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.

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