Posted by Alex on June 12, 2006 at 24:13:11:
Your concern is very legitimate. However, you have to ask yourself a couple of thing first. Are you buying for cash flow or long term appreciation? If the numbers look good, and you’re buying for cash flow, long term appreciation is not as important. You will not have negative amortization to get positve cash flow, and you found an owner willing to carry paper, something I find rare today. In essence, don’t look a gift horse in the mouth. The building will evolve as the rest of the city will and nobody can predict the future of any given neighborhood, but if you have positive cash flow, are you happy?