The Math for a Commercial Building

[@deathstroke5086]

Nice explanation, thanks a lot

[@levelledup3069]

Great Content! Thank you for sharing your formula. ❤️🇵🇭

[@jacobolmos2475]

How do you fund the purchase of a commercial building?

[@CherifMedawar]

you can start by wholesaling commercial properties with no downside risk for you and you can use my proof of funds and assign to me directly for all cash purchases. Your assignment fees will help you acquire your first deal. Look at how many success stories we have online Reach us at: [e-mail]

[@johnortiz9789]

You bring a lender a deal. That means that the use of the loan money will generate enough returns to pay for the loan + good cash flow (this is where you make money) + capital generation (here too but only liquid when you sell). This needs to consider things like, vacancy rate (for rentals usually between 2-8%) operating cost (for small properties like duplex can be 30%, for commercial might be lower), closing costs (5-10% of property value), etc.

[@cliffordreynolds7407]

Where do you get a commercial loan fixed for 30 years?

[@CherifMedawar]

Yes very good point. It is usually 25 years,. This is a clip from a longer presentation where I explained that we used the upstairs as my residence and downstairs one of the stores as a business that I own. The bank (Western bank at the time), asked me not to go to get an SBA loan and do it through them with less paperwork. And they extended a 30 year loan. You can still do that on mixed use properties like this one. This was quite a few years back and the interest at that time was around 6%. Then it went down for a good decade to 4 and 3 etc and now it is back up. The formula is the same though. Even if interest is at 8% you just get a higher rent and the loans at 25 years due in 5 so you adjust the loans and your tenants keep paying down the debt. Look at the portfolio I acquired of approximately $100,000,000 with my formulas www.CREPR.com

[@GD15555]

talks about math but writes 35000

[@CherifMedawar]

Not $35K but $3.5K haha - look at the video again (the lease would be $3K to $3.5K)

[@mujahidshah1910]

Didn't get

[@CherifMedawar]

You want the building income to cover the bank payments as if you will acquire it with a 100% loan (so when you put a down payment you get some cash on your cash downpayment) I have many other videos that break down calculations and you can view them to get better at these concepts.

[@fiecapglo8678]

Let's hope they pay rent

[@yokaa69]

Nowadays fr

[@kellyodell2897]

But where is your profit?

[@capturevideoproductions6531]

the profit is that after 25 years, you own a 1million dollar plus building (inflation, plus your upgrades) and you hopefully still have 2-3 rentals. "the building pays for itself" ... he just shared that this is his favorite way to over simplify quick calculations in your head. basically, do this when you consider a building, before spending too much time coming up with plans.

[@ScubaDiverMan711]

Or you can sell it after a year. Like if you buy it for a million and sell it for 1.5million then you generate $500K and pay off 1 million that you own to the bank

[@PrevailingFreedom]

@@ScubaDiverMan711 Lol, I’m not sure the value would appreciate 50% in one year.

[@ScubaDiverMan711]

@@PrevailingFreedom some places actually do especially if they are being build. Very few wanna buy a house That’s being build. A lot of people,prefer buying a house that’s already build and renovated. So when you buy a project from a builder for 800K and once it’s build it (most likely) would appreciate to 1.2 million and if the kitchen has a good renovation. Again it depends on the area and what country you live in. So many things apply

[@PrevailingFreedom]

@@ScubaDiverMan711 Okay but you’re putting money into the project, you aren’t making that entire 500k. You’d be generating the 100k, if that, that’s called flipping real estate. Even though it wouldn’t go up 50% for a half-done project.