Top 6 properties of 04-28-09

1. Strip Center in Pasadena, TX: 6000 SF attractive strip center in middle-class (AHI $60K/yr) Houston suburbs. 100% NNN leased by four tenants. NOI $71K/yr. $890K. 8% Cap. Great for 1st time investors.
2. Hotel in San Antonio, TX: 79-room newly constructed Comfort Inn & Suites on over 2 acres of land conveniently located on I-10. NOI $638K/yr. $6.350M. 10.06% Cap.
3. Strip Center in Mesa, AZ: 14,875 SF stable strip center across from Banner Desert Medical Center near I-60. 100% NNN leased. NOI $166K/yr. $1.7M. 9.8% Cap.
4. Retail Pad in Oak Forest, IL: 9060 SF retail building constructed in 2000 on .89 acre lot next to Walgreens with excellent visibility. NOI $210K/yr. $2.1M. 10% Cap.
5. Retail Building in Bakersfield, CA: 8400 SF five-tenant retail building on 2.74 acres of land shadow-anchored by Albertsons. Only one small unit vacant. Actual NOI $148K/yr. $1.9M. 7.83% Cap. Buyer to assume $1.282M at low 5.87% interest rate.
   Upside potential when 100% leased
6. National Medical Office in San Antonio, TX: 9000 SF medical office to be constructed soon on 1.30 acres of land next to Northeast Methodist Hospital off of I-35. Long NNN lease. NOI $207K/yr. $2.957M. 7% Cap.
   
   © copyright Transmercial 2009. All rights reserved.

Top 8 properties 04-27-09

1. Jack In the Box in Greenfield, SC: 3000 SF restaurant built in 2001 on 1.06 acres adjacent to Walmart supercenter in a high income area. 20 yrs NNN ground lease from Jack in the Box Inc., i.e. you own the land and the tenant owns the building, with 13 yrs remaining. NOI $119K/yr. $1.589M. 7.5% cap.
2. Glenview Medical Center in Houston, TX: 12,000 SF multi-tenant medical center built in 2008 on 1.17 acres of land along I-45. 85% NNN leased with 2% - 2.8% annual rent increases. NOI $216K/yr. $2.550M. 8.5% Cap.
   - Upside potential: when fully leased
   - Recession resistant tenants: UTMB, Dental Smiles, Clinic 45 and Urgent Care
3. Shopping Center in Los Angeles, CA: 11,968 SF well located retail center build in 2008 on .61 acre lot at signalized intersection in densely populated area. 100% NNN leased. NOI $401K/yr. $5.735M. 7% Cap.
4. Miami Outlet Plaza in Miami, FL: 46,000 SF Outlet Plaza built in 1999 on 3.81 acres of land at intersection of I-94 and SR-826. 90% NNN leased. NOI $585K/yr. $8M. 9% Cap.
   - Excellent visibility: Highway frontage
   - Upside potential: When fully leased
5. Office Building in Scottsdale, AZ: 10,065 SF attractive office building constructed in 1998 near Scottsdale Shea Hospital. 100% leased. NOI $222K/yr. $2.875M. 7.74% Cap.
6. National Tire & Battery in Dallas, TX: brand new 8,074 SF retail building in fast growing Dallas/FW metro. 25-years absolute NNN corp lease. NOI $194K/yr. $2.586M. 7.5% Cap.
7. Strip Center in Humble, TX: 6770 SF stable strip center recently renovated near Deerbrook Mall off of Fwy-59. 100% NNN leased. NOI $106K/yr. $1.117M. 9.5% Cap.
8. Office Building in San Jose, CA (Willow St): 5024 SF two-story brick office building built in 1964 on .47 acre lot near Fwy-280. $1.350M.
   - Great opportunity for Owner User
   
   © Copyright Transmercial 2009. All rights reserved.

What Commercial Real Estate Investors Should Know about CAP Rate

Cap rate or capitalization rate or just cap is the ratio of annual rental income of the property over the purchase price. This number is often shown on commercial property listings. So you must know this jargon if you want to invest in commercial real estate. It's commonly a number between 3% to 10%.

For those who invest in the stock market, cap rate is the equivalence of the inverse of P/E ratio. So a cap of 5% is equivalent to P/E ratio of 20. The main difference is in real estate the earning is real while it's accounting earning in the stock market where earning can be reinstated years down the road!

The higher the cap the higher rental income the property produces and thus the less money you need for down payment. Experienced investors often look at the cap to screen out properties with low rental income. Some investors prefer properties with the cap that is higher than the interest rate they pay for the loan. That way they know they collect more from the tenants than they pay the bank.

When the property has high vacancy rate, listing brokers often show proforma (or potential) cap instead to catch investors' attention. Let's use the following example to illustrate the point. A property is listed for $1M and is 90% leased. It has gross leases with an actual gross income of $90K/year and $30K of annual expense. Assuming the proforma income is $110K/year when it's 100% leased at higher market rent. So 3 different listing brokers could display 3 different cap rates for the same property:

• The first broker may use NOI (Net Operating Income) of $60K/year ($90K of gross income less $30K of expenses) and thus the net CAP rate is 6%. This broker calculates the cap the way it should be.
• The second broker may use the gross income of $90K and so the gross CAP rate is 9%.
• The third broker may want to use the proforma income of $110K to get investors' attention and thus the proforma CAP rate is 11%!

So as an investor, you need to know what cap, e.g. net, gross or proforma the broker uses. Otherwise you may offer too much for the property. At the same time, when you tell your broker to look for properties with a certain cap rate, make sure the broker knows what cap rate you have in mind.
The returns of a commercial property investment come from 4 sources: appreciation, cash flow, i.e. cap rate, depreciation (tax writeoffs), and principal reduction from your mortgage payments. If you invest in the "right" property, the biggest chunk of your investment return should come from appreciation. There is often a conflict between cap rate and potential for strong appreciation. Properties that offer potential for strong appreciation, e.g. newer properties or ones in good location tend to have lower cap rate. On the other hand, properties that are in poor condition, or have ground lease are much harder to sell. As a result, seller will try to attract the buyers with a higher cap rate. If you see a property with unusually high cap rate in California, e.g. more than 7%, you should ask yourself "what's wrong with this property?" Chances are you will find a compelling reason why it is so high.

Is the property with highest cap the "best" property? The short answer is no. If investment was that simple, you would not need an investment advisor. Cap rate should be one of the various other factors you consider whether you should invest in a property. It should not be the only factor. Besides, you can improve the cap by

• Increase the occupancy rate.
• Raise the rent when the current leases expire.
• Negotiate for leases with annual rent increase.
• Improve the property to attract more upscale tenants.
• Reduce the expenses not reimbursed by the tenants.

By doing so, you can increase the cap rate and consequently the value of your investment

eFunding, Inc. changes its name to Transmercial

San Jose, April 27, 2009 -- eFunding, Inc. announces today that it changes its name to Transmercial. The name Transmercial is short for TransCommercial which reflects the fact the company does everything from A to Z for its clients in a commercial real estate transaction. “It’s just coincidence that ‘Tran’ in Transmercial is also the last name of company’s President”, Maria Martinez, the company spokesperson says. The company’s new website is www.transmercial.com.

In addition, the company also announces David V. Tran, its President, has received more than 40,000 viewings from his 34 articles on www.ezinearticles.com, a premiere internet magazine. His 34 articles cover various aspects of commercial real estate investments and are also reprinted on at least 24 websites. David continues to be the number 1 US commercial real estate expert author among over 400 on ezinearticles.com.

About Transmercial.

Transmercial is a full-service Commercial Real Estate Investments firm in San Jose, CA. It specializes in sales, purchase, loans, TIC, and self-directed IRA investment in commercial retail and medical centers. The company does business in all 50 states. It can be contacted by phone at 408-288-5500, by email at info@transmercial.com. Its website is www.transmercial.com. The company regularly offers 3 free seminars with no obligations from attendees:

1. How to Invest In Commercial Real Estate for Early Retirement Income.
2. How to Maximize Cash Flow With 1031 Tax-deferred Exchange
3. TIC: Fractional Interest in High-Valued Commercial Properties

Top 7 Retail Properties 04-24-09

1. Advance Auto Parts in Houston, TX: 7000 SF Advance Auto Part built in 2007 on ¾ acre lot. 15 yrs NNN lease with corp guaranty. NOI $127K/yr with 10% rent increase in year 11. $1.642M. 7.75% cap. Recession insensitive tenant.
2. Arby’s restaurant in Peoria, AZ: 3100 SF restaurant on .72 ac pad site to Home Deport & Sears just off Hwy 101 in Phoenix metro. 100% NNN leased till 2021 with corp guaranty. NOI $131K/yr with 1% annual rent bump. $1.749M. 7.5% cap.
3. Shopping Plaza in Oxnard, CA: 10,800 SF retail plaza completed in 1998 in a stable and strong income coastal town. NOI $237K/yr. $3.395M. 7% cap.
4. Shopping center in Orange, CA: 7500 SF well-maintained mature 6-unit strip center on ½ acres lot with easy access to hwy 55. 70% leased with just 1 vacant unit. Below market rents. Actual NOI $55K/yr. $1.35M. Only $180/SF! Upside potential.
5. Strip mall in Las Vegas, NV: 4110 SF strip center built in 2004 on ½ acre out parcel to a larger shopping center. 100% NNN leased by 3 tenants. NOI $128K/yr. $1.225M. 10.5% cap. Note: unusual high cap.
6. Starbucks Coffee in Tucson, AZ: 1750 SF new coffee shop on .82 acres parcel adjacent to I-10. 10 yrs NNN lease with no kickout clause. NOI $115K/yr. $1.396M. 8.25% cap.
7. Office building in Bentonville, AR: 31,240 SF single-tenant office building on 3.6 acres lot near Walmart/Sam’s Club Headquarters. Long term NNN with over 10 yrs remaining from a Fortune 500 company. NOI $408K/yr. $4.8M. 8.5% cap.
   
   © Copyright Transmercial. 2009 All rights reserved.

Top 6 Properties of 04-23-09

1. Strip Center in Fresno, CA: 16,250 SF good-looking strip center built in 1993 on over 1 acre lot with excellent tenant visibility in close proximity to Fwy-41. 100% NNN leased. NOI $257K/yr. $2.550M. 10% Cap.
2. Medical Office in Las Vegas, NV: 4,500 SF two-tenant medical office built in 2005 at busy intersection minutes from Desert Springs Hospital. 100% NNN leased. $969K. 8% Cap.
3. Retail Center in Orange, CA: 5770 SF appealing retail center built in 1993 at busy intersection near Fwy-55 in densely populated area. 100% leased. NOI $97K/yr. $1.550M. 6.29% Cap.
   Upside potential: tenants paying 25% below market rent.
4. Strip Center in Sacramento, CA: 10,791 SF beautiful strip center built in 2007 on over 1 acre lot at high-traffic intersection. 100% NNN leased by seven regional/local tenants. NOI $321K/yr. $4.150M. 7.74% Cap.
5. Retail Center in Phoenix, AZ: 9,141 SF retail center on .56 acre lot remodeled in 2005 with good tenant mix: Superior Motor Vehicle Services, Cristina’s Fashions & Music, Candy Store, Tattoo, Smoke Shop and Launderland. 100% NNN leased. NOI $140K/yr. $1.755M. 8.02% Cap. Buyer to assume $1.281M at 6.89% interest rate.
6. Shopping Center in Fishers, IN: 16,800 SF upscale shopping center built in 2005 on 3.2 acres of land next to CVS Pharmacy in affluent (AHI $110K/yr) Indianapolis suburbs. 100% NNN leased. $3.550M. 8.44% Cap. Buyer to assume $2.475M. at 5.75% interest rate.
   
   © Copyright Transmercial 2009. All rights reserved.

How Properties Are Selected

Every day there are about 300-350 new retail and office properties between $700K to $15M on the market in all 50 states listed by various companies. Out of these hundreds of listings, only the top 5-10 properties make it to the list that you see on this blog. By focusing on the short list of best properties, you will save time and are more likely to be successful with your investments.
Below are some of the selection criteria:
1. Price range: most investors look for properties between $700K and $15M.
2. Property types: most if not all investors of eFunding want to invest in retail properties and office buildings where tenants sign long term low-risk NNN leases, i.e. tenants pay for property taxes, insurance and maintenance expenses, in favor of landlords. They prefer not to invest in apartments where leases are mostly riskier gross, i.e. landlords pay for taxes, insurance and unpredictable maintenance expenses. Besides, apartment tenants normally don’t have much money which may affect their ability to pay the rent on time.
3. Cap rate: the return of investment must be “reasonable”, e.g. generally higher than the interest rate. The cap rate is typically lower in CA and higher in other states. However cap rate is not everything.
4. Property condition: investors prefer properties with little deferred maintenance.
5. Demographics: the selected properties tend to be in growing, high income and bigger cities/metros as they have better chance to appreciate and easier to find tenants. Besides they are easier to sell if needed.
· You won’t see properties in an area where people are moving out, e.g. Detroit downtown. These properties are easy to buy but hard to sell. In addition, it’s hard to get attractive financing, if at all, for these properties.
· Properties in a middle of nowhere won’t make it to the lists. These are also easy to buy but hard to sell.
· Properties in cities where the average household income is way below the national average, e.g. $28,000/year, also won’t make it to the list as these are most likely high-crime areas.
6. Occupancy: close to 100%.
7. Good Visibility: properties tend to have most if not all units facing the road to show case the tenant businesses. Tenants love visibility. What’s good for tenants is also good for investors.
8. Great locations: properties on a major artery with heavy traffic, near the freeway exit, on corner lot, near a mall, on an outparcel to a shopping center.
9. Land: if land is not included then it does matter how beautiful the property is, it will not be selected. This is the type of property that is easy to buy but hard to sell.
10. Lease Type: most likely NNN leases.
11. Parking spaces: at least 4 spaces per 1000 SF of leasable space.. It’s hard to lease a retail property unless it has sufficient parking spaces.
12. Age: not over 20 yrs old unless the property is well-maintained or recently renovated.
13. Price per square foot: sometimes a property is selected because the price per SF is low, e.g. less than $200/SF for a retail property in California. The main reason for the selection is appreciation potential.
14. Low rent: there is upside potential if the rent is below market. When the leases expire, the rent is adjusted to market rent which increases the value of the property.
15. Financing: sometimes a property may be selected because it offers attractive financing. For example, the seller is willing to carry 80% LTV at low interest rate or buyer can assume a loan at 5.5% interest, fixed for 10 years. This in turn may increase the overall return or cash on cash. On the other hand, a property may be screened out because it is difficult to get reasonable financing. For example, in this tight credit market it is extremely difficult to get financing for a single-tenant mom-and-pop restaurant.
16. Misc: A property could be selected or screened out for other reasons
· If a property has a dry cleaner with onsite cleaning, it will not be selected due to potential soil contamination by a chemical called Perc used in the cleaning process.
· A property in an affluent Santa Monica, CA could be selected simply because it’s rarely available.
· A vacant restaurant in front of a mall in San Francisco Bay Area could make the list because it may have lots of interests from investors in CA.

© Copyright Transmercial 2009. All rights reserved.

Top 3 Properties 04-22-09

1. Shopping Center in Springfield, IL: 28,792 SF well maintained shopping center on 3 acres of land built in 1997 near White Oaks Regional Mall along active retail corridor. 100% leased. NOI $479K/yr. $5.950M. 8.06% Cap.
2. National Tire & Battery in Irving, TX: 8064 SF retail building on .96 acre lot along busy retail corridor near Wal-Mart Supercenter. 25-years absolute NNN corp lease with CPI increases. NOI $201K/yr. $2.524M. 8% Cap.
3. Office Building in Augusta, GA: 6700 SF well maintained office building on .48 acre lot built in 1990 near Doctor’s Hospital. 73% NNN leased. NOI $62K/yr. $799K. 12.80% Cap. 1800 SF vacant unit great for owner user!
   
   © Copyright Transmercial -- Real Estate Investments 2009. All rights reserved.

Top 5 Retail Properties 04-21-09

1. Marketplace in Birmingham, AL: 67,325 SF 12-unit shopping center built in 1998 on 9.7 acres parcel in a growing and middle class area with AHI of $93K/yr. Anchored by Winn Dixie Grocery and Dollar Tree. 96% NNN leased with 1 small available unit. NOI $624K/yr. $5.625M. 11% cap! Note: no flyer attached but full brochure avail.
2. Single tenant retail in Sugarland, TX: 6050 SF retail building constructed in 2002 on ¾ acre parcel on a major artery in a fast growing and affluent (AHI $105K/yr) Houston suburb. 100% NNN leased by Sherwin William Paint till 2017. NOI $93K/yr. $1.275M. 7.34% cap.
3. Denny’s in Sparks, NV: 9920 SF Denny’s completed in 2006 on 1.29 acres outparcel to Kohl’s and Wal-mart in a fast growing Reno metro. Surrounded by Costco, Home Depot, Office Depot, Sports Authority, Best Buy, Michael's, PetsMart, Office Max, Ross, Bed Bath & Beyond, and Cost Plus World Market. 20 yrs absolute NNN ground lease (investor owns the land and tenant owns the building; if tenant does now renew the lease then the building belongs to investor). NOI $111K/yr with 10% rent bump every 5 yrs. $1.59M. 7% cap. Possible seller’s financing.
4. Lexington Hotel in Phoenix, AZ: 107-room hotel near downtown with meeting rooms, full service restaurant, room service, pool, sauna, spa, exercise room, guest laundry room, complementary business center, and free parking to guests. NOI $872K/yr. $9.18M. 9.5% cap.
5. Shopping strip in Van Nuys, CA: 5767 SF strip center built in 2004 on .45 ac corner lot in a densely populated (700K residents within 5 miles) and strong income (AHI $86K/yr) city in LA county. 100% NNN leased by 4 tenants. NOI $196K/yr. $2.695M. 7.3% cap.
   
   © Copyright eFunding, Inc. 2009. All rights reserved.

Top 6 Properties of 04-20-09

1. Office Building in Chandler, AZ: 9300 SF 2-story office building on .6 acre lot on a major blvd in Phoenix metro. NOI $60K/yr. Only $750K. 8.1% cap.
   Office Building in Santa Rosa, CA: 4400 SF single-tenant office building in Northern CA renovated by the tenant in 2003. NNN leased by a law firm with 5 yrs left. NOI $97K/yr. $1.32M. 7.36% cap.
2. Medical Building in Houston, TX: 12,000 SF 1-yr old medical building on 1.25 acres lot with I-45 frontage with 250,000 car/day. 85% NNN leased by 4 medical/dental tenants with 1 small unit available. Actual NOI $216K/yr. $2.55M. 8.5% actual cap. Upside potential when 100% leased.
3. Days Inn in San Antonio, TX: 120-unit motel with I-35 frontage. Renovated in 2008. NOI $540K/yr. $4.5M. 12% cap.
4. O’Reilly Auto Parts in Laplace, LA: 7000 SF franchised auto parts store built in 2008 in a high-ground growing New Orleans suburb. 20 yrs NNN lease by a national tenant. Rent bump in 11-th year. NOI $91K/yr. $1.138M. 8% cap. Recession resistant tenant.
5. Strip mall in Pearland, TX: 10,400 SF strip center on over 1 acre outparcel in front of Wal-mart supercenter on a major artery in a fast growing Houston suburb. 92% NNN leased by national tenants: Payless shoes, Verizon Wireless, Sally Beauty supplies. Actual NOI $182K/yr. $2.15M. 8.5% cap. Upside potential when 100% leased.
   
   © copyright eFunding, Inc. 2009. All rights reserved.

Top 5 properties of 04-17-09

eFunding--Commercial Real Estate Investments recently closed 2 transactions in which it represented the buyers:
1. $1.65M Urgent care center in Raleigh, NC.
2. $950K Goodyear auto service center in Morgan Hills, CA.

1. Medical building in Vancouver, WA: 7830 SF single-tenant medical building constructed in 2005. 100% NNN leased till 2021 by Pacific Cataract & Laser Institute with 13 locations in 5 states. NOI $184K/yr. $2.5M. 7.36% cap.
2. Rite Aid in Stockbridge, GA: 10,908 SF drug store on 1.5 aces corner lot close to I-75 in fast growing Atlanta suburb. Surrounded by more than 945,000 SF of retail space: Wal-Mart, Publix, Walgreen, CVS, Dollar General, Wachovia, Suntrust Bank, RBC Centura Bank, Starbucks, Outback, Wendy's and more. 100% NNN leased till 2017. NOI $193K/yr. $2.095M. 9.25% cap.
3. El Patio restaurant in Fremont, CA: 8582 SF restaurant in a middle-class Silicon Valley suburb with AHI over $100K/yr. 10 yrs NNN lease. NOI $228K/yr. $2.81M. 8% cap.
4. Mahogany Steakhouse in Omaha, NE: 6620 SF restaurant built in 2005 on 1.9 acres lot in a growing and very wealthy area with AHI over $149K/yr. 100% NNN leased by an experienced operator till 2022. NOI $283K/yr. $3.324M. 8.75% cap. Note: NE is the financially happiest state in the US according ABC News.
5. Brass Armadillo Antique mall in Phoenix, AZ: 40,000 SF single-tenant building on over 4 acres parcel just off I-17. 10 yrs NNN lease by a antique mall chain with 5 locations in 5 states. The mall attracts over 630 antique vendors which means it’s a good & stable business which also means investors with get the rent. NOI $245K/yr. $2.576M. 9.5% cap. Note: looks like this property with 4 acres of land is worth a lot more than the asking price.
   
   © Copyright eFunding Inc. 2009. All rights reserved.

Top 4 Properties 04-16-09

1. Del Taco Restaurant in Las Vegas, CA: 2308 SF retail restaurant on .62 acre lot built in 1999 shadow anchored by Albertsons on a highly visible location. Long absolute NNN corp lease with increases every 5 years. NOI $142K/yr. $2.110M. 6.75% Cap. Top performing store: 5.5% increases in sales in 2008
2. Two tenant strip center in Menlo Park, CA: 2000 SF strip center located on busy street with excellent visibility in affluent (AHI $210K/yr.) neighborhood. NNN leased. $1.150M.
3. CVS Pharmacy in Thomasville, NC: 13,225 SF CVS Pharmacy on 1.46 acres of land built in 2008 in prime commercial corridor near I-85. 25-year absolute NNN lease. NOI $279K/yr. $3.777M. 7.4% Cap.
4. Strip Center in Kennesaw, GA: 14,600 SF consisting of two retail buildings on over 2 acres of land recently constructed across from Wall-Mart with great access from US-41. Leased by regional/local tenants. NOI $176K/yr. $2.2M. 7% Cap.
   
   © copyright eFunding Inc 2009. All rights reserved.

Top 4 Properties of 04-15-09

1. Childtime Learning Center in Virginia Beach, VA: 6399 SF day care center on .88 acre lot surrounded by residential growth close to I-64. 100% NNN leased by strong corporation. NOI $91K/yr. $1.113M. 8.25% Cap.
2. Medical Office in Fort Wayne, IN: 8173 SF medical office built in 2006 on 1.41 acres of land across Dupont Hospital in prosperous (AHI $111K/yr) neighborhood. NOI $145K/yr. $1.7M. 8.53% Cap.
3. Medical Office in Henderson, NC: 7548 SF brand new medical office located along I-85. 100% NNN leased by recession resistant tenant. NOI $140K/yr. $1.555M. 9% Cap.
4. Office Building in Capitola, CA: 7864 SF well maintained office building on .55 acre lot built in 1985 in close proximity to Hwy-1 in a wealthy coastal town in Northern CA. $1.850M. GREAT FOR OWNER USER!!
   
   © Copyright eFunding Inc. 2009. All rights reserved.

Best 8 Retail Properties 04-14-09

“…It’s a great time to buy real estate now… I am buying many properties…” Donald Trump, interviewed on Good Morning America this morning.

1. Starbucks Coffee in Humble, TX: 1850 SF retail building on .63 acre lot across from Kroger in fast growing area. Corp guarantee with 10% rent increase after yr-5. NOI $68K/yr. $855K. 8% Cap. GREAT FOR FIRST TIME INVESTORS!
2. Napa Auto Parts in Houston, TX: 6000 SF recently constructed building on over 1 acre lot with excellent visibility. 15-years absolute NNN corp lease with 1% annual rent increases. $103K. $1.430M. 7.25% Cap.
3. Strip Center in Houston, TX: 14,459 SF well maintained strip center on 1.44 acres of land with solid tenant mix. 100% NNN leased. NOI $159K/yr. $1.8M. 8.86% Cap.
4. Medical Building in Jacksonville, FL: 13,542 SF attractive building on .80 acre lot next to St. Vincent’s Hospital near I-95/10. 100% leased by strong local/regional medical tenants. NOI $168K/yr. $2.1M. 8% Cap.
5. Retail Center in Riverside, CA: 6000 SF 3-tenant retail center on .78 acre lot build in 2001 adjacent to Albertson’s/Petco shadow anchored center. 100% NNN lease. NOI $164K/yr. $2.250M. 7.32% Cap.
6. Denny’s in Chino Hills, CA: 6958 SF restaurant on .92 acre lot in busy thoroughfare near Fwy-71 in a high income area. Long absolute NNN lease with 8% rent boost every 5-years. NOI $120K/yr. $1.846M. 6.5% Cap.
7. Medical Office in Phoenix, AZ: 19,045 SF mature two-story medical office on over 1 acre lot adjacent to Maryvale Hospital. 100% leased. NOI $165K/yr. $1.850M. 8.95% Cap.
8. Shopping Center in Phoenix, AZ: 78,334 SF well-kept shopping center on 5.52 acres of land built in 1988 shadow anchored by Food City/99 Cent Discount at hard corner close to Fwy-10 in booming Arizona area. NOI $738K/yr. $8.850M. 8.35% Cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 5 Properties of 04-13-09

1. Just Brakes in Mansfield, TX: 4082 SF brakes specialist store built in 2007 on 1.16 acres lot in Dallas suburb. 15 yrs absolute NNN corp lease at close of escrow. NOI $106K/yr with 10% rent bump every 5 yrs. $1.378M. 7.75% cap.
2. Office building in Anaheim, CA: 31,595 SF 3-story office building on 1.34 acres lot on a major artery in the heart of Anaheim. Easy access to I-7 an hwy 57. 91% leased. NOI $455K/yr. $5.95M. 7.66% cap.
3. Holiday Inn in Lake Worth, FL: 114-unit Holiday Inn Hotel on 6.6 acres lot in a commercial area in West Palm Beach. NOI $1.01M. $9.25M. 11% cap.
4. Brass Armadillo Antique Mall in Phoenix, AZ: 40,000 SF single-tenant antique mall just off I-17 with over 630 dealers. Long term NNN leased. NOI $244K/yr. $2.576M. 9.5% cap.
5. Rudy’s Pub and Grill in Foothill Ranch, CA: 8900 SF 10-yrs old restaurant on 1.27 acres lot in an affluent town (AHI $121K/yr) in Orange county. Located in front of a busy Target Superstore and surrounded by all the national retailers such as Wal-Mart, Pets-Mart, Staples, Babies R Us, Ralphs Grocery and many more. Long term NNN lease. NOI $116K/yr. $1.85M. 6.31% cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 6 Properties of 04-10-09

1. Walgreens in North Highlands, CA: 14,490 SF new drug store on over 2 acres of land in Sacramento metro. 75 yrs NNN lease. NOI $412K/yr. $5.645M. 7.3% cap.
2. Office Depot in Palo Alto, CA: rare 30,979 SF single-tenant building developed in 1999 on 2.65 acres parcel just off Hwy 101 in a wealthy (AHI $157K/yr) and prestigious town in Silicon Valley. Surrounded by IKEA, Home Depot, Nordstrom Rack, Sports Authority, Best Buy, Mi Pueblo Supermarket. 100% NNN leased till 2018. NOI $898K/yr. $10.88M. 8.25% cap.
3. Advance Auto Parts in Thornton, CO: new 7000 SF Advance Auto Parts on 1.25 acres outparcel to a new grocery-anchored shopping center in a stable Denver metro. 15 yrs NNN lease. NOI $140K/yr. $1.869M. 7.5% cap.
4. Quick Quack Car Wash in Citrus Heights, CA: 3972 SF franchised car wash on .84 acre lot across from Sunrise Mall in Sacramento. 15 yrs NNN lease. NOI $290K/yr. $3.263M. 9% cap.
5. Childtime Learning Center in Clovis, CA: 6365 SF built in 1986 on over 1 acre parcel in a fast growing Fresno metro. 10 yrs NNN corp lease by the 2nd largest childcare provider in the US. NOI $70K/yr with 10% rent increase every 5 yrs. $875K. 8% cap.
6. Retail center in Belleview, WA: 6450 SF retail center built in 2006 just off I-90 in a affluent Seattle suburb with AHI over $121K/yr. 100% NNN leased by Starbucks Coffee and Jack In The Box. NOI $209K/yr. $2.79M. 7.5% cap.
   
   © Copyright eFunding Inc. 2009. All rights reserved.

Top 7 Properties 04-09-09

1. Office building in Long Beach, CA: 13,144 SF office building with park-like courtyard with easy access to I-405 and in a high income area. 100% leased by 10 tenants. NOI $213K/yr. $3.199M. 6.67% cap. Seller will finance with $500K down. 10% cash on cash!
2. Medical office building in Pomona, CA: 32,387 SF 2-story medical office building constructed in 1987 on 1.95 acres parcel next door to Pomona Valley Medical Hospital just off I-10. 97% leased. NOI $512K/yr. $7.2M. 7.12% cap.
3. Shopping Center in Independence, MO: 160,423 SF shopping center in Kansas suburb. Anchored by Price Chopper supermarket and Dollar General. NOI $768K/yr. $8M. 9.6% cap.
4. Walgreens in Fresno, CA: 14,820 SF brand new drug store on 1.58 acres lot at the corner of Ashland and Cornelia. 20 yrs NNN lease. NOI $345K/yr. $4.931M. 7% cap.
5. Neighborhood Center in Surprise, AZ: 48,650 SF on 6.2 acres parcel at a high-profile intersection in a fast growing Phoenix suburb. Surrounded by 2M SF of National Retailers (Wal-Mart, Home Depot, Target, and Best Buy. NOI $1.164M. $13.7M. 8.5% cap.
6. Medical office building in Henderson, NV: 4650 SF 3-suite medical office building in a high income (AHI over $108K/yr) Las Vegas suburb. 100% NNN leased. NOI $98K/yr. $1.25M. 8% cap.
7. Kindercare Learning Center in Yorba Linda, CA: 8930 SF childcare center on 1.5 acres parcel in an affluent (AHI $140K/yr) city in Orange County. 17 yrs NNN lease with 6 yrs remaining by a national childcare provider. NOI $240K/yr. $3.2M. 7.5% cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 4 properties of 04-08-09

1. Strip center in Douglasville, GA: 11,200 SF retail strip on 1.4 acres outparcel to a Home Depot in a prime commercial corridor in a rapidly growing Atlanta suburb. 100% NNN leased. NOI $106K/yr. $1.25M. 8.5% cap. Ideal investment for first time investors.
2. Office building in Santa Clara, CA: 49,025 SF 2-story office building on 2.83 acres lot right at Hwy 101 and San Tomas in the heart of fast growing and high-income (AHI over $100K/yr) Silicon Valley. 100% leased by 4 tenants. NOI $950K/yr. $10.9M. 8.72% cap.
3. Clarion Bristol Hotel in San Jose, CA: 47-unit hotel on Bascom ave. with easy access to Hwy 17. Located in heart of Silicon Valley where AHI is over $117K/yr. NOI $536K/yr. $5.76M. 9.32% cap.
4. Campbell Inn in Campbell, CA: 95-room upscale & luxurious hotel on 4.23 acres of land in Silicon Valley with AHI over $110K/yr. NOI $1.105M. $10.8M. 10.24% cap.
   
   © Copyright eFunding Inc. 2009. All rights reserved.

How Properties Are Selected

Every day there are about 300-350 new retail and office properties between $700K to $15M on the market in all 50 states listed by various companies. Out of these hundreds of listings, only the top 5-10 properties make it to the list that you see on this blog. By focusing on the short list of best properties, you will save time and are more likely to be successful with your investments.
Below are some of the selection criteria:
1. Price range: most investors look for properties between $700K and $15M.
2. Property types: most if not all investors of eFunding want to invest in retail properties and office buildings where tenants sign long term low-risk NNN leases, i.e. tenants pay for property taxes, insurance and maintenance expenses, in favor of landlords. They prefer not to invest in apartments where leases are mostly riskier gross, i.e. landlords pay for taxes, insurance and unpredictable maintenance expenses. Besides, apartment tenants normally don’t have much money which may affect their ability to pay the rent on time.
3. Cap rate: the return of investment must be “reasonable”, e.g. generally higher than the interest rate. The cap rate is typically lower in CA and higher in other states. However cap rate is not everything.
4. Property condition: investors prefer properties with little deferred maintenance.
5. Demographics: the selected properties tend to be in growing, high income and bigger cities/metros as they have better chance to appreciate and easier to find tenants. Besides they are easier to sell if needed.
· You won’t see properties in an area where people are moving out, e.g. Detroit downtown. These properties are easy to buy but hard to sell. In addition, it’s hard to get attractive financing, if at all, for these properties.
· Properties in a middle of nowhere won’t make it to the lists. These are also easy to buy but hard to sell.
· Properties in cities where the average household income is way below the national average, e.g. $28,000/year, also won’t make it to the list as these are most likely high-crime areas.
6. Occupancy: close to 100%.
7. Good Visibility: properties tend to have most if not all units facing the road to show case the tenant businesses. Tenants love visibility. What’s good for tenants is also good for investors.
8. Great locations: properties on a major artery with heavy traffic, near the freeway exit, on corner lot, near a mall, on an outparcel to a shopping center.
9. Land: if land is not included then it does matter how beautiful the property is, it will not be selected. This is the type of property that is easy to buy but hard to sell.
10. Lease Type: most likely NNN leases.
11. Parking spaces: at least 4 spaces per 1000 SF of leasable space.. It’s hard to lease a retail property unless it has sufficient parking spaces.
12. Age: not over 20 yrs old unless the property is well-maintained or recently renovated.
13. Price per square foot: sometimes a property is selected because the price per SF is low, e.g. less than $200/SF for a retail property in California. The main reason for the selection is appreciation potential.
14. Low rent: there is upside potential if the rent is below market. When the leases expire, the rent is adjusted to market rent which increases the value of the property.
15. Financing: sometimes a property may be selected because it offers attractive financing. For example, the seller is willing to carry 80% LTV at low interest rate or buyer can assume a loan at 5.5% interest, fixed for 10 years. This in turn may increase the overall return or cash on cash. On the other hand, a property may be screened out because it is difficult to get reasonable financing. For example, in this tight credit market it is extremely difficult to get financing for a single-tenant mom-and-pop restaurant.
16. Misc: A property could be selected or screened out for other reasons
· If a property has a dry cleaner with onsite cleaning, it will not be selected due to potential soil contamination by a chemical called Perc used in the cleaning process.
· A property in an affluent Santa Monica, CA could be selected simply because it’s rarely available.
· A vacant restaurant in front of a mall in San Francisco Bay Area could make the list because it may have lots of interests from investors in CA.

Top 9 Properties of 04-07-09

1. Shopping center in West Valley, UT: 49,530 SF retail center on 5 acres of land in a fast growing Salt Lake city suburb. Shadow anchored by Kohl’s department store. 100% NNN leased by all national tenants: Michaels, Petsmart, Weight Watchers, Starbucks, Sprint, Quizno's, and Fantastic Sam's. NOI $772K/yr. $9.9M. 7.8% cap. Buyer to assume 6.6M loan at low 5.21% interest.
2. Chevron gas station in Santa Rosa, CA: 5 MPDs gas station with convenient store on 2/3 acre parcel close to Hwy 101 in a well-off city North of San Fran. Pumping 100,000 gallons/month and 80K gross in store. $2.199M.
3. Starbucks in Lakeland, FL: 1816 SF 24-hr Starbucks built in 2007 just off I-4 in Tampa suburb. Great location
   · near 851-bed Lakeland regional medical center.
   · Surrounded by 10 hotels
   10 yrs NNN lease. NOI $114K/yr. $1.404M. 8.14% cap
4. CVS Pharmacy in Pembroke Pines, FL: 13,780 SF drug store built in 2003 on 1.4 acres parcel in Miami metro. NOI $327K/yr. $4.22M. 7.75% cap.
5. Texas Roadhouse restaurant in Palm Bay, FL: 7202 SF restaurant built in 2004 on 2.34 acres parcel just off I-95. New 10 yrs absolute NNN lease by Texas Roadhouse (NASDAG: TXRH) with corp guaranty. NOI $234K/yr. $2.909M. 8.25% cap.
6. Jiffy Lube in Surprise, AZ: 2500 SF new Jiffy Lube in an explosive growth (109%) Phoenix metro. 20 yrs NNN lease by a successful franchisee with 60 locations. NOI $142K/yr. with 3% annual rent bump. $1.68M. 8.5% cap.
7. Strip Mall in Dallas, TX: 10,420 SF strip center built in 2005 on 1.37 acres pad site to Wal-mart and Sams Club next to I-30 exit. 100% NNN leased by 4 good tenants: Monarch Dental, Check Into Cash, Foot Locker and Pizza Hut. NOI $219K/yr. $2.58M. 8.5% cap.
8. Dollar General Store in Stockbridge, GA: 9100 SF brand new Dollar General store on over 1 acre parcel near I-75 exit in a fast growing Atlanta suburb. 10 yrs NNN lease. NOI $83K/yr. $980K. 8.5% cap. Recession insensitive tenant.
9. La Petite Academy Preschool in Lancaster, CA: 6700 SF preschool on 1 ac lot in a growing city in Los Angeles. 100% leased by a national childcare provider. NOI $81K/yr. $1.3M. 6.2% cap. Note: don’t mis-judge this property by the low cap rate.
   
   © copyright efunding Inc. 2009. All rights reserved.

Top 5 Properties Among 320+ 04/06/09

1. Retail center in Brentwood, CA: 7969 SF new retail center in a fast growing (66% since 2000) and strong income (AHI $87K/yr) city in the SF Bay Area. 90% NNN leased with just one small 809 SF vacant unit. Current NOI $236K/yr. $2.825M. 8.35% cap. Upside potential when 100% leased.
2. Shopping Plaza in Layton, UT: 45,837 SF plaza on 3.12 acres parcel in a growing and strong income Salt Lake city suburb. Anchored by Crossroads Fitness with a new 10 yrs lease. 91% NNN leased. NOI $448K/yr. $5.6M. 8% cap.
3. Strip mall in Des Moines, IA: 12,000 SF strip center built in 1997 on 1.48 acres outparcel to a Home Depot. 100% NNN leased by 4 good tenants: Papa Murphy’s pizza, Classic Tan,Verizon Wireless and Monarch Dental. NOI $235K/yr. $2.694M. 8.75% cap.
4. Strip center in Cathedral City, CA: 6600 SF strip center built in a fast growing city in Riverside. 84% NNN leased with 1 pending lease unit. NOI $123K/yr. $1.5M. 8.2% cap.
5. Shopping center in Cathedral City, CA: 11,550 SF retail center on a corner lot with excellent visibility. 100% NNN leased. NOI $240K/yr. $3M. 8.05% cap.
   
   © copyright eFunding Inc 2009. All rights reserved.

Top 4 Commercial Properties of 04-03-09

1. Strip mall in Chatsworth, CA: 7584 SF strip center in a high income city in Los Angeles. 93% leased. NOI $171K/yr. $2.5M. 6.87% cap.
2. Medical office complex in Naples, FL: 34,747 SF class-A modern medical office complex constructed in 1996 on 4.26 acres parcel in a wealthy Naples with AHI over $148K/yr. 90% leased. NOI $700K/yr. $9M. 8% cap.
3. Medical office building in Mesa, AZ: 7369 SF medical building on .69 acre lot in a high income Phoenix suburb. 100% NNN leased by doctors/dentists. NOI $132K/yr. $1.65M. 8% cap.
4. Applebee’s in Cedar Hills, TX: 5640 SF franchised restaurant on 1.6 acres outparcel to a new Super Wal-mart & across from 725,000 SF new regional mall in a fast growth, high income Dallas suburb. New 20 yrs absolute NNN lease from a franchisee with 37 stores and $20M in networth. NOI $129K/yr. $1.52M. 8.5% cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 8 Properties of 04-02-09

1. Strip mall in Dublin, CA: 8420 SF Starbucks strip mall built in 2006 on .6 ac parcel just off I-680 in a high income (AHI $122K/yr) Bay area. 100% NNN leased by 5 tenants. NOI $280K/yr. $4M. 7% cap.
2. Starbucks in Houston, TX: 1740 SF brand new Starbucks on .6 acre parcel on I-45 in SE Houston. 10 yrs NNN corp lease. NOI $86K/yr with 10% rent bump every 5 yrs. $1.147M. 7.5% cap.
3. Wendy’s in Jacksonville, FL: 3202 SF franchised restaurant built in 2000 on .93 ac just off I-95. 20 yrs absolute NNN lease from an experienced franchisee with 69 stores. Location with strong sales of over $1M/yr. NOI $79K/yr with CPI-based annual rent increase. $1.05M. 7.5% cap.
4. Popeye’s Chicken & Biscuits in Randallstown, MD: 2300 SF restaurant on ½ acre lot on a major artery in Baltimore suburb. 20 yrs NNN lease froma 29-unit operator with over $28M in annual revenue. NOI $104K/yr. $1.216M. 8.55% cap.
5. Applebee’s in Tucson, AZ: 5033 SF restaurant built in 2001 on 1.13 acres lot on a major East West artery. New 15 yrs NNN lease from the 8-th largest restaurant franchisee with 95 restaurants and 7500 employees. NOI $180K/yr. Store with strong sales of over $2.4M/yr. $2.32M which means tenant should be profitable to pay rent. 7.75% cap.
6. Walgreens in Mesa, AZ: 15,525 SF drug store on 1.8 acres corner lot. Long term NNN lease. NOI $231K/yr. $2.8M. 8.25% cap.
7. Strip center in Lomita, CA: 3750 SF 3-unit strip mall shadow anchored by Albertsons supermarket. 2 units leased with 1 small unit available. Proforma NOI $75K/yr. Only $997K. 7.5% cap.
   · Excellent visibility: Pacific Coast highway frontage.
   · Great location: in a stable, densely-populated (over 400K resident within 5 miles) and strong income (AHI over $94K/yr).
8. Single-tenant retail in Richmond, VA: 5400 SF free-standing building as a part of a larger power shopping center anchored by 82,000 SF Kohl’s and 63,000 SF Ukrops’ grocery store. New 10 yrs NNN leased by Lane Bryant, a brand name tenant. NOI $140K/yr. $1.4M. 10% cap.
   
   © copyright efunding Inc. 2009. All rights reserved.

Top 8 Properties Among Over 300 4/1/09

1. Ramada Inn in Altamonte, FL: 141-unit recently renovated hotel just off I-4 and near Altamonte Mall in Orlando metro. Price reduced to 4.55M or just over $32K/unit.
2. Joe’s Crab Shack restaurant in Sanford, FL: 8046 SF franchised restaurant on 2 acres parcel at the entrance of Seminole Towne Center Mall in Orlando metro. 20 yrs absolute NNN lease by a corp with 120 locations. NOI $262K/yr. $3.105M. 8.45% cap.
3. Advance Auto Parts in Decatur, GA: 7000 SF on 1 ac parcel with recent $200K in renovation in Atlanta metro. 100% NNN leased. Tenant has been at this location over 10 yrs. NOI $71K/yr. $910K. 7.9% cap. Recession insensitive tenant. Great for 1st time investor.
4. Retail Strip in Medford, OR: 8400 SF multi-tenant retail center shadow anchored by Albertson’s supermarket in a stable city. 100% NNN leased. NOI $111K/yr. $1.4M. 8% cap. Seller will finance with 20% down payment at 6% interest.
5. Shopping Plaza in Concord, NC: 39,443 SF new plaza in a growing Charlotte suburb. Anchored by peak Fitness, the largest fitness club in NC. 90% leased. NOI $328K/yr. $4.25M. 8.25% cap. Note: per the WSJ 4/1/09, home prices in Charlotte (among 20 major US metros) have lowest price drop of about 2% since May 2006 national housing market peak (Phoenix, Las Vegas, Miami, San Fran, San Diego all have at least 40% drops).
6. Shopping Center in West Palm Beach, FL: 24,360 SF shopping center on 4.35 acres corner lot on a major artery just one block from I-95. 92% NNN leased. NOI $361K/yr. $4.375M. 8.25% cap.
7. Medical center in Federal Way, WA: 17,096 SF medical office building on 2.74 acres lot in a strong income Seattle metro. 100% NNN leased. NOI $270K/yr. $3.5M. 7.73% cap.
8. Walgreens in Broomfield, CO: 13,905 SF drug store built in 1997 on 2.16 acres corner parcel in a prime commercial corridor in a fast growing (24% since 2000) and high income (AHI $93K/yr) Denver suburb. Surrounded by K-Mart, Hobby Lobby, Home Depot, Staples, Big Lots and Kohl's. 100% NN leased. NOI $270K/yr. $3.18M. 8.5% cap. Note: this is the highest cap I have seen on a Walgreens at a very good location.
   
   © Copyright eFunding Inc. 2009. All rights reserved.

Top 9 Properties of 03-31-09

1. Retail/office building in Milpitas, CA: 7500 SF vacant 2-story building right at I-680 and Calaveras Blvd. Zoned for restaurant, medical, or professional office. AHI of $123K/yr with 1 mile radius. $1.5M.
2. Retail strip in Inglewood, CA: 11,431 SF retail strip built in 1986 near Hollywood race track in a densely populated area with over ¾ million residents within 5 miles radius. 100% leased. NOI $425K/yr. $5.6M. 7.6% cap.
3. Tutor Time Childcare in Gilbert, AZ: 10,414 SF childcare center built in 2001 on 1.3 acres lot in a fast growing and wealthy (AHI $97K/yr) Phoenix suburb. 100% NNN leased till 2022. NOI $205K/yr with up to 3% annual rent bump. $2.35M. 8.75% cap.
4. Orchard Supply hardware in Antioch, CA: 52,161 SF store on 3.22 acres lot across from 501,000 SF Somersville Towne Center Mall just off hwy 4. 100% NN leased. NOI $556K/yr. $7.3M. 7.62% cap.
5. Shopping center in Houston, TX: 22,650 SF multi-tenant shopping center just 1 block from I-45. 100% leased. NOI $235K/yr.$2.65M. 8.9% cap.
6. Walgreens in El Paso, TX: 13,453 SF drug store constructed in 1995 on 1.63 acres lot in a fast growing city. 100% NNN leased. NOI $229K/yr. $2.7M. 8.5% cap. Recession-insensitive tenant.
7. CVS Pharmacy in Las Vegas, NV: 10,800 SF 5-yr old drugstore on 1.25 acres parcel in a fast growing (78% since 2000) and high-income part of the city (AHI $86K/yr). 100% NNN leased till 2028. NOI $223K/yr. 8.41% cap. Buyer to assume $2.384M loan. Note: this is a zero cash flow property ideally for investors who want to write off big losses from other investments, e.g. stocks market.
8. Community center in Mesa, AZ: 69,568 SF community retail center built in 2002 on over 8 acres corner parcel. Shadow anchored by Target. Located in a fast growing Phoenix suburb. 86% NNN leased. NOI $1.167M. $12.975M. 9% cap.
9. Meineke Muffler in Harrisburg, NC: 3600 SF auto repair center built in 2004 on .69 ac parcel in a fast growing (49%) and high income (AHI $75K/yr) Charlotte suburb. 100% NNN leased till 2014. NOI $81K/yr with 3% annual rent bump. $1M. 8.1% cap.
   
   © copyright efunding Inc. 2009. All rights reserved.

Top 8 Properties 03-30-09

1. Big O Tires in phoenix, AZ: 5100 SF single tenant retail center built in 2004 on .70 acre lot. Shadow-anchored by Walgreens at a dominant retail intersection in a fast growing area. Long absolute NNN corp lease with 3% annual rent increases. NOI $144K/yr. $1.9M. 7.25% Cap.
2. Strip Center in Pacoima, CA: 15,498 SF strip center built in 2003 on .81 acre lot at a signalized intersection on main retail corridor. NNN leased by ten tenants. NOI $341K/yr. $4.880M. 7% Cap.
3. Retail Center in Winder, GA: 10,500 SF attractive retail center built in 2006 on 1.14 acres of land & surrounded by national tenants. 100% NNN leased. NOI $193K/yr. $2.395M. 8.09% Cap. Buyer to assume $1.860M at 5.99% interest rate.
4. Strip Center in Phoenix, AZ: 22,750 SF stable strip center on 1.38 acres of parcel with good tenants mix near Fwy-51. 100% leased. NOI $195K/yr. $2.5M. 7.8% Cap.
5. Family Dollar in Conyers, GA: 9750 SF good-looking retail building on one acre lot near I-20 in fast growing Atlanta suburbs. 100% NNN lease. NOI $89K/yr. $1.120M. 8% Cap. Recession insensitive tenant.
6. Retail building in Roseville, CA: 15,112 SF retail center on 1.19 acres of land between Kaiser Permanente and I-80. 100% NNN leased by 2 tenants. NOI $323K/yr. $3.995M. 8.10% Cap.
7. Retail Center in Las Vegas, NV: brand new 8600 SF attractive retail building on 1 acre lot in fast growing area. 100% leased by three tenants: Tire Works, Restaurant & Beauty Shop. NOI $316K/yr. $3.611M. 8.75% Cap.
8. Medical Office in Desoto, TX: 4200 SF medical office built in 2006 conveniently lactated between Methodist Charlton Hospital and Fwy-67/I-20 near Southwest Center Mall in fast growing Dallas suburbs. 100% leased by 2 tenants. NOI $80K/yr. $975K. 8.26% Cap. Great for 1st time investors.
   
   © copyright efunding inc 2009. All rights reserved.

Top 4 Properties of 03-27-09

1. Walgreens Pharmacy in Albuquerque, NM: brand new 16,500 SF pharmacy in growing middle-class (AHI $70K/yr) area. 100% absolute NNN lease. NOI $384K/yr. $5.202M. 7.4% Cap.
2. Day Care Facility in West Windsor, NJ: 6500 SF attractive day care center in a very wealthy area with AHI over $179K/yr. 100% NNN leased by strong operator with 600 centers. NOI $124K/yr. $1.560M. 8% Cap.
3. Shopping Center in Peoria, AZ: 2-years old 23,075 SF multi-tenant building on almost 3 acres of land with great access/visibility from Loop-101. 90% leased by national/regional tenants: NextCare Urgent Care, FedEx Kinko’s, Sprint and more. Actual NOI $703K/yr. $7.995M. 8.8% Cap.
   Upside potential
   Seller financing available
4. CVS Pharmacy in Austin, TX: 10,906 SF pharmacy on 1.65 acres of land built in 1997 at hard corner close to I-35. 100% NNN lease. NOI $227K/yr. $3.292M. 6.9% Cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 7 Properties of 03-26-09

1. Strip Center in Long Beach, CA: 8737 SF strip center built in 2006 conveniently located at a busy intersection near Fwy-710/91. 100% NNN leased. NOI $284K/yr. $4.075M. 7% Cap.
2. Retail Center in Bellflower, CA: 7457 SF eye-catching retail center built in 2003 shadow anchored by Walgreens across from Food-4-Less with excellent tenants mix. 100% NNN leased. NOI $297K/yr. $4.2M. 7.09% Cap.
3. Strip Center in Northbridge, CA: 5686 SF strip center on .51 acre lot along major thoroughfare close to Fwy-405/118 & 101. NNN leases. NOI $141K/yr. $2.4M. 7.38% Cap. Buyer to assume $1.595M at 6.29% interest.
4. Retail Building in Chandler, AZ: 11,708 SF recently constructed retail center shadow anchored by La Petite Academy & close to Fwy-202 in fast growing (1,248.83%) Phoenix suburbs. NNN leases. NOI $313K/yr. $4.050M. 7.75% Cap.
5. Pep Boys in Greece, NY: 22,227 SF recently renovated retail building on 3.41 acres of land across from Sam’s Club. 15-years absolute NNN lease with 1.5% annual rent increases. NOI $206K/yr. $2.757M. 7.5% Cap.
6. Just Brakes in Knightdale, NC: 7600 SF retail building on .98 acre lot built in 2007 along Hwy-54 in fast growing Raleigh suburb. 100% NNN corp lease. NOI $197K/yr. $2.422M. 8.15% Cap.
7. Strip Center in Atlanta, GA: 13,264 SF strip center built in 2007 on over 2 acres of land adjacent to Walgreens near I-285. 100% leased. NOI $371K/yr. $4.5M. 8.25% Cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

Top 8 Commercial Properties 03-25-09

1. Sweet Tomatoes in Houston, TX: 8080 SF restaurant on 1.69 acres of land built in 1999 along I-10 in fast growing and well off neighborhood. 100% NNN corp lease with rent increases. NOI $274K/yr. $3.570M. 7.68% Cap.
2. Applebee’s in Fort Collins, CO: 4700 SF Applebee’s restaurant with excellent visibility to I-287 near Foothills Mall. 101% NNN lease by the second largest franchisee in the US. $1.390M. 8.35% Cap.
3. Office Building in Colton, CA: 6852 SF stunning office building on .85 acre lot off of Fwy-215. $900K. Only $131 per sf.
4. Carl’s Jr in Queen Creek, AZ: 3000 SF restaurant on 1 acre lot shadow anchored by WalMart Supercenter in booming (287.53%) Phoenix suburb. 20-yr NNN lease. NOI $160K/yr. $2M. 8% Cap.
5. Applebee’s Restaurant in Arroyo Grande, CA: 6344 SF restaurant near Hwy 101 in San Luis Obispo County. 100% NNN lease. NOI $272K/yr. $3.2M. 8.5% Cap.
6. Retail Building in Fountain Hills, AZ: 16,276 SF nice looking retail center on 1.16 acres of land built in 1999 shadow anchored by Walgreens and hard corner. 100% lease. NOI $311K/yr. $4.150M. 7.5% Cap.
7. Shopping Center in Tinley Park, IL: 20,343 SF shopping center on over 3 acres of land built in 2004. 94% NNN leased with strong tenant mix. NOI $393K/yr. $5M. 7.86% Cap.
8. Strip Center in Northridge, CA: 3890 SF strip center at signalized intersection near Fwy-101/118 in densely populated Los Angeles, CA. 100% leased. NOI $73K/yr. $1.2M. 6.09%Cap.
   
   © copyright eFunding Inc. 2009. All rights reserved.

How properties are selected

Every day there are about 300-350 new retail and office properties between $700K to $15M on the market in all 50 states listed by various companies. Out of these hundreds of listings, only the top 5-10 properties make it to the list that you see on this blog. By focusing on the short list of best properties, you will save time and are more likely to be successful with your investments.
Below are some of the selection criteria:
1. Price range: most investors look for properties between $700K and $15M.
2. Property types: most if not all investors of eFunding want to invest in retail properties and office buildings where tenants sign long term low-risk NNN leases, i.e. tenants pay for property taxes, insurance and maintenance expenses, in favor of landlords. They prefer not to invest in apartments where leases are mostly riskier gross, i.e. landlords pay for taxes, insurance and unpredictable maintenance expenses. Besides, apartment tenants normally don’t have much money which may affect their ability to pay the rent on time.
3. Cap rate: the return of investment must be “reasonable”, e.g. generally higher than the interest rate. The cap rate is typically lower in CA and higher in other states. However cap rate is not everything.
4. Property condition: investors prefer properties with little deferred maintenance.
5. Demographics: the selected properties tend to be in growing, high income and bigger cities/metros as they have better chance to appreciate and easier to find tenants. Besides they are easier to sell if needed.
· You won’t see properties in an area where people are moving out, e.g. Detroit downtown. These properties are easy to buy but hard to sell. In addition, it’s hard to get attractive financing, if at all, for these properties.
· Properties in a middle of nowhere won’t make it to the lists. These are also easy to buy but hard to sell.
· Properties in cities where the average household income is way below the national average, e.g. $28,000/year, also won’t make it to the list as these are most likely high-crime areas.
6. Occupancy: close to 100%.
7. Good Visibility: properties tend to have most if not all units facing the road to show case the tenant businesses. Tenants love visibility. What’s good for tenants is also good for investors.
8. Great locations: properties on a major artery with heavy traffic, near the freeway exit, on corner lot, near a mall, on an outparcel to a shopping center.
9. Land: if land is not included then it does matter how beautiful the property is, it will not be selected. This is the type of property that is easy to buy but hard to sell.
10. Lease Type: most likely NNN leases.
11. Parking spaces: at least 4 spaces per 1000 SF of leasable space.. It’s hard to lease a retail property unless it has sufficient parking spaces.
12. Age: not over 20 yrs old unless the property is well-maintained or recently renovated.
13. Price per square foot: sometimes a property is selected because the price per SF is low, e.g. less than $200/SF for a retail property in California. The main reason for the selection is appreciation potential.
14. Low rent: there is upside potential if the rent is below market. When the leases expire, the rent is adjusted to market rent which increases the value of the property.
15. Financing: sometimes a property may be selected because it offers attractive financing. For example, the seller is willing to carry 80% LTV at low interest rate or buyer can assume a loan at 5.5% interest, fixed for 10 years. This in turn may increase the overall return or cash on cash. On the other hand, a property may be screened out because it is difficult to get reasonable financing. For example, in this tight credit market it is extremely difficult to get financing for a single-tenant mom-and-pop restaurant.
16. Misc: A property could be selected or screened out for other reasons
· If a property has a dry cleaner with onsite cleaning, it will not be selected due to potential soil contamination by a chemical called Perc used in the cleaning process.
· A property in an affluent Santa Monica, CA could be selected simply because it’s rarely available.
· A vacant restaurant in front of a mall in San Francisco Bay Area could make the list because it may have lots of interests from investors in CA.