1.5 Mil Office Building....need Opinions
We are looking at a office building - 6 tenants for 1.5 mil. It is 10K sq ft. The property was last sold in 2002 for 1.2 mil The price may be a bit high, we would probably offer more like 1.3 and go from there. It was built in 1986. Very nice looking brick stucture, well maintained.
Gross Income - $189,209
Operating Expenses - $68,710 (including 34,586 in taxes)
NOI - $120,499
Assuming the 1.5 price....Figuring a 1.2 mil mortgage at 6.5% for 25 years - pmt would be $97,230, but of course we need to come up with 300K for a downpayment.
That leaves a cash flow of $23,269 (10K more if we manage it ourselves)
Cap rate is 8%
One advantage to this property is that there is one vacant office, and our other company would be occupying that space after we purchase.
Any thoughts? Looking at signing a letter of intent soon.
What kind of area is it in?
What class building?
A great tool on this site is the Proforma-nator. It is difficult to find, though.
Here's a link to it directly:
http://comm.thecreativeinvestor.com/modules.php?name=Tools&op=ProForma&FMV=1,500,000&PurPrice=1,200,000
Good Lcuk!