Posted by Jim Locker on January 15, 2001 at 16:46:09:
I did a doubletake when I saw the annual gross rent you listed for 34 units in low to moderate income neighborhoods. Where are you? I don’t consider $577/mo to be “low income”, but then my area is not a high cost area.
The valuation indicated for the properties is straight slum valuation. The numbers you present here look enormously attractive.
So, I have a couple questions. What kind of shape are these properties in? You are not listing any maintenance costs; what will you be getting into WRT roofs, foundations, plumbing, etc? The numbers you list will easily support these things unless you have to do them all at once, but you need to know what you are looking at.
Second, what are the neighborhoods like? War zones? If so, are you willing to deal with that kind of tenant? You know, I hope, that if the neighborhoods are war zones you will NOT get good tenants.
You say you have been an investor for one week. If you are looking at a war zone, you had better think real hard about it. That kind of tenant wears down the toughest of us, and you must not neglect the physical danger that you yourself might encounter.
If this woman is willing to part with these properties for this kind of price, there is something very unattractive about them. Make sure you find out what it is.
I think you are preparing to take a very big bite - possibly too big for a beginner. Make sure you do your due diligence, and good luck to you.