Posted by Ed Copp (OH) on January 10, 2001 at 14:11:13:
What you are describing is a high risk speculation property. The sellers are setting the priced based on what they think a developer (might) will pay them.
What you need to do is to pencil this deal out for yourself. First you have $52,000 gross income from rents. Now subtract a reasonable amount for the following.
repairs and maintenence
management (Oh you are going to do that yourself, well there is still a cost)
Utilities for common areas if this applies
Debt service, This is interest on the loan or loans that you will need to buy this property.
The gross rents against the sellers price look to me like this deal could easily be a negative cash flow situation, going in. With the only way to turn a profit being to fing a developer (or other buyer) willing to pay more than is being offered now.
It’s your deal, and your pencil… Good Luck.