How to analyze a deal for an office space

[Dharmesh B.]

Hi,

I came across a 2200 sq ft office space listed for $400k.

It would be our first RE investment. Wondering how to analyze this deal. Here’s what I’m thinking

- Calculate commercial loan terms

- Add operating expenses

- Add any fixes

For income, calculate annual income based on local lease rates (broker mentioned they are $15-16/sq ft /year).

Figure out cash flow, cash on cash, etc.

Is this the right way or am I missing something?

Please advise.

Best,

Dharmesh