Mixed Use Deal?

[Justin Biggs]

I'm working with Jerry Puckett on a yellow letter campaign targeting SFH absentee owners.

One caller had a SFH I wasn't really interested in but has a mixed use building he is selling that I am interested in. I'm going to look at it this weekend. I've only owned SFH rentals so far and am not quite sure how to value this / what questions to ask this weekend.

Here is what I know:

Asking Price: $200k (this is listed with realtor.  Originally listed for $299k, current list is $239k but he told me he would take $200k).

Rents: 6 1BR/1BA apartments up @ $400/ea.  3 commercial spaces down (all used by 1 biz) @ $1200/mo.  Total rents $3600/mo.  Building currently 100% occupied.

Expenses: Owner pays all utilities for apartments.  He is getting some numbers together.

My Analysis: $3600/mo - $1800 (est. expenses) = $1800.  I can get a 15yr fixed on this @ 4.95% with no points ($1200 payment).  $1800-$1200 = $600/mo cashflow.

Questions: How are mixed use building generally valued?  I'm a little concerned about 1/1 apartments being very transient.  What other questions should I ask this weekend?