CIP... Industrial

So to find a great deal may mean buying vacant with lots of work needed etc?

 

Still not sold, but still collecting rent, so okay for now.

 

Thx
Do you know how financing works for commercial??

 

To some extent banks (brokers) - deals are more complex and conditions more onerous than resi eg. applicant pays for the Valuation, bank's legals, annual reviews (pretty common).

Private lenders/syndicates can also be an alternative.

 

Its on a month to month lease, makes me nervous

 

It's to get around having to fork out the GST

 

Anyone have any thoughts on this

Shop 104 & 110, 3 Railway Parade, Burwood, NSW 2134 - Medical & Consulting Property For Sale - realcommercial

6% net (tenant seem to be paying outgoings) in syd with active lease?

seems a lot of gym commercials up for sale recently... Hmm

 

Who is providing the security - the franchisor (possibly) or the franchisee (not worth the paper it's written on)?

 

Is it just for yield?
If you don't mind a passive approach, have you considered something like this:
Charter Hall Direct Industrial Fund No4

I think you will struggle to match the quality of assets and tenants for $2-3m.

Probably wont get strong value add opportunities though.

 

I will attract a lot of hate but I would argue there is almost no money In resi propetty nowadays.
Once you have an asset base above $5M, you have no place being involved in Resi other than a nice PPR. Even development, it is much easier to lend to a builder @ 10-12%p.a on a secured 1st mortgage initially - you see the pitfalls of development without taking equity risk... only once you have lent on multiple projects, should you jump into doing your own developments imho.

well done MTR-focus on stuff that you can increase the rents over time, reset leases, do capex in return for a longer WALE... Just like buying undervalued businesses... there is a reason most private equity firms are deep in commercial REITS... you can buy at huge discounts on a short WALE asset, borrow cheaply and double or triple your equity over time. And it always puts money in your pocket from day 1

The main advice I can offer is always factor in the incentives you need to offer tenants in this market for retail/office. That is a significant cost which needs to be factored into your purchase price.

In the last year, we have put prob only $2M of hard cash into 3 CIPs and the equity is north of $5M if we revalue them today. You can’t achieve that sort of growth in resi.

 

Well done
Looking at a couple of avenues atm which I think going to work out well

I am pretty much over resi holds.

Developing is good if the numbers stack up,
I start a small development Very soon

Problem atm is financing deals, having to use cash for my projects

Lots of talk that we will see lending restrictions easing???? Lets see

 

pm me if you like to chat.
I am a developer and nowadays I prefer lending/commercial.

developing used to be good before the banks became so difficult! Now the presale requirements and the lending environment mean you are blocking up huge chunks of equity or paying 2nd tier/private lenders... hence my comment you may as well make 10% as a lender rather than 15-20% as a developer.