http://www.netgainrealestate.com/where-does-one-find-commercial-property-with-a-20-percent-return Commercial real estate investing and income property analysis Fri, 10 Sep 2010 10:31:15 +0000 http://wordpress.org/?v=2.5 http://www.netgainrealestate.com/where-does-one-find-commercial-property-with-a-20-percent-return#comment-230 NetGain Fri, 24 Oct 2008 23:38:52 +0000 http://www.netgainrealestate.com/?p=639#comment-230 The two-to-five year holding period is optimistic. A four-to-seven year holding period is more realistic. Given the limited information, assessing your 20% cash-on-cash return is impossible. However, the answers to the following questions would provide a qualified response. <ol> <li>Have you allowed for any vacancy during the holding period?</li> <li>Have you considered the cost of lessee marketing?</li> <li>Does the immediate and future employment base support your rental projections?</li> <li>Have you factored in increased operating expenses?</li> <li>What about maintenance and repairs?</li> <li>Have you considered management costs (including your own time)?</li> <li>Have you assessed capital improvement costs (not an expense, but still money) during the holding period?</li> <li>Will your mortgage have any uneconomical costs, triggers or restraints?</li> </ol> The two-to-five year holding period is optimistic. A four-to-seven year holding period is more realistic. Given the limited information, assessing your 20% cash-on-cash return is impossible. However, the answers to the following questions would provide a qualified response.

1. Have you allowed for any vacancy during the holding period?
2. Have you considered the cost of lessee marketing?
3. Does the immediate and future employment base support your rental projections?
4. Have you factored in increased operating expenses?
5. What about maintenance and repairs?
6. Have you considered management costs (including your own time)?
7. Have you assessed capital improvement costs (not an expense, but still money) during the holding period?
8. Will your mortgage have any uneconomical costs, triggers or restraints?

]]> http://www.netgainrealestate.com/where-does-one-find-commercial-property-with-a-20-percent-return#comment-229 GEJ Fri, 24 Oct 2008 05:55:54 +0000 http://www.netgainrealestate.com/?p=639#comment-229 Generating a 20% cash-on-cash return 1416 E. 9th St.Reno, NV 89512 A 3 Bedrooms 2.5 Full Bathrooms 1472 Square Feet Year Built: 1985 MLS# 80006468 my cost 70,000 vs the 125000 home cost this is a short sale if I rent the home for 2 - 5 years can i make a good resale gain Generating a 20% cash-on-cash return
1416 E. 9th St.Reno, NV 89512
A 3 Bedrooms 2.5 Full Bathrooms 1472 Square Feet Year Built: 1985 MLS# 80006468
my cost 70,000 vs the 125000 home cost this is a short sale if I rent the home for 2 - 5 years can i make a good resale gain

]]> http://www.netgainrealestate.com/where-does-one-find-commercial-property-with-a-20-percent-return#comment-215 Christopher B. Kubler, CCIM Sun, 28 Sep 2008 00:03:52 +0000 http://www.netgainrealestate.com/?p=639#comment-215 Yes, I'd agree that to find an in-place 20% cash on cash return is going to be a challenge. The buyer will need to "create value" by bringing a tenant in tow, increasing rents that may be below market, or otherwise leasing up vacant space. A 20%+ internal rate of return (return over time) is certainly a realistic and attainable goal for a savvy investor. Yes, I’d agree that to find an in-place 20% cash on cash return is going to be a challenge. The buyer will need to “create value” by bringing a tenant in tow, increasing rents that may be below market, or otherwise leasing up vacant space. A 20%+ internal rate of return (return over time) is certainly a realistic and attainable goal for a savvy investor.

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