Looking at a deal

[Anthony Larson]

249900 8 units

3 @ 375
1 @ 400
2 @ 450
1 @ 475
1 @ 650

42600/12= 3550
3550 * .5= 1775

20 down at 6.5% payments are 1330
cash flow per door 55.63

been on market from early 2007 and has been lowered in price from 279900 completely renovated no capital expenditure(I would varify this)

BUT property is out of town owner and I think I could get better terms than crappy conventional financing and/or lower purchase price

[Jim Wineinger]

Forget about downpayment, use full purchase price to properly calculate the deal as this includes the cost of money.

That makes your payments for 249.9 @6.5 to be 1580. leaving you only 195 flow for 8 doors which is a little less than 25 dollars per door.

That is a little low, so I would get that purchase price down a bit. But that can be improved with time so I would not count it out.

But do not forget about the capital outlay in addition to the purchase price. Closing fees, recording fees, realtors fees, ect. As well as verifying his claim of no capital outlay.

Since he claims no capital outlay I would challange him to pay all those closing costs and fees, especially if it seems that your deal (at full cost) will have so little room for any error. Dont forget about a complete inspection with him having to pay (or reduce purchase price) for all items found in need of repair.