Double verification and guidance

[Mario Hernández]

I'm looking at a deal in Mansfield Ohio. This will be my first deal ever, and it will be a residential, commercial property, SFH, storage units, an auto shop, and one large storage unit that a business is operating in. The total cost is 145k and it has 16 cap rate. I understand the general process of purchasing a duplex for example, but being that this is also commercial, I was hoping to get some insight and guidance on this deal. The total gross income is over 2300 so it seems like a great deal, but I just want to be sure would anyone please be able to help me please DM me

[Evan Polaski]

@Mario Hernández

1. Check zoning to confirm all uses are legal on this property.  
2. You will certainly want an environmental phase 1 and given current use, a phase 2.  This alone may be cost prohibitive given the price.  But auto shops, particularly "backyard" shops are generally not the most careful with their used oils, brake parts cleaners, and other nasty chemicals that could be a real issue for your tenants and ultimately, you, the owner.

3. Confirm all rents and estimate expenses.  Mansfield = snow.  I am assuming you are responsible for all snow removal and landscaping.  You have tax bills and insurance (can you even insure this property with the various uses). Maintenance of driveways, given the heavier use due to storage, auto shop and business.  

4. Are you even able to finance this property given the various uses?

5. I view this purely as a cashflow play.  Granted, I don't know this property or the Mansfield market, but I can't imagine there is much room to move rents given the hodge-podge uses on the property, and there are not many buyers that want to buy a single family home that also has storage and autoshop on the same property.  So, assuming the uses are even legal, and the property isn't posing an environmental threat that would require expensive remediation, you have to have your incomes and expenses buttoned down and make sure you are happy with the return you are getting from cash flow alone.