commercial property in LA, good deal?

[kelingdun]

Hi:

I am looking at a commercial property in the suburb of LA (Alhambra).
This is a professonal building with doctor/dentist clinic, Attorney office,
and insurance offices. 10000 sq 2 story building. Income, 15K/month, tripple net. Asking 2.9 million dollar ( gross multiple of 16).

Can anyone tell me if this is a good deal? It is about even with 30% down. But I am thinking rent will increase 5% a year, so in 3~5 years, this
thing could start to generate income. I know for investment, it's better to
have possitive cash flow fast, but deal like that is hard to find these days.
Unless I stay put and hope next year the economy will be bad.

Advise appreciated.

[hollyshirley]

What is more important to you, having a triple net lease property in the location that you desire, that is loosing money, or having an income producing nnn somewhere else in the U.S? To me, location isn't the issue. Who is backing the lease and how long. If you put down $870,000 it should postive cash flow by 25%- right now!

[kelingdun]

I agree with you. But else where, I have to trust the property manager
100%. By the way, I am open to the idea though. Where? Texas? Arizona?

[hollyshirley]

With NNN Lease Properties, you have a professional single tenant such as, Walgreens, Burger King, CVS Pharmacy, and etc. They are responsible for taxes, insurance, and maintenance; thus triple net. However, multi-family properties have many unprofessional tenants (section 8), thus requiring a management company.

As long as the NNN lease is guaranteed by a professional tenant, I would not see the need for a management company.

If you knew that your property was being maintained by a professional tenant, would you still feel the need to go see it?