<p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Key Takeaways</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Location for Flex/Industrial</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Don’t go “main &amp; main” in the city core (too expensive, competing with retail/office).</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Target <strong>major highways/arterials just outside town</strong>, where you can serve multiple submarkets at lower land/building cost.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Pricing &amp; Strategy</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Your <strong>all‑in cost/sf (purchase + rehab)</strong> must be well <strong>below new construction cost</strong> (~$120–$150/sf) or the deal won’t compete.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Quick screen: if <strong>all‑in ≈ $100/sf</strong> and you can get <strong>~$12/sf NNN</strong>, that’s about a <strong>12% yield on cost</strong> → worth deeper underwriting.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Kansas City Example Deal</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">4,260 sf building at <strong>$315K (~$74/sf)</strong> in Raytown; concept: <strong>split into two bays</strong>, add another roll‑up door, light rehab.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Verified via <strong>Google Street View</strong> that there’s <strong>no real loading dock</strong> despite the listing.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Underwriting Outputs (base case)</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Assumptions: 25% down, 7% interest, 20‑yr am, 2 tenants at $12/sf NNN, 3% bumps.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Results: <strong>~16–17% IRR</strong>, <strong>~19–20% annualized cash‑on‑cash</strong>, <strong>~2.0x equity multiple</strong> over 5 years, <strong>DSCR ~1.7x</strong>.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Risk &amp; Stress Test</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Even with <strong>rents at $10/sf</strong> and <strong>rehab at $100K</strong>, deal still modeled at <strong>mid‑teens IRR</strong> and solid cash‑on‑cash.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">But in a <strong>bear scenario</strong> (lower rents, higher vacancy, worse exit cap), you can <strong>lose money</strong> → need margin.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;"><strong>Capital Raising</strong></p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Raising capital starts with your <strong>existing network</strong>:</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Call people, explain your <strong>deal type and target returns</strong>, and ask if they’d want to see one.</p><p data-rte-preserve-empty="true" style="white-space:pre-wrap;">Build a <strong>list of soft commitments</strong> before you have a live deal.</p>