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Updated almost 5 years ago,
2 unit commercial property. Should I close?
I am set to close on a 2 unit, new construction commercial property in central Texas on May 1. Option period has ended.
The numbers worked, but then the virus hit...Will we back to work soon? Will I be able to find tenants?
The down payment will be $116,000 if I close. My worry is if I do the deal and don't get the units leased, I will be responsible for a $2960 monthly mortgage + taxes, insurance, CAD etc. Should I move forward with the deal or terminate the contract and lose my $15k earnest money?
Numbers: PP: $579,000RENT: $7500 ($3750 per unit)
Op EX: $3190
tax and insurance: $1200
CAD: $600
property mgmt: $640
vacancy: $750
NOI: $7500-$3190 = $4310
Cash Flow: $4310 NOI - $2960 mortgage = $1350 cash flow
Cash on Cash return: 14.08%