Commercial property in Wagga Wagga- SWOT

[geoffw]

The property has been painted since the google street view. There's a little bit of graffiti which will not have much of an impact nor much cost to remove.

Fungible? A new word on me.

Wagga is a nice town with a lot going for it. But this part of Kooringal is not the nicest part.

 

[crest133]

Location might suit legal aid, tattoo shop, hairdresser, nail salon, chicken or pizza shop, one of the many govt agencies we fund.
good luck
cheers
crest133

 

[hobo]

Wondering how this progressed for you, Geoff - did you get tenants in reasonably quickly? How has it been going since the last update?

 

[geoffw]

No update. No rent. I'm consulting with my lawyer.

There's a bit of interest for a government agency to buy it, but that might take a while.

 

[starter]

Sorry to hear Geoff, hope it works out.

Good reminder here for all of us to use the appropriate advisor. A BA which specialises in mainly residential properties based around yield properly isn't the most suited to source a CIP which brings with it a totally different set of criteria and issues to be considered.

 

[hobo]

Thanks for the update, Geoff, and sorry to hear it hasn't worked out quite as you'd hoped.

Best of luck moving forward.

 

[geoffw]

Sorry to hear Geoff, hope it works out.

Good reminder here for all of us to use the appropriate advisor. A BA which specialises in mainly residential properties based around yield properly isn't the most suited to source a CIP which brings with it a totally different set of criteria and issues to be considered.

I lay no blame on the BA. The decision to buy was mine. I based the decision on a solid lease- which is still enforceable. The matter is with my lawyer.

 

[starter]

I lay no blame on the BA. The decision to buy was mine. I based the decision on a solid lease- which is still enforceable. The matter is with my lawyer.

Not saying it was their fault at all and at the end of the day it's definitely your decision. My point was that a more experienced investor who specialises in CIP would have advised you to look at many more factors which may not be as apparent for those not as experienced in the area.

 

[geoffw]

Starter- you seem quite determined to blame the BA. It's not the BA's fault that the tenant decided to pack up. And it's not the BA's responsibility to hold my hand. The fault is entirely mine.

If anything, I was a bit dazzled by those who had done well in CPs- however I wanted to put my toes in the water on a small scale first.

I've got a friend who had a similar situation so I knew the risks.

Accountant and financial advisor were happy with the purchase- at least when it was going well.

 

[jrc]

Keep persevering Geoff. These vacancy periods whilst annoying are why the returns should end up being much better. I had a commercial property several years ago which grossed around 14% on my cost. I did have a period of 18 months where first one side and then the other went vacant. However, after a oaint job I was able to retenant, i then sold to go into another investment. Word of mouth helps in country areas. Maybe a letterbox drop in the commercial/industrial areas might find you a tenant

 

[TMNT]

Starter- you seem quite determined to blame the BA. It's not the BA's fault that the tenant decided to pack up. And it's not the BA's responsibility to hold my hand. The fault is entirely mine.

If anything, I was a bit dazzled by those who had done well in CPs- however I wanted to put my toes in the water on a small scale first.

I've got a friend who had a similar situation so I knew the risks.

Accountant and financial advisor were happy with the purchase- at least when it was going well.

Thats a very respectful and noble outlook, kudos to you

Too many people these days take absolutely no responsibility for their actions. No different to those that blame McDonalds for being obese and try to sue

 

[knightm]

Thats a very respectful and noble outlook, kudos to you

Too many people these days take absolutely no responsibility for their actions. No different to those that blame McDonalds for being obese and try to sue

Absolutely right. Geoffw will resolve this because the buck stops with him. Respect Geoff. Best of luck getting through the mud and into a solution.

 

[geoffw]

It is a very rough area.

I have posted on this property specifically because I bought it. I knew what the area was like- but the business seemed to be running quite well when I was there, and the yields appeared very good. And it was within my budget.

I would not have bought a resi in that area, but I thought that it was a solid enough proposition as a comm.

It hasn't turned out that well.

The business wasn't what it had appeared and the owner has closed shop. She knows she owes money for rent and is paying in dribs and drabs, but is getting a long way behind. If the debt gets too big there is a guarantor on the lease, but I'd prefer not to go there.

There's a few vague possibilities but nothing much.

She would love for me to lock her out but it's not worth my while to do so.

It's been a long path but this appears to have been resolved, at least for now.

The tenant ordered her own property inspection, and we were informed by her lawyers that the property was unsuitable for a food business, therefore the lease was void. This was a surprise to us, as we had our own inspection done when we bought the property.

A number of the issues were her fault, but we spent a bit over $10k to get the issues which were ours fixed up. I don't think she expected this, however, by this stage she owed well over double this in back rent.

She now has found a sub tenant, who has been paying rent for the last three months now.

She has entered into an agreement to pay back rent at a set amount each week. The lease specifies 1% per month penalty for late payment, this is being applied.

She has been paying this for the last three months.

So current rent is being paid, and progress is being made on back rent.

It's been a long and difficult process, but we got there.

 

[hobo]

Good to hear, geoffw - the fact that you are receiving the arrears as well as the current rent is excellent. Can I ask how long will it take her clear the arrears, assuming she continues to make every payment?

Fingers crossed the sub-tenant's business goes well and they want to sign a direct lease once this one has run its course....

 

[geoffw]

It could take up to three years to pay the arrears. But I'm just glad that something is coming back after everything that's happened.

 

[Corey Batt]

Great to hear you've had progress with their Geoff - even if it's a slow clawback, much better than a hole where the expenses keep growing.

 

[hobo]

Yes exactly, Corey - much better than nothing!

 

[geoffw]

Besides, interest is accruing on the arrears at 12%.