Is 199,000 a good price to pay for a 5 unit?

Asked by Sandra, Chicago, IL Wed Sep 12, 2007

with individual heating and taxes is 5,127 a year and expenses is 5,038?

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5
Gregorio Den…, , San Diego, CA
Wed Feb 15, 2012
Do you have financing for this commercial property and an agent experienced in commercial real estate?
The question came up under "financing" so you should start by speaking to someone in your area that does commercial real estate financing so you are familiar with down payment requirements and can factor in an appropriate interest rate and terms. This isn't a residential property.
0 votes
Chicago Real…, Agent, Chicago, IL
Wed Feb 15, 2012
If you have a buyers agent representing you than he/she should do comparative market analysis for you to provide you with a sense of the market pricing. If you currently do not have an agent representing you, i would be more than happy to assist with your purchase.
Web Reference:  http://www.PlaceForUs.com
0 votes
ian cockburn, Agent, New Orleans, LA
Sun Sep 16, 2007
What is the income?
You need to look at the income versus the expenses.
What does the insurance cost for this building? Deduct this from your gross income also.
Also, how long have the current tenants been in the units?
Look at your competition...are there alot of "for rent" signs in the neighbourhood?
Now look at the condition of the property as follows:
1) Condition of the shell...the roof, walls and exterior grounds
2) Check all the mechanical systems...heating and cooling, hot water heaters...how old are they?
3) Look at the condition of what you may have to replace each time you have a new tenant such as carpets, dishwashers, etc.
Web Reference:  http://www.iansellsnola.com
0 votes
Ruthless, , 60558
Wed Sep 12, 2007
I would look into when and if any building permits had been taken out or if there have been any violations or inspections. Does it have balconies? I'd do a little asking around at the building department.
Ruth
0 votes
The Demarest…, , 60101
Wed Sep 12, 2007
Sandra,

Hello. Without knowing more details, it is difficult to say if $199,000 is a good price. If you are working with a local real estate agent, you could have them pull comparable units to see what they have sold for in the last few months. Some things to consider when trying to determine if this is a good deal may include, but not be limited to: condition of the building and individual units, recent upgrades/renovations/repairs done, rental income per unit, length of time occupants stay/turnover rate of tenants, average cost incurred to maintain the units/building such as gas/electric/water, special assessments if any, and what else is currently for sale similar to the building you are considering to purchase. Best of luck!
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