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Commercial Real Estate Questions
I may find myself in a 1031 exchange situation where I have to purchase a piece of real estate. I am trying to get a sense of the trades between multifamily and single tenant commercial. My BIL and a good friend have been successful in real estate so I have some clue. My experience has been limited to owning a portion of a commercial property which is held as single tenant ground lease.
Because of the location we are currently in the process of negotiating a LOI where the purchaser is willing to buy our property for about a 4% cap rate which increases to 5% over the next 8 years. My first question is what is a reasonable cap rate to be able to achieve for a NNN replacement property with a solid no worry tenant in a good location for a 10+ year lease. Secondly what percent of property cost should I allow for property maintenance on a net lease? Lastly how much premium in cap rate should on seek for owning a multifamily over a triple net lease situation? Thanks in advance.
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MBlovr '59 180 Dad's original '59 180 Dad's 2nd one '67 250SE Dad's last one '59 220 SE My first one '62 220SE Coupe second one '89 190E 2.6 5spd third one '06 E350 4matic (sold) '10 E350 4matic |
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