iFindProperty has helped residential property investors to buy value-add, off-plan and cashflow investments around New Zealand via our
buyers agency services for 15 years. Since the Labour Government removed tax-deductibility for residential property investors, more and more
we have been asked to help investors transition to having some commercial property in their portfolios.
Commerical property is a different proposition to residential, and many investors, while keen to make a move, are nervous about jumping
into something new. Our client was no different and today we share our process that started with "help I don't know where to
start", and finished with a much more savvy purchaser landing two deals that perfectly fit his goals.
Our client had built up and sold a business and wanted to invest the proceeds in commercial real estate. His goal was not so much adding
value and creating equity, he had achieved that outside of real estate. He wanted to put his hard-won capital to work to generate a passive
A successful businessman, he realized he didn’t know where to start and saw value in hiring an expert to assist with such a major
Peter Ambrose has been investing in property since the 1990's and for many years has been both a property and business coach. He is an
expert at helping investors to both define their strategy and follow the steps needed to secure a deal.
Defining the Goalposts
There are many different types of commercial property, so my first steps were to coach him through that and see what would fit his
goals, risk appetite and budget. The budget he had in mind was about $5,000,000 total spend.
After discussing the pros and cons of various approaches, we decided on the following:
Must be a stand-alone building to control land
Wanted "turn-key" because he is time-poor
Must be industrial or warehousing
Happy with 1 or more buildings
Open to anywhere in New Zealand and the engagement would include travel costs
There was some initial education explaining what we/he/his team would do through the search and due diligence, and to make sure he had the
right people there to support him. However, most of the learning was done while looking at actual properties, leases, numbers, and
conducting due diligence.
Peter looked at many properties and some he was able to discard straight away. Others we reviewed in more depth, including
reviewing the building, the tenants, the NBS details, insurance, LIM, the lease and other areas.
From there we made some recommendations for the client’s own team to follow up – so legal, accounting, valuations etc). The key
realization for a buyer is every deal is different, and depending on what information is available, the due diligence required on our part
is different too.
Part of my onboarding process is to help the buyer work out what is important and where their trade-offs were, so we could move
We analysed a lot of properties and were unsuccessful with two tenders before our successful purchases. We missed out on some otherwise
great properties because Peter had discussed with the client what was fair value, so the client could confidently stick to their
guns on price. This built up the trust we needed to eventually land the properties that we did.
The client had started the search looking for one property, however we eventually secured two deals that worked well in combination.
Property #1 was a national tenant and a near-new building rated at 100% NBS in Hastings. There was some concern that the tenant might vacate
in future as their business may outgrow the property so a lot of our DD was in evaluating the risk in securing another tenant, which was low
as it is an excellent property in a high-demand area with virtually no vacancies. We originally were the highest offer but the vendor wanted
slightly more and kept the property on the market. We kept in touch with the agent and when the vendors softened we also moved quickly,
increased our offer up slightly and were successful.
Property #2 is an older building in Palmerston North with a lower NBS %. The tenant had invested extensively in the fitout for their
business and is happy with the location. The low NBS means it was harder for non-cash buyers to fund and that plus the lease meant the yield
on offer was higher and we secured this deal at a 7% net yield.
During our due diligence on the lease, we identified an issue and included a variation to lease agreement being done by the vendor as a
condition of sale. Happy buyer, happy seller.
The client secured two great buildings as part of a portfolio. One is a great building with some tenant risk and the other a great tenant
with some building risk. The very happy client has plans in place to improve the properties and is now free to focus on their future
projects and opportunities.
Total property spend $4,500,000 (excluding acquisition costs)
Net lease with annual rent roll of $276,000
Net return 6.13%, with tenant paying most expenses this compares very favorably with residential
A financially viable pathway to increase the NBS in the second property
Built in rent increases
Interest deductibility not a factor
I had a goal of purchasing 1 or 2 commercial properties as a long-term investment. Commercial property was an area I was very interested in, but I run a business and lack the time to gain expertise, and to make the ‘next step’ of putting an offer on. A big concern I had was that being time poor, I would make a rushed and poor decision, bid too little, or bid too much.
iFindProperty were fantastic. I was able to outsource the ‘leg work’, while at the same time getting expert guidance over the entire process. I made a number of new contacts and developed a level of understanding I could never have gained from reading books and attending courses.
Working one on one with Peter Ambrose was a real opportunity and also very enjoyable. It took around 6 months to finalise a deal, but I am comfortable my goals are reached. The financial investment in iFindProperty's buyers agency service was logistically and financially well worthwhile.
Work with iFindProperty to Source a Commercial Property
Commerical property buyers agency is now available to a limited number of clients. Like our residential service, we prefer to work
with just a few clients at one time in order to focus on you and make sure we get a result in the target timeframe.
Commercial could be a very good option for investors who have built up capital in other areas, perhaps residential property, and now want to
turn that into a much higher income.
The process to engage with us in this capacity is:
Book a call with Peter and discuss what you are looking
to do, your budget and the criteria you have identified.
If we are the right fit for you, discuss with your accountant, lawyer and broker to make sure your team is ready. We can introduce
professionals to work with you as needed.
We prepare a buyers agency agreement and complete ID checks.
You will learn about commercial investing through working with us, both during the onboarding process and during the search and due
Once all signed we start searching for, and introducing properties.
Commercial Property Mailing List
From time to time we will share news and case studies with a commercial property mailing list. Join it here.
It's not just about finding a deal, to truly grow as an investor you need to plan towards your end portfolio and work with people who can help you move towards that vision. iFindProperty has a service that achieves that for clients, and we are excited to share it with you
As an accountant is not a place for my personal political opinions, but professionally speaking I’m pleased with this result, and cautiously
optimistic we might have a friendlier tax environment for the property sector for at least a few years. But what does this mean for property