How to calculate asking price if expenses are higher than 50%

[Taylor Green]

Hi, I'm trying to figure out how much of a discount I should ask for if the expenses run higher than 50% of gross rent. For example 60% of gross rent... Does that mean I should walk away from the property or just change the asking price? I can't figure out how much I would offer! Thanks for the help...

[Joel Owens]

I deal in larger apartment buildings where the impact on numbers is stronger than a 4 unit.

The 60% does not include electric. I will get owners and listing brokers saying that I am conservative even more so than the bankers. I really do not care about their statements as the listing brokers many have never owned a building and are just trying to sell and the seller is trying to dupe a buyer showing minimal costs.

It's all about buying right. If you buy right going in almost everything else will work itself out for the better. If you buy wrong you are trying to push a big boulder up a hill and many times the boulder gets to heavy and will run you over.