@Edward - Absolutely, networking and word of mouth is worth it's weight in gold!

Read blogs, post questions, and the podcasts are gold!

Read blogs, post questions, and the podcasts are gold!

You could rehab 502 sf, and then plate all the surfaces with gold leaf, and still be under $300k.That seller needs a realtor.

The exceptions are historical value, intrinsic value (for example, it you built using solid gold fixtures) or some other value the building or land possesses over and above the income it generates.In terms of measuring the value of the income stream, there re lots of compliicated ways to determine that, but it all boils down to these two formulas:Net Operating Income (NOI) = Gross Income - Costs/ExpensesValue = NOI / Cap RateSome very, very, very generalized assumptions you can make for a first pass analysis are:- Costs/expenses are between 40-60% of gross income- Cap Rates are between 8-12% in many parts of the countryUsing those two very gross assumptions, and using your income number of $125K, the value of the building will likely fall somewhere between about $500K and $1M.It's unlikely -- given the info you've provided -- that it would be worth the $1.2M you'd be spending.

It almost feels like we are the last miners in the gold rush to show up. 

Those retirement benefits are worth their weight in gold.

I'm very familiar with the Gold Coast area and plan on working there soon.

Your borrowers should pay for all of this, by the way.And yes, you absolutely should be asking what the money will be used for.It's called the Golden Rule: "Those who have the gold make the rules."

Understanding those costs and the people that do the work = gold.