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Old 07-31-2019, 05:35 PM
 
1 posts, read 447 times
Reputation: 10

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We've owned a small business (tattoo studio) for 4 years in CA, but will be relocating to FL in 3 months and open a studio there. We found the perfect retail space, and now we're being asked to jump through so many hoops to even be 'considered'. We were just so spoiled by our former landlord, that they didn't really ask for 'financials' other than our credit report. But I'm taking every punch that's throw at me right now, and I understand it's standard practice. Can't help but be afraid that it's not going to work. For those who are able to advise, do you think we'd be considered?

Monthly Rent: $3341/monthly, 1200 sq ft
First Month/Security Deposit: (due at signing) $10,067.00

Our wage & income from the IRS reports that we made: $414,000 in 2018, and $397,000 in 2017.
Our bank account currently has about $101,000.
Credit Score: 815

We anticipate on spending about $65,000 in start-up costs total. Nerve-wrecking, but staying positive. We literally just recovered from feeling this anxiety/panic when we purchased our first home 2 months ago
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Old 08-01-2019, 02:11 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
25,544 posts, read 43,295,876 times
Reputation: 28469
As a commercial building owner. \\\ It's expected we must do very cautious due diligence.

1) Previous earnings do not guarantee future results (especially in your business which is very client / artist / referral dependent)
2) We do not have access to your previous earnings
3) We do not have access / guarantee of your accts / savings
4) We do not have control over how you run your business.
5) With your significant earnings... I assume you paid cash for your home (I never made over $63k annually in my 47 yrs of work / business ownership.)
6) Try to BUY your OWN future space (I love to sell my commercial props to successful tenants and always advise they get additional tenants to mitigate their monthly obligations.

It is tragic to watch tenants go under when they work so hard. (happens to most) ~ 10 - 20% survive.

Vacancies cost at least 6 months of lost lease, usually 12 months (commercial places stay vacant and take a long time to transition, we prefer they stay leased 10 yrs + to same tenants.

Our friendly bankers are 'johnny-on-the-spot'.
Our loans can be 'called' on demand. (no 30 yr mortgages on commercial properties at fixed rates!)
If you have vacancies or delinquency, Bank will NOT choose to renew @ your existing rate.
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Old 08-01-2019, 04:55 AM
 
Location: The Triad (NC)
30,399 posts, read 67,107,418 times
Reputation: 36024
Quote:
Originally Posted by ngt1189 View Post
We were just so spoiled by our former landlord...
Did that start with a $3300 per month rent obligation too?
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Old 08-01-2019, 06:39 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
32,539 posts, read 59,326,738 times
Reputation: 35681
I'm in commercial/industrial real estate, and you are right, all of that is standard practice. You must have just lucked out with the former landlord. We require minimum 3 months rent for security deposit, and run financials that do seem like jumping through hoops. It's just good business, minimizing the chances of lost revenue from a tenant who fails.
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Old 08-01-2019, 04:15 PM
 
7,048 posts, read 3,185,889 times
Reputation: 21375
Quote:
Originally Posted by ngt1189 View Post
We've owned a small business (tattoo studio) for 4 years in CA, but will be relocating to FL in 3 months and open a studio there. We found the perfect retail space, and now we're being asked to jump through so many hoops to even be 'considered'. We were just so spoiled by our former landlord, that they didn't really ask for 'financials' other than our credit report. But I'm taking every punch that's throw at me right now, and I understand it's standard practice. Can't help but be afraid that it's not going to work. For those who are able to advise, do you think we'd be considered?

Monthly Rent: $3341/monthly, 1200 sq ft
First Month/Security Deposit: (due at signing) $10,067.00

Our wage & income from the IRS reports that we made: $414,000 in 2018, and $397,000 in 2017.
Our bank account currently has about $101,000.
Credit Score: 815

We anticipate on spending about $65,000 in start-up costs total. Nerve-wrecking, but staying positive. We literally just recovered from feeling this anxiety/panic when we purchased our first home 2 months ago

You were incredibly lucky in the other space. This is standard operating procedures in many markets. Florida, with its boom-and-bust economy, creates problems.



If the owner of the building carries a mortgage, the bank has to have all that information to make sure that the building remains a viable credit risk. Otherwise, if you or any other tenant is habitually late with payments, it could create a money trap where the bank sets aside money to pay the mortgage, etc. etc.
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Old 08-01-2019, 10:27 PM
 
654 posts, read 281,285 times
Reputation: 745
There are still plenty of laid-back commercial landlords in Florida. I've signed two leases with no credit check, including my current one.

StealthRabbit...any property that takes 6-12 months to rent is magnificently overpriced. Yes it is. Every time. I'd personally be wary of any space that lasts more than a week on the market. The best deals never need to be advertised.
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Old 08-01-2019, 10:39 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
25,544 posts, read 43,295,876 times
Reputation: 28469
Quote:
Originally Posted by Bumby88 View Post
There are still plenty of laid-back commercial landlords in Florida. I've signed two leases with no credit check, including my current one.

StealthRabbit...any property that takes 6-12 months to rent is magnificently overpriced. Yes it is. Every time. I'd personally be wary of any space that lasts more than a week on the market. The best deals never need to be advertised.
I have seen most 'build-outs' to take 3+ months. I only own in rural America as a community development project, you will find lots of vacant spaces there (several nearby have been vacant for over 20 yrs.) I don't do this for profit, just to help small businesses and communities. Of course those seeking higher returns will own prime properties.

If OP is in a region with 1 week commercial vacancies, he will have to pay a bundle in rents.
And LL can be very picky who occupies the space. (Not likely a new business from Out-of-state, that is solely dependent on 'artsy' talent)
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Old 08-02-2019, 08:18 PM
 
Location: Puna, Hawaii
2,316 posts, read 2,462,442 times
Reputation: 3305
As a former retail and then salon owner/operator myself, I'm curious as to why a tattoo parlor needs 1,200 square feet? I'm guessing its a larger operation with multiple artists working at the same time? Or else it has a retail section? One of the malls we were located in had huge spaces but upon negotiation would only rent the area one needed. For example if it was a 2,000 sq/ft space and the business only needed the front 500 sq/ft, they would rent that out at retail rate and try to rent the back out at a storage rate to somebody else. Don't get a larger area than you absolutely need because it's the rent that kills you.

For what it's worth, nobody asked us for any of that stuff you are referring to. All they cared about is whether or not we could pay the bill. But that was in a different market.

Last edited by terracore; 08-02-2019 at 08:19 PM.. Reason: why does it keep adding several line feeds of whitespace?!
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Old 08-05-2019, 07:16 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
32,539 posts, read 59,326,738 times
Reputation: 35681
I wonder if the management just doesn't want a tattoo parlor there, so is making it more difficult.
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