Fair Market Value

CandleStick said: "Anyone know a simple way to figure fair market value of a commercial rental property? It is a four unit apartment building, each leasing at 450.00 per unit. the asking price of the building is 225,000.00. It is fully paid for by the owner and only 2 years old. Great condition. I think he is asking way over fair market value.."

thezster said: "Are you asking if it's a good deal? Or if it's a fair market value? Fair market value will depend entirely on the location/condition of the unit. Have your realtor pull up "comps"... to see how this one is priced compared to similar units in the area. Fair market value will vary greatly region by region..... and sometimes neighborhood by neighborhood..... In my area.... that type of deal would be great! Your payments would be less than $1000/month.... and easily covered by two of your tenants....."

CandleStick said: "thanks zster, you are right, ultimately I am trying to find out if it is a good deal. By knowing the FMV, I would know if his asking price is a good deal. Actually the FMV is very difficult to determine in my area, even for appraisers. There really is nothing in the area to compare it to. It’s a lake area that developed eclectically. I do not know how to figure the payments as you did, but I was guessing around 2500.00. I may be guessing completely wrong. That’s means I will need a 650.00 payment from each unit to break it even and the people of that area cannot pay that. I just want to make sure there is a positive cash flow from the renters after the mortgage payment and other cost such as insurance, landscaping, repairs etc."

thezster said: "Go to realtors.com.... on the site is a easy to use tool to figure your payment on any principle and at any rate..... On your "project" with 20% down (minimum as it's investment property)....your payment should be ballpark $1000.......... (I pay 1500 on a 300,000 mortgage)."