Real Estate Investments

[Beestie]

Well the monthly potential gross income is 10,800 and the interest expense is 7,500 so even if the reductions (vacancy, maintenance, taxes, management, etc.) amount to 30% of PGI, you are still at breakeven cashflow wise not even considering deferred depreciation.

And if you put 25% down you can probably get a "stated-income" or "low-doc" loan where you just tell the lender whatever you want to get the loan. They figure if you are going to risk 400 grand then you'll be diligent about servicing the loan.

From what you have indicated, its an absolute steal. But, do your homework. If the price is substantially less than similar units have traded for in the past, that's a red flag. Also, check to see if there are any environmental problems pushing the price down. Also, check the county master plan to make sure that the unit is not slated for an emminent domain acquisition in the 10-year horizon. You should also review the rent rolls to compare the occupancy duration to similar units and be wary if the average per tenant is more than 20% less than comparables.

I'd retain a commercial real estate agent and submit an offer immediately but allow a generous "due diligence" period which essentially ties up the property while you figure out if its as good as it looks.