High cap rate, not so great location. Advices needed

[Xi Guo]

Hello all,

I would love to hear everyone's opinion on situations like this, since I am still figuring out what my level of tolerability is for deals.

Have a potential deal with high cap rate (20%) triplex. Each tenant with recently renewed one year lease. However the neighborhood is supposedly one of the worst in the city. I drove by twice on Saturday during the day and night. 

Day: fairly lively since its weekend, kids are playing outside, saw a few grown men shirtless, walking around. Several vacant units in the neighborhood.

Night: fairly quiet overall

Another issue was that I was able to visit 1 of the 3 unit, it was poor maintained by the tenant. excessive trash & foul smell

I am thinking about speaking with a local property manager for their opinion, I would love to hear everyone's thought here.

[Bryan C.]

Many will tell you to stay away from property in a poor location because your Cashflow will get eaten alive by tenant turnover, property damage, vandalism etc.  However, there are plenty of ways to make money buying such cheap property...it depends on who you ask but starting out I suggest going for an easier location to deal with and after  gaining some experience then toy with a more "challenging" area.