Commercial property analysis

[Neil Chohan]

Hello Guys,

I have a big question and would love to hear advice from some of the seasoned investors in multi family properties with retail space.

I have the opportunity to purchase a multi it has 5 apartments and 1 retail space. it is all full with $4875 per month gross. The retail tenant is the acting property manager who takes 250$ per month. Annual expenses is 23,081.88 including the PM fees. The property is in a small town of 5000 people, The property is being sold for 369,000 and the seller is willing to self finance for 5 years with 25k down, he wants 6.5% interest but I can talk him down to 5%. This will mean my monthly payment will be 2000 for the mortgage. I did some base calculations for the cash flow and it appears to be cash flow positive of approx $1000 per month. The seller said he has not been to the property in 6 months and it appears to be passive.

My question to BP community is, what questions should I be asking him? what should I look for when analyzing this property? If this was you what T's do you need to cross and I's you need to dot. This will be my first multi and I am excited to get into investing and rental properties.

Neil