Running numbers for a deal
I’m currently in escrow for a duplex in Chicago. The building has a finished basement that is currently being utilized as an illegal 3rd unit and the tenant is not a guarantee long term. When running the numbers, should I use the rental income from the illegal unit or only go with the income from the other 2 units? The property cash flows at the current selling price with the illegal unit included but the price would have to significantly drop without the 3rd unit. Also, the property has 2 open lots that can be sold separately once the deal is finalized. I would make a significant amount off the lots but the building would be a struggle to cash flow and has it own issues. Thoughts?