of wood and has some rotting wood at back and broken gutters.
Thanks for the great advice… I take it all in
Let us know how you go.
CheersMultoGrandeMember@multograndeJoin Date: 2007Post Count: 11
Love to hear some followup to your story, Jamie. Good luck with it.
OK I have now found a tenent ( a patio company) who are going to lease the store for $750 per month plus outgoings. I still have 6-7 weeks before settlement!!!!!!!!!!.
Is there a standard lease aggreement I can get for a commercial property, or do I have to pay to get one done up. I was hoping that maybe someone here could send me a copy of one of their own commerical leasing agreements (minus personal details)
WHERE IS STEVE ??? Steve what do you think of this?
Any advice or comments from any1 at all is greatly appreciated.
ThanksRVPMember@rvpJoin Date: 2006Post Count: 47
Sounds like you have found a good investment there!
Good luck mate!
is there a standard lease aggreement I can get for a commercial property, or do I have to pay to get one done up. I was hoping that maybe someone here could send me a copy of one of their own commerical leasing agreements (minus personal details).
Steve are you ever browsing these forums or are u spending more time trying to sell tickets to other peoples seminars?raddlesMember@raddlesJoin Date: 2006Post Count: 187
whilst you can obtain a commercial lease agreement from a real estate agent – I believe you would need to comply with the retail shops legislation – and as each state has their own legislation – it would be best to touch base with a solicitor and see if they can draw up one for you.
It would be a tax deduction – and it is better to get the commercial lease right in the situation you are in.
Great news. You're nearly ready to open the champaign bottle.
Totally agree with raddles re lease.