Damn you Dazz

lizzie

lizzie

Every so often you say something in a thread that gives me a mental kick up the backside ... so it gets me looking at commercial again. :rolleyes:

Currently looking at two side by side, near new 149m2 concrete pad "sheds" with both retail and industry potential. In a bustling commercial "homebuyers" zone. Both have double height roller doors and glass "shopfront" area. Both leased on 3 year lease (don't know thereafter yet) and both have allocated parking.

Guide figures are - buy $500,000 (lowish offer as buy both and been for sale for a while) ... gross income (will investigate net tomorrow) $48,000 .

Would be great potential depreciation as well as potential 8% net income.

Would be looking at 75% LVR (but could go to 70%)
 
Sorry Lizzie

while it may be possible to get even 75 depending on the quality of the tennant and the lease, most New to bank commercial lenders dont like Lvrs beyond 65 on an IO basis.

There are others that will go beyind 65, BUT you will usually pay a higher rate

ta
rolf
 
I know - higher risks, but potentially higher rewards.

Junior is home sick today so I'll just be cruising the web instead of pounding the pavements.

Never know - might blow the lot in BHP shares at $20/ea this week :D
 
There's a reason why you keep coming back to it (comm) Lizzie.... I think your sig might also have something to do with your thought process...:D

You'll never know what the waters like til you dip a toe in...?

cheers

B.D
 
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Commercial property is a tough game unless you have a lot of capital to back you up. I have a friend who bought a comm property for 'cashflow' - ended up losing one of his 3 tenants within a month.
 
Hi Lizzie,


Just back from a trip to the countryside and saw this...probably relating to our vacant block deal.


I think it's called "stop making sense"....probably a better analogy than a mental kick up the bum.


Fling me a PM Lizzie with your selection criteria and I'll have a scout around for you....we've got to get you out of those ressy overalls covered in dust into something more respectable.


I think a "do-nothing-pay nothing-don't bother-me" commercial office with a solid Tenant on a long Lease might be more to your liking. One never knows what is out there until you start scratching around.


P.S. Rolf - stop being such a killjoy. No practical restriction to be applied on the initial sift thru....it takes all the fun out of it.
 
Sigh - even my bloodhound says I need more cash ... I'm working on it guys! Just don't feel comfortable taking the LVR on the PPOR higher than 60% atm.
 
Dazz said:
I think a "do-nothing-pay nothing-don't bother-me" commercial office with a solid Tenant on a long Lease might be more to your liking.
Click to expand...

I like the sound of this also, together with the high yield that can come with it. Trouble is, I'm a little scared of being left without a tenant, and then it standing vacant for a long period of time.
 
skater said:
I like the sound of this also, together with the high yield that can come with it. Trouble is, I'm a little scared of being left without a tenant, and then it standing vacant for a long period of time.
Click to expand...

So do some literal research & literally run some numbers to get a clearer picture of risk vs. Reward like we tell inexperienced newbies so that it’s not so daunting because you are unfamiliar with it.....

If you have already done this & made up your mind, then ther is nothing left to consider (?)
 
Rude question but if I don't ask I don't know

lizzie said:
Sigh - even my bloodhound says I need more cash ... I'm working on it guys! Just don't feel comfortable taking the LVR on the PPOR higher than 60% atm.
Click to expand...


Lizzie
What cash amount did Dazz suggest is needed to start in commercial?


Cheers
Sheryn
 
Jaycee, I'm well versed in risk v's reward thankyou.

Good commercial requires deeper pockets than I have access to right at this given time. While I like the idea of it, the reality is quite different. The kind of commercial that I could finance is probably a heck of a lot more risky than any of the stuff in Dazz's stable and would certainly be too small for a large multinational to be interested in, therefore at risk of sitting vacant.

Not to worry though, I can still add to my stable of basic homes at very good yeilds. They might have more maintenance calls than Commercial, but so long as you don't overcapitalise and pander to all the wants of the tenants, preferring to only service their needs, alls good.
 
skater said:
Jaycee, I'm well versed in risk v's reward thankyou.

Good commercial requires deeper pockets than I have access to right at this given time. While I like the idea of it, the reality is quite different. The kind of commercial that I could finance is probably a heck of a lot more risky than any of the stuff in Dazz's stable and would certainly be too small for a large multinational to be interested in, therefore at risk of sitting vacant.

Not to worry though, I can still add to my stable of basic homes at very good yeilds. They might have more maintenance calls than Commercial, but so long as you don't overcapitalise and pander to all the wants of the tenants, preferring to only service their needs, alls good.
Click to expand...

Sorry Skater

I wasn't implying anyting about you not being succesful or happy or whatever else I was referring to the sentence only

I was remebering Dazz has susggested before that it's perception that people thikn they knwo the risks, but reality was different

I thought, perhaps, it's mighyt not be as risky as you thought, I read your post as having a bit of a question int it as well as it being a sentence......

but now you have expaliened that you clearly already know literally how risky it is, I take back everything I said and will go have a good long hard look at myself...

thanks
 
Sheryn said:
Lizzie
What cash amount did Dazz suggest is needed to start in commercial?


Cheers
Sheryn
Click to expand...

around $200,000 deposit.

As for upping the LVR on the PPOR ... well ... I guess it depends on how much your ppor is worth and where the funds are going to come from to pay the interest payments ... :eek:

My PPOR is worth rather a lot more than the average house. We are planning a major reno to drag it out of the 80's, after which we will sell and downsize and (hopefully) be PPOR mortgage free. Be a bit more cashed up them
 
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