First time investing in commercial real estate

[Akar Pokhrel]

Please help me determine weather this number makes sense to you guys. Any feedback is much appreciated. 

11k sqft total building 

prime location with walmart anchored 

asking price: $4.7million 

CAP: 6%

100% leased (all NNN lease type)

annual base rent combined: $268k

total expense: $90k

NOI: $281k

lease expires: 2023, 2024, 2026, 2027,2032

my debt services are unknown at this point. What should I expect from my debt services regarding this deal? does this make sense to you all?

[Henry Clark]

Random Thoughts:   

A.  Not following numbers:

Revenue $268

Expenses $90

  Net    $178

NOI $281

B.  11k sqft, NNN; why are expenses $90k so high?

C. Loan $4.7mm; say 75% LTV. Say $3.6mm debt. Say 6%. Annual interest without principal $216,000; again, without principal.

D. Let's use the higher $281k NOI. Say depr $120,000 per year. Tax rate 30%. Interest $216,000. Net Income= $281-$120-216= Loss $56. Add back in 120k depr, then cash flow is $56 loss plus $120k depr= $64k.

E. $64k cash flow is with no Principal payment, no Capex, 100% leased always, no new tenant refurbishments.

With $64k before all of the above, I don't see the $4.7mm price tag.

Recheck my math and assumptions. Otherwise make an offer around $2.5mm; or what your financial objectives say.