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Old 07-04-2019, 05:23 PM   #9
CaptainYooh
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Before you start talking to commercial realtors, you should do some homework. I suggest doing a simple reverse pro-forma spreadsheet to determine how much you can actually afford. Remember, cashflow from doing business on your own could be irregular, while lease payments are monthly. I've drafted one out for you using $100,000 annual gross revenue as a guide and some basic assumptions for profitability and costs. It is very simplistic, but it should get you started in the right direction.

The key here is to determine the A-M-C-T amount. After that you can play with three variables at the bottom: space you need, net rent and operating costs to narrow down on how much space you can afford to rent and pay for, so that you can tell your broker exactly what you need and can afford. Using the assumptions in my example, you can afford a 1,450 sq.ft. space at $22/sq.ft. total lease cost. Industrial lease rates are pretty good now. Good luck.

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Last edited by CaptainYooh; 07-04-2019 at 05:25 PM.
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