Advice On Ohio Property
I am new at commercial real estate and am interested in purchsing an older brick 8 plex in Ohio. The cash flow is great - $26,940 net income p/y and the price is $140,000. It is fully leased with long-term tenants.
This seems like a very nice cash flow.
What are the negatives to this deal and/or what should I look out for?
Thanks,
Stephen
deferred maint
heat & A/C costs
underground or above ground fuel oil tanks
how well the renters pay
economic conditions in the area (Tied to auto)
Are the biggies
The net seems too high for the price. Ask to see the tax returns on the property for the last few years. Does the net include management?
If it is well mantained and the numbers are real, what you need to look out for is someone else grabbing the deal. Where exactly is this located? (Just kidding). You might want to get an offer in with an inspection contingency. I like brick because it lasts, but take a screwdriver and check the mortar- make sure it is still solid. If the mortar has reverted to sand, the building is almost worthless.
Chris
Even with 100% financing at 8% that is still $1300 a month income if the figures are right- not bad at all for a single 140k property.
If the numbers are correct...
Chris