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Updated about 4 years ago,
Leave the deal or stay?
We are under contract to purchase a 4-unit student housing property. The location of the property is A+. We are very disciplined with our investments and we make sure that everything we buy meets the following criteria:
- 1% rule
- 50% rule
- cap rate of > 6%
- Per unit cash flow of at least $250
We put an offer on the building based on financials provide in the offering memorandum. After getting actual financials, cap rate is now <6% and cash flow went from $340/unit to $250/unit.
My questions:
1. would you leave the deal or keep going given the new financial info?
2. Would you lower your offer to get more favorable financial stats?
Thanks in advance!