How Much Is TOO Much

Comments(9)

• 
  sanjosee16th September, 2006

  if the original deed included mineral rights, those rights would be foreclosed on. I dont see any reason why you cant buy the property from him & have him retain mineral rights if specifically stated in your deed.

• 
  roboxking14th July, 2006

  DId you already deduct the expenses from the yearly income? In order words is that Net Operating Income? effective gross income? potential gross income?

• 
  bdegori14th July, 2006

  Sorry about that.
  
  The 120,000 is gross income

• 
  roboxking14th July, 2006

  How do you know that the income is accurate? and the expenses? What due dillegence have you done?Are you missing any expenses?

• 
  bdegori17th July, 2006

  Thanks for all your input.
  
  The property is a sturdy brick building about 60 years old. The building and house both have new roofs. The plumbing, electric, etc... are all in good shape. New windows throughout the commercial and house.
  
  The commercial leases are 3 yr leases with the residential being yr to yr. Most comm tentants have been there at least seven years except two. The apartments and rooms have long term tenants (3-17 yrs).
  
  Downtown neighborhood in a small town.
  
  Additional maint costs , snow, etc.. add up to about $2000.
  
  Thanks again for the info and I look forward to more!
  
  Brian

• 
  ashwin17th July, 2006

  , I would re check electrical +water cost. especially elctrical cost. I s heating gas heating ? Who pays for heat ? If tenanats pay heat, It seems a good deal. You also want to consider management cost as you may spend money on property management.

• 
  clwebb_com17th July, 2006

  I agree with Ashwin...
  
  but if those numbers are correct for you, only take the deal if your comfortable with a 14% annual income return.
  
  Need to make sure there is not a lot of deferred maint; could eat away your appreciation potential.
  
  Hope this helps,
  CLW[ Edited by clwebb_com on Date 07/17/2006 ]

• 
  bdegori19th July, 2006

  Thanks again for your input!
  
  After reading your responses, what exactly should I be looking for in a percentage of return?
  
  I thought as long as your expenses were paid and you were breaking even it was a good investment.
  
  Am I off base, and if so, how far?
  
  Thanks again
  
  Brian

• 
  iavalos19th September, 2006

  Not sure who Kimander is, but he/she seems to know what he/she is talking about. Maybe this person has accountant experties... Would like to hire Kimander to setup my next big deal or be a mentee.
  
  Good forum!