I am buying my first mixed use property where first floor is commercial and second floor is a 4 bedroom. The seller bought the property last year for 80k and selling now for 130k with out providing a sellers disclosure or profit and loss statement. They state the rents go for $1200 a month for commercial (on a 3 year lease) and another $1000 for the apartment upstairs which is vacant. They are selling it because they are out of state investors who are in over there heads. My concern is they don’t have profit or loss statements for the property, can’t provide me with sellers disclosure and is in a bad part of town. What more should I look for from them before I get my own inspectors to check it out
First off, it is in a bad part of town. Second, in commercial you would get the T-12 during your due diligence and not before it was under contract. If they cant provide you with this, they are lying about the numbers or are so incompetent that I wouldnt want to deal with them and would walk away. I would be asking for proof of deposits for the $1200 and a K1 from last year. I would also tell you that the vacant part rents for $0 because there isnt anyone in there. If you can realistically predict yourself the rent then so be it, but until it is actually rented then you could make up any number you want as the seller.
This is only a good deal if you can prove the $1200 a month is real and being paid and will continue to do so and there arent any major capital expenditures looming. My gut tells me to walk away from this but I only have the paragraph of info you posted.
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