First Commercial Poperty For Me... IS THIS A DEAL?

[Charles Kagahastian]

hey everyone,

so i went to go see a property in jersey city, NJ on sat. It was my first walk through with a property. It was an amazing experience for me. But I wanted to run the numbers with some of you guys because I might be too close to the property. I need an objective view :D

Income and Expense Statement 2008
Total from rents $45,118.40
Expenses: Mortgage=$3,261.52
Homeowners Insurance: $4,200.00
Electric Bill: $267.08
Water and Swear Bill: $2,456.00
Heating Oil: Oil City: $2,185.20

Its a 5 unit building coded as an apartment.

This the numbers he sent me. And from what I've been researching the rent average for the area $900-1200.

The owner said he owes $330,000. He said he wants his initial investment of $113,000 back. He bought it in 12/7/2006 and I dont think he put in 113,000 given the amount he's had the prop and how much he still owes. he could have just been inflating his initial investment because he knows we'll shoot low. We are getting his mortgage statement sent to us. Motivation: He lost his job.

He had it appraised in dec of 08 for $550,000. Caps in downtown jersey city are 4-6% because of the big condo conversion boom there. This prop is at 5.9% cap rate with the current NOI and appraised price.

I have 2 buyers lined up who are coming in all cash. What do you think I should offer and what should I sell to buyers for? I was thinking offering $360,000 in hopes of negotiating at somewhere around $380,000 and selling to buyers at $400-425,000. Thanks in advance for any info.

Charles