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Updated almost 15 years ago,
How much would you pay for this building?
Hello all,
OK so it's a 8 unit building with 6 3br units and one 2 bd and 1 bd each. The rent is as follows:
Six 3 brds - $825/each (tenant pay their own utilities)
2 bd - $650 (tenant pay the utilities)
1 bd - $700 (owner pays the utilities)
Total rent of $6,300/mo
The taxes are $6,500 for 2009. The property is on a main street. The property is in decent part of the town. The seller is asking $650,000 for the property. I am looking at the property tomorrow, but from the pictures, it looks in decent shape.
Can I use the 50% and 2% rule on a commercial property? If yes, using 2% I get a purchase price of $315,000. I looked up the property's info on Lexis Nexis, and it shows that the seller has a loan of $360k against the building. But on the county's website, it shows assessed value of $167,200. The appraisal is as of Feb. 2008. If anything, the assessed value is even less. I am little confused as to why these amounts are so off.
What would you guys offer for this property?