All Forum Posts by: Joe Gleason

Sanity check please..

Six-unit apartment building, 2@2bdrm, 4@1bdrm.
Asking price is $299,000.
Gross Income is $55,200
Expenses $27,600 (50% rule) stated expenses actually $20k
NOI $27,600

Figured on offering 275k, 5% down payment. Finance $262k 30yr @ 8% = $23k annual payments. Positive cash flow $4,600 annually.

Building is in good condition, new roof two years ago. Area of town is good, corner lot next to city park.

Good, bad, in between?

Yep, it is a FSBO. Same family has owned the property since 1967. They closed the theatre in 2001 due to illness. The rest of the operation seems in ok shape, stable tenants in the stores. Apartment tenants are mostly 20-somethings, working class.

Lots of stories in the local newspaper about the desire to open the theatre, no one is stepping up though.

I'd like to thank everyone for the very helpful information provided. I just got off the phone with the owner and the news is not good. She is unwilling to budge from her asking price. I'll keep an eye on the property, I don't think it will move the way she has priced it.

Good questions Dominic! The theatre income is not included in the projections. Owner included it at $78k annual but I took it out to run my calculations. If i can get it open and generating income that would be great but I am not counting on it at all to make this deal.

Apartments are owner managed and I would take that over myself. I did project 3% of gross income as a property management expense.

Yep, seller financing with very good terms would be great, I'd like to keep as much in my pocket as possible. To some degree, the price can go up if my debt service costs go down. If I can go into the deal with a decent positive cash flow then I would be happy. It would allow me to do what i truly love, working in theatre. I'm not crazy though and would definitely keep the day job!

:mrgreen: $100 a month, that would work for me. I think the 1.25 price is about right for the property, minus the theatre. Of course splitting the theatre out of the deal takes away one of my main incentives for having the property. I'll see if the owner will take a second, with very good terms for me of course. Maybe an additional amount to kick in if/when the theatre is able to reopen. Percentage of theatre revenue as an option?

Nope. No property other than my primary residence. If the theatre property I've been looking at doesn't pan out I'll be looking for a multi to start with. Nothing less than 6 units though.

I've been mulling this over for a couple of weeks now. Nothing ventured nothing gained so I'm going to see if the owner will come down to reality and sell for closer to 1.25mil. At that price and with the right financing I'll be cash positive. If the owner isn't willing to consider it then I'll shelve plans for this property.

Hi Chop,

Those rents seem pretty low for NH. What area of the state is that property in? Even with increased rent coming in the best to hope for would be as an owner occupied property. I wouldn't live in a multi-family again though. to used to my house in the country with neighbors well away from me. :)

I think it could be figured out if someone were really interested. The property is the Colonial Theatre in Laconia.

I visited the NHREIA web site just the other day. I may show up at one of their upcoming events. I still have to decide whether my interest is only in a single property with the purpose of having a theatre of my own versus general investing for its own sake.

Hi Chop,
Why, you interested in it? I haven't quite given up on it yet so am reluctant to say where it is just yet. Hope you understand.