My first serious deal - 9 condo package - analysis advice

[Angie Menegay]

Hi all,

I've been looking into this one particular deal, and the numbers seem fairly great. I'm not sure if it's one of those "too good to be true" instances or it's a legit one. Any advice is greatly appreciated!

(By the way, even though we are already pre-approved for a similar amount for residential purchases, since we'd like to obtain a commercial loan that could help cover all of these 9 condos, we're having to start over with a commercial banker (*SIGH*). That process is not going very fast either... :cry: )

Asking Price: $269,000
Gross Income: $66,282
Net Income: $33,522
Cap Rate: 12.42%

The complex is professionally managed by HOA, so all expenses are easily verifiable (I'm requesting those documents from the seller). It's a nice area, so I expect vacancy to not be more than 10%.

I've spoken to the agent/seller a couple times and he seems to be a genuinely nice person. He's also offering seller financing at 7%, 30 amortization with 5-year baloon, 30% down. I might opt for this route if I can't get any traction with the commercial banker.

Basically I have nothing but all great feelings about this package, and I need someone to perhaps whack me in the head for something I'm missing. I also know that condos are not the greatest RE vehicle in terms of appreciation, but we're content with the equity payoff of this deal.

Thanks in advance!
-AM-