I own a mortgage company now that does both residential and commercial finance, but I spent years as a commercial banker with both big banks (First Union/Wachovia) and 2 community banks.

Since the original loan remains in the seller’s name, you may need a nominee interest allocation to deduct mortgage interest, as the Form 1098 will likely be issued to the seller.

The seller also has a mortgage on the property.

I am unsure how to accurately predict rates and occupancy.

Like our other class B shares (we also invested in Praxis), they stopped paying out pretty quick when the interest rates when up.

Assuming that your taxes and insurance are around $500 and your mortgage was $1,000 per month - even if you got a rate around 7-7.5% and had no money down I do nto see this property cashflowing.

Year over year we've seen impressive appreciation rates and often times investors are able to re-sell at a profit a year later with minimal to no work.

If it was due to a natural disaster they cannot raise your rates.

Rates will at some point allow you to refinance.  

With today's high interest rates, it usually doesn't make sense.