Should I buy this 4-unit?

Question

Hey BP community! I have an opportunity to buy a 4-unit that is owned by a fellow firefighter's father. He is a veteran REI and has owned this building for 20 years and wants to cash out to buy more real estate out of state.
How should I go about this to figure out if this is going to be a good deal?
There are some long term tenants but the property could use some updates to commandeer higher rent. I have still yet to go look at the property and I’m going to have lunch with the owner to talk and find out more about the property.

I’m good friends and a coworker with the owner’s son and have a good relationship with the owner as an acquaintance.
Any insight on how to navigate this is greatly appreciated!

Thanks, everyone!

I’m good friends and a coworker with the owner’s son and have a good relationship with the owner as an acquaintance. Any insight on how to navigate this is greatly appreciated!

Thanks, everyone!

Andrew Wera · Answer

Thanks for the solid advice, Kalen!

Erika Carter · Answer

Talk more with owner, view property, run numbers and due diligence. Good luck!

Kalen Kosik · Answer

It sounds like you got the inside scoop on a potential good deal! I just did something similar and my biggest piece of advice is maintain full and upfront honesty. Make sure he knows what your expectations are on price, your opinion on repairs, etc, and he has to know that you'll only purchase if it makes good financial sense. Don't ever feel obligated to buy from him because you know him, and don't waver on your fundamentals. Because it's way easier to recover from problems associated with a good purchase than make a terrible purchase right at the start. So just be honest, get all the info, do some research, and make the deal. Being trustworthy and efficient can also lead to other deals from this guy in the future! Every conversation and transaction matter.

Alecia Loveless · Answer

@Andrew Wera I’d recommend having a good conversation with him about it and see what he tells you. Then you will need the numbers, not just the price, but a good list of the expenses too so you can truly evaluate it because you will need to know if it makes financial sense with a loan at todays interest rates.