Property Description:2 building 9 unit apartment complex located in a downtown area of a Midwest city with inter-state, water, and rail transportation systems in place.The building is about 40 years old, but has been maintained very well.Building is 11750 Square footThe lot size is 16350 square footNew roofUpdated interiorhard wood floors, crown molding, and French doors.Units: 5 3 br, 3 2 br, and 1 1 brGross annual rent $55620, 1 3 br is vacant, rent would be $750 per month.Asking price $400,000.00Seller agent claims NOI is $43200 per year, with taking in to account the one vacant unitSo, if NOI is correct, the cap rate would be10.8.Using the 50% rule the cap rate would be 6.95.Assuming the complex was full, the cap rate, 8.08.Not sure who pays the utilities, I am still waiting for the seller's agent to send me more info.Cash flow:Gross rent $55620.00 with current vacancy.Expenses 50% rule $27810.00Per unit $257.50 per monthNOI $27810.00Seller is willing to finance 80% at 7.5% over 30 years with a balloon payment in 5.P&I $26849.88Leaves $960.12Or $8.89 per unit per monthNow, I am just getting started, so I have exactly no cash to put in to a deal, unfortunately.Assuming similar terms for a loan for a 20% down payment, but with a 9% interest, that would be a payment of$643.70Per unit $71.52Net cash per unit of $-62.63At the asking price of $400K, I think this property is over priced.

I'm working on a lease option deal and have a few questions on the details.Insurance: I assume the seller maintains the homeowners insurance and the tenant buyer has renters insurance?

It provides liability protection if you maintain it properly.I think a LLC is the safe way to go for you guys.

The NC Secretary of State maintains the forms necessary for the merger.

This takes quite a bit of time to setup and maintain, but I for one can tell you that the time investment has been well worth the payout.Curt, I agree 100% about your comments about putting together a system for your buyers.

I often end up needing to go to Home Depot because they tend to maintain a good stock and seem to have the items I'm looking for.

The kids would continue to experience the value of a charitable service way of life while maintaining the assets that will eventually provide for their comfortable retirement.Answer #2-- If the lottery proceeds were received before the launch of my first business plan mentioned above, I'd use the lottery proceeds as "seed money" for the business plan which would, in time, cycle back to Answer #1.

It's all back now plus more, but that hit added a year or two to a significant goal I was on target to achieve by 2013.Indeed, double digit growth will be hard to maintain as net worth increases.

Are you an advocate of concentration to grow wealth and diversification to maintain it?

Let me break this down into a few parts:Roof, Parking Lot, Building Structure - generally, while the Landlord is responsible for actually maintaining these items, the COST of maintaining these items AND the COST of replacing these are put back into the CAM charges, and are not really an expense to the Landlord.