Commercial zoned residential triplex
I'm questioning a purchase on a 3 unit building in southern Maine , east...only coiuple miles from ocean. Nice area, great school system... the building in on a main road , nice exposure...based on a 25K reduction in offer price ( 4% ) , turning the heat/hot water over to the tenants on 2 of the units ( 3rd unit pays heat/hot water) & raising two of the tenants' rents up by $50 each ( 4% ) ....
I can get a 9.5 ROI , cash flow 0f $989/month , 5 year annualized return @ 19% , with 2% appreciation & mortgage pay down... get equity of @ 250K after 5 years ( 43% of cost base of building...
The value ( I believe ) is that its a commercial zoned building that can always be converted back or have a selling value 'down the road' for interested buyers for commercial at a later time....in the mean time , the residential purpose suits it just fine.
Your thoughts are very much valued
Thanks, Steve