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Updated over 7 years ago,

User Stats

227
Posts
31
Votes
Samson Kay
  • Investor
  • Chicago, IL
31
Votes |
227
Posts

Submitted my first letter of intent on Master lease with option

Samson Kay
  • Investor
  • Chicago, IL
Posted

I'm excited. The seller has already stated that he would entertain a Master lease.

After walking down the property and neighborhood I decided that this was the perfect storm for this strategy! A subrenting building (23 units) with room for rent increases. A motivated out of country investor. A Negatively cash flowing building. A building with only minor cosmetics needed on the interior.

Here are some of the numbers:

Current NOI/Projected NOI = 55000/108405

Expenses = 95,648

Asking Price = 1.05 Million

Market Cap Rate for the area = 12-14%

The asking price is really high considering the negative NOI. But I believe that the seller was using the building to report a loss on his more profitable investments. Which is why he decided to keep the rents so low.

Wish me luck!

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