@Samantha Magina
I don't know the Massachusetts market well enough but a simple Google search averages a class B area to be a 5-6% CAP rate which means at a 11m LP, it should produce a NOI of $550,000 to $660,000 per year before debt payment. That being said at 95% occupancy, based on your numbers, it should produce $1,122,000 (55 x $1700 average) annual gross rent. Safely assume 50% expenses (class B generally are less). You're looking at $561,000 NOI before debt payment. People that are saying it is over priced, this would be considered an average return in the Bay Area (though most investors here that are looking at 5-6% CAP rates are buying property cash and not worry about debt service). A 5-6% CAP is typical for a B area. Not sure where you would get a 90% LTV loan on your first commercial deal, but even if you do, you'll be negative cash flowing monthly. All my commercial loans have an average of 25% down at 4.5%-5% over 20 years. If you were to base it off 25% down at 5% over 20 years, which requires a 2.75m down payment, you're looking at a P&I of $54,446+ per month which would still give you a -$7696 per month ($46750-54446). Not much people can absorb a negative cash flow of $7696, actually I don't know anyone that would want to do such a thing, at least not for a long period of time. But if you can get it at a 6% CAP rate range, you are now cash flowing $554 per month on a 2.75m down payment or a return of .24% cash on cash return per yet... Of course, you'll really have to dial in on trailing 12 P&L and tax returns. Typically for any commercial property, I ask for a minimum of 2 years P&L with tax filing to prove it. It's quite possible you can get your expenses down to around 40% and you'll cash flow better.
