Apartment complex sliced into several 4-plex's

[Jeremy M.]

New Investor here, thank you in advance for your insight and patience.

I'm casually looking into a few different 4-plex's in the Houston area and several of them seem to have been a part of a large apartment complex at one time. My concerns about this is rental competition (since there's 20 identical units next door) and inability to increase value appreciation (outside) since enhancing the outside of the one 4-plex unit probably won't have much of an effect on the whole complex. (because there will still be 4 other 4-plex's in bad condition). Hope I made sense.

My question is does anyone have any experience with a situation like this? I guess this occurred as a result of a foreclosure on an apartment complex and they sold them off as individual units? Just looking to see if someone will tell me to run away from a deal like this or if I should dig deeper to see if it might be viable. Most of the units are 100% occupied.

[Jon Holdman]

Those are pretty common in our area. In most cases they never were a single complex. They were originally built as investment properties. Fourplexes are easier to finance than anything larger, so by building units this size its easier to sell them to small investors.

If there are some common areas, there may be an HOA. The owners of the fourplexes will have HOA dues to maintain the common area.

If the numbers work I don't see a problem with something like this.