Please rate this 3 unit commercial deal

[Nino P.]

Hello friends, I am currently working on a deal directly with the seller that seems to have potential but also a big red flag. Hoping for some sound feedback. I apologize in advance if I ramble, trying to provide as much information as possible. Located at the corner of where I currently own a double. "B" area LP 160,000 3 unit commercial property 2 apartments upper (rented currently 1,350) 1 large storefront lower vacant I plan to use the large storefront for my business and possibly rent to myself at an inflated rate for refi purposes in the future. (Input about that specifically encouraged) The current owner has a private mortgage with original seller whom he owes 115,000. I can takeover those payments in addition to paying the current owner the difference of 160,000. No bank, no realtor. I love the building and the location but Im not sure these numbers are favorable. The big red flag here is that the taxes total out to be 10,000 a year. I believe it's because the current owner paid 200,000 for the building somewhat recently. Is it possible to lower that tax burden? We will be showing a purchase price of 115,000. Downstairs storefront without me renting to myself would command 1,500-2,000 per month. There is also opportunity to add value to the property. I look forward to any advice, cheers.

[Haseeb Awan]

You might be able to get away with charging a bit of higher rent but remember appraiser works for bank even though you might pay him. He will look into prevailing rents in the area & then appraise accordingly. Charging a higher rate might hurt your balance sheet. Self employed already have red flags while getting financing and this might hurt it further. I strongly discourage any one in misrepresenting. 

You can appeal against higher tax and probably can get a tax deduction but see if it's worth it. 
For taking over the mortgage, generally lenders have a rule of asking for the remaining amount upon sale. This clause is generally not exercised but it's good to check with the lender to be on safe side. Also check how long is the renewal term.