buying a warehouse

[Paint and Air Sportz]

Quick question about financing a warehouse, i figured, that the best long term solution for my new Paintball complex would to buy a 15000 sqft warehouse in stead of leasing. I'm looking at spending roughly 1.5 million$. Now what type of loan would i be looking to get? A mortgage? Home equity? Standard business loan?

[SpencerB]

Quick question about financing a warehouse, i figured, that the best long term solution for my new Paintball complex would to buy a 15000 sqft warehouse in stead of leasing. I'm looking at spending roughly 1.5 million$. Now what type of loan would i be looking to get? A mortgage? Home equity? Standard business loan?

You'll be getting a mortgage to buy the property.

Now, how you get the capital to pay for the down payment and mortgage is open to debate. If possible, you'll want to have enough positive cash flow from your business operations to pay the monthly mortgage payment. If you don't, you better have some cash reserves because negative cash flow is the ultimate killer of new start ups.

Just a heads up, I would calculate many different financial senarios to make sure your long term goal of owning this warehouse doesn't kill your business as a whole in the short term.

[Paint and Air Sportz]

I expect $18000 gross profit the first month, and by the end of the year, i should be making $40000 profit per month, after all other overhead (uttilities, taxes, payroll) I can front a good $150,00 for a 10% upfront payment,

[SpencerB]

I expect $18000 gross profit the first month, and by the end of the year, i should be making $40000 profit per month, after all other overhead (uttilities, taxes, payroll) I can front a good $150,00 for a 10% upfront payment,

Ok, you've got capital for a down payment, and you plan to make money by the bundle right off the bat.... I don't think there is much of a quesiton.

At current rates, and with good credit, your mortage will be approx. $8000/mo, so you should have no issues at all.

[Paint and Air Sportz]

Ok, you've got capital for a down payment, and you plan to make money by the bundle right off the bat.... I don't think there is much of a quesiton.

At current rates, and with good credit, your mortage will be approx. $8000/mo, so you should have no issues at all.

Well $8000 a month is alot better then paying $13000 if i was to rent a simmilar building.

[SpencerB]

Well $8000 a month is alot better then paying $13000 if i was to rent a simmilar building.

If you can find me a commercial property for sale @ $1.5m which rents for $13,000, i'll give you a HEFTY finders fee.

That sort of CAP rate is unheard of these days.

Where are you located?

[Paint and Air Sportz]

its just an open warehouse, 11000sqft, $14 a foot. Pretty much what the building im looking at is.

Im in westchester NY, a pretty costy area.

[SpencerB]

its just an open warehouse, 11000sqft, $14 a foot. Pretty much what the building im looking at is.

Im in westchester NY, a pretty costy area.

Well, this obviously makes sense to buy. Actually, what makes the most sense is to buy one for your business, and then buy 5 more similar properties, rent them out and be net $30,000/month...

Good luck with your venture. Paintball is one hell of a fun sport.

[Mikey1205]

Your talking big bucks here and will you be able to qualify yourself for a loan that big?