Considering buying 0% commercial property

[Tony Gutierrez]

Newbie here.

Thinking bout buying a commercial property from the owner that I feel he’s asking too much$800,000.

Rent is $4000 (currently lease )

Is this a bad investment?

Help!

[Benjamin Aaker]

That is not nearly enough information for us to tell you whether it is a bad investment or not. What do you mean when you say it is a 0% investment property? What are your long-term goals? Are there any value-adds you plan on doing? Is he financing the deal at 0%? How many payments will there be? How much are you putting down?
If this is a conventional mortgage then you will be underwater and it is a bad deal.

[Tony Gutierrez]

Here’s the information

$800,000 commercial property
no down payment 

30 year contract at 7% percent fixed.

Mortgage is$5,700

There’s a small vacant space on the back that you can possibly build a mechanic shop bay on and make some additional income maybe about $2,000 a month.On the front of the property their is a small building that has a restaurant and they pay rent $4,000 a month. 

I did my research at the county records and it’s showing value at 400k-500k but because he’s not asking for a down payment he’s asking for that amount.

[Josh C.]

“Is this a bad investment”

Yes.

Unless you see path with very little out of pocket to double rents in 12 months this is a terrible investment. It’s not 0%. It’s negative.