Need help with deal analysis

5 Replies

Hey guys. I'm looking for some feedback on how to approach a deal here. I'm looking at a fixer-upper sitting on 21 acres in a hot area just outside of my city. The homeowner wants 300K. The house is 1500sqft, the county says the land is worth 258K with the whole plot being 360K. The kicker is a cell tower with a 50yr lease bringing in $794/mo with 10% increases every 5yrs out back, but unseen from the house. There's just a lot of things going on here and I'm having trouble with how to put all these pieces together to figure out the actual value here.

Are you trying to figure out what you should/could pay for it? Try to get some details on taxes, and what would the property rent for, if that is your intention.

not knowing what your goals are or plans for the property it is tough to get into the weeds on this deal. For me the numbers would not work. At the very basic level this does not meet the 1% rule personally I think you could find a much better return on that money. Just my 2 cents and your goals and threshold may be different so let’s see what other people have to say. 

YeahI thought about that 1% rule. I would like to flip the property and subdivide the rest of the land, but hold onto the land with the tower on it. Even so, how would you begin to Value the income stream from the tower? Especially since it has the 15% raises every five years. Would I just use a cap rate?