Updated over 10 years ago on . Most recent reply
When to walk away from a deal (poor current condition of property exteriors)
Looking at a package deal of 5 properties (4 duplexes and a triplex) this week in Ohio. Had a family member do a drive by this morning and says exterior of the properties look rough and not well kept.
Question I have for you is when looking at a new investment- how much attention do you pay to the properties current condition. If property looks poorly kept do you pass or estimate the cost of upgrades/ repairs/ improvements? Current owner has had properties for 15-20 years.
I've only looked at the financials so far and they make all kinds of sense- about $25k per door to purchase and average of $188/ month net cash flow per door (after mortgage, insurance, taxes, etc). Have also factored in 60k for improvements.
My thought process is that improvements could cover some of the big ticket items + improving curb appeal enabling me to raise rents 5-10% and exceed my 70% ARV target. Seems like a good deal to me, but I'm concerned that lack of upkeep could mean bigger issues below the surface.
What do you think?