Is this a good deal?

[Adam Steinberger]

I am looking to buy an old commercial building in a very small town (750 people) and convert into 7 units here are the numbers: $55,000 purchase $100,000 renovation $15,000 hard money interest Property management: 7.5% plus 25% of 1 months rent for each lease renewal annually. Rent: $625 per unit with utilities included ($4375 total) $20,000 annual utilities + lawn care/snow removal $3000 annual cost for turnover and repairs $2000 property taxes Thoughts?

[Israel Garavito]

@Adam Steinberger

Running numbers only the deal makes sense if it fits your investment criteria. That’s your call. Make sure that the “soft” side of the operation makes sense: potential rent, local market and demographics, local crime rate, tenant quality, etc. and make sure to account for reserves.

So accompany the excel calculations with worst, average and best case scenarios. Make the spreadsheet relevant to the real world by understanding the nuances of your local market and modify your underwriting accordingly.

And if it fits your criteria then it’s a good deal.

Good luck!