Seems to me like almost every field a guru needs to build up satisfied customers that spread their merits.

At a certain point your cash/equity will be generating 100% of the cash flow turning the property into a liability.At a opportunity value of 10% every 100K in equity draws $866 off the top of your rental income before any other deductions.Like Jason I do not invest in any property that can not produce positive cash flow on it's own merit.

Of course CAP is the ratio of NOI / Market Price.As a metric, it's marginally informative - and only as valid as the methodology used to arrive at the NOI - and of even less merit when evaluating residential real estate.You would not base a purchase decision on NIM or CAP - I would look carefully at the free cash flow and return of the business, along with it's potential for growth (and the cost of realizing that growth).  

As long as you old the asset for a long enough time, or simply 1031 out of it into the next asset, it should still make sense to run the study.Going commercial will require more capital so deal syndication may be necessary for smaller individual investors to execute but I think there's merit to the overall strategy.Anyone else who has weathered multiple cycles care to chime in? 

The seller now asks if the seller may ignore the original contract from this buyer, and list the property.Seller’s attorney cautions that if the seller tries to sell the property to another buyer, the seller runs the risk of a lawsuit, which, regardless of the merit, would be time consuming and costly to the seller.

Perhaps not, but people do all the time - whether that nest egg is a retirement plan, after-tax savings, equity in their home, or family money.My point, I suppose, is that while pointing out that starting your own business is risky has merit, extrapolating that to say the ROBS plan in and of itself is risky is a stretch.  

Suggest you use search to find the other posts, too.To start, you must filter and prioritize those properties which have greatest potential and merit.

Cheers...Thanks for the advice Brent,I agree with your 70% value statement, however you don't know some of the particulars on this deal and as a buy and hold it stands on its own merits here in Phoenix.

Have you determined that the opportunity has merit? 

Your initial numbers look quite solid, certainly good enough to merit a couple of days of more intensive due diligence.