Need your help on a deal!!! -thanks! - Posted by Ron Crawford II
Posted by Ron Crawford II on July 19, 2001 at 12:40:39:
** Here is a deal that I found out about today. Is this a good deal and if so,
what type of terms should I make in the offer letter?
Thanks in advance for your assistance!!! Here we go.
Pharmacist owns the property, used it for office space. He was
recently hired by CVS as a manager and does not have time to operate
the property any longer. The property has been on the market for about
two years and was recently reduced again. His realestate broker told
him that he will have to “carry paper” since this is what investors
will require. He is willing to carry paper. The details:
1 bedroom unit, 2 bedroom unit, 4 bedroom unit and commercial space. All are fully rented.
Tenants pay their own gas, electric and hot water.
Landlord pays water, sewer and trash
$180k asking, $130k remaining on mortgage
Expenses = $10.2k/yr
NOI = $20.4k/yr
These are the caculcations that I made for a potential offer based on what
I learned in a REI course:
$30,672 (Annual income)
- $ 6,314 (20% ROI from annual income)
x 100 (100 multiplier)
=$159,490 (Price to offer for the property; or offer $160k)