Posted by Branden Bestgen on May 26, 1999 at 11:18:40:
There are several things you need to find out. Why are they selling? Are there are assumable loans available or will the owners carry financing. The cap rate of 12.47% isn’t bad, but I try to shoot for 14% minimum. What’s the condition of the water & sewer lines? Paved streets in good repair? Do their payroll figures include a manager’s salary? You need to find out what kind of headaches you might inherit so you can make your offer low enough to compensate for that. Ex. non-paying tenants, drug-ville, pet problems, etc. Nothing wrong with problems, just make sure you get paid to solve them.