Thoughts on this deal

[Bret Blackburn]

I've got a property in my marketplace that has me a little torn.  It's within a few miles from my home and 2 other rentals.  The area is growing quickly.  The property is going for a little more than what meets my formula and conditions and has multiple offers.  The caveat is that it comes with an extra city lot next door that I could sell or build another rental on. Without the extra lot, I wouldnt consider buying the property. There a few if any lots left in the small town area, much less included with a home purchase.  The home also has tenants if I choose to keep them, (paying a little below market value).  The property will cost me 8-10% more than I'd normally pay. But the value of the extra lot is 2x that. 

[Dave Younts]

I would break the value into two segments: 1) value of the lot, 2) value of the home.  Run the numbers for both and add them together.  The lot has value and is easy to liquidate.  It should be treated separately.