I`m a rookie commercial investor with an opportunity (for me and possibly for you). Would you do this deal?
These are top line numbers and more details are available to analyze more thoroughly.
The Property
- 15,000 sq ft of industrial space located in a desirable Okanagan, BC location on a little under 2 acres.
- Purchase Price of $3,000,000
- Estimated appraised values by replacement cost = $4,000,000 by income approach = $3,500,000
- Vendor will take back $500,000 second mortgage
- Vendor will defer repayment of $500K 2nd mortg until end of year 5, with interest calculated at 8% simple annual interest for 5yrs. In consideration, Purchaser will grant Vendor a 5yr Option to Purchase property back from Purchaser for a price that results in Purchaser netting a 200% ROI ie, approx $4,000,000
The Tenant
- New tenant taking over at closing in Mar 09, committed to $500,000 of leasehold improvements
- New tenant is prepaying 1st year of lease $240,000
- New tenant will show net worth of $1,000,000 or more to guarantee annual lease pyts
- New tenant signing 5yr lease agreement at $240,000/yr
The Investor
- Investor (Purchaser) total cash required $600,000
- Purchaser obtains new 1st mortgage at 65% LTV based on strength of tenant to make lease pyts
- Investors actual cash position (profit) at end of yr5 is $1,200,000 (from sale of equity & mortgage pay-down)
- Investors actual 5yr ROI is 200%
If you are interested in this deal, contact me at [email protected] or (250)558-9046
Your feedback and interest is much appreciated.
Mike Chirkoff
These are top line numbers and more details are available to analyze more thoroughly.
The Property
- 15,000 sq ft of industrial space located in a desirable Okanagan, BC location on a little under 2 acres.
- Purchase Price of $3,000,000
- Estimated appraised values by replacement cost = $4,000,000 by income approach = $3,500,000
- Vendor will take back $500,000 second mortgage
- Vendor will defer repayment of $500K 2nd mortg until end of year 5, with interest calculated at 8% simple annual interest for 5yrs. In consideration, Purchaser will grant Vendor a 5yr Option to Purchase property back from Purchaser for a price that results in Purchaser netting a 200% ROI ie, approx $4,000,000
The Tenant
- New tenant taking over at closing in Mar 09, committed to $500,000 of leasehold improvements
- New tenant is prepaying 1st year of lease $240,000
- New tenant will show net worth of $1,000,000 or more to guarantee annual lease pyts
- New tenant signing 5yr lease agreement at $240,000/yr
The Investor
- Investor (Purchaser) total cash required $600,000
- Purchaser obtains new 1st mortgage at 65% LTV based on strength of tenant to make lease pyts
- Investors actual cash position (profit) at end of yr5 is $1,200,000 (from sale of equity & mortgage pay-down)
- Investors actual 5yr ROI is 200%
If you are interested in this deal, contact me at [email protected] or (250)558-9046
Your feedback and interest is much appreciated.
Mike Chirkoff