Posted by GL(ON) on July 02, 2002 at 19:43:22:
Your information is a little vague. Do you know exactly how much rent they are getting for each apartment right now? Do you know how much the expenses are?
Apartments are a numbers business, after all this is an investment.
2 bed and 1 bed apartments are not as popular as 3 beds but you may still be OK if you can get quality tenants. This is possible if the neighborhood is decent and you keep the place in good repair. However it is always going to be a bit more hassle than a nicer place.
The upside is that you should make more money (cashflow) than a more expensive place.
From what you have told me it is worth looking into. Do you know how much repair is needed?
I would be thinking of an offer under $50,000 with the vendor to hold a mortgage for most or all of it.
If they won’t go for that, get a new mortgage, give them the cash, and ask them to hold a second.
If the bank won’t loan money on the place, don’t be discouraged. It means they will have to take back a mortgage if they ever want to sell it.
But make sure it is the condition of the house not the neighborhood, because after you fix it up you will want to mortgage it, if not right away then when you sell.