John purchased a luxury residential property in Irvine directly from the builder. He lived in it for a short time before leasing it out. The market took off and he was sitting on quite a bit of equity that he wanted to put to work. We helped him sell the property at nearly double what he had originally purchased the home for. We assisted in setting up a 1031 exchange and reviewed hundreds of properties, submitting offers on over a dozen. As we worked through negotiations we continued to do our due diligence and he ended up purchasing directly from a commercial developer that was finishing a build-to-suit retail property with a national credit tenant. The tenant signed a corporate guaranteed 15-year NNN lease with three 5-year options to extend. The commercial lease started at $22,000/month with 2% annual rent increases.
SOLD RESIDENTIAL for $4,900,000 after closing costs proceeds were $4,665,000. PURCHASED NNN COMMERCIAL for $4,700,000
| SOLD | PURCHASED | |
| SFR Rental | NNN Commercial | |
| Sales/Purchase Price | $4,665,000 | $4,700,000 |
| INCOME | ||
| Gross Monthly Rent | $15,000 | $22,000 |
| Gross Annual Rent | $180,000 | $264,000 |
| OPERATING EXPENSES | ||
| Property Taxes | $34,400 | Paid by tenant |
| Insurance | $11,500 | Paid by tenant |
| Maintenance | $6,500 | Paid by tenant |
| HOA | $7,800 | None |
| Total Op.Ex. | $60,200 | $0 |
| Net Income | $119,800 | $264,000 |
