Posted by Bill K. (AZ) on November 29, 1999 at 15:30:54:
Michael,
Contact a Realtor who can give you comps for the neighborhood. That should give you a good idea of the value for the property. In addition, ask the Realtor to give you their professional opinion on the neighborhood. If the area is declining, then you need to make sure, should you decide to proceed with this purchase, that you will have a “significant” positive cash flow from this property. You may have large maintenance expenses for such a property. I would figure 40-50% of gross income. Finally, see if the current owner will provide proof of the vacancy rates and expenses incurred for the past few years.
Perform your “due diligence” as you proceed, and you’ll feel comfortable about making the right decision.
You might get more responses by posting this question on “Newsgroup”.
I hope this helps.
Bill K. (AZ)