Starbucks is a vice that is widely accepted in today’s society. There’s nothing like a $5 shot of energy to start your day or get you through the 2:30 lull. But what if, instead of spending $5 a day, you could make $77.50 per day from the popular coffee chain?
The average purchase price for a Starbucks property is $2,700,000 and let’s assume, using a good commercial real estate broker, you find one to purchase at a 6.5% cap rate, which equates to an annual rent of about $175,500, or $14,625 per month.
Well, we are actually developing a Starbucks property at this moment, and we were lucky enough to lock in a rate at 2.95% prior to the rate hike, but how can you help improve your returns by getting the best rate?
A major component of your return from real estate investments is the loan paydown. Basically, you are using the tenant to grow your equity in your asset, so each month, the tenant pays you rent and you pay down the loan to increase your position in the property.