I posted a few days ago about a multi family unit I am purchasing (have a 20 day feasibility period, thankfully). I still don't know everything I need to know to make a decision, but I can subtract some details that I thought were great -- peeling back the layers of an onion usually makes you cry!

I thought I was paying $450K for 9 units, knew there were tenant problems and that most would probably have to be kicked out. Average rent in the area is around $1250 per month for town homes. I was planning on $1100 to $1150 after a rehab and repositioning. This property is a mixture of attached town homes and detached homes (all on an acre of land on "main street" in a historic area which is being revitalized). Newer townhomes immediately backing to the property, plus some other newer ones in the area. Not much else in multi family to speak of. Mostly quaint shops, medical and office buildings down "main street".

Here's what I know now after a few days of phone calls and research....

Only 8 units (the 9th one is gone -- fire, explosion, etc...)

Price now $400K (better because one less unit, but still $50k per unit)

Only one tenant is salvageable and I don't know the details of the rent yet (all the remaining tenants are being relocated by seller prior to possession -- this one lease is up in April)

Property is owned by a non profit and is used for housing for people needing a little help (so no income to speak of)

No expenses to speak of (at least for current owner because they are tax exempt and volunteers provide services for repairs when needed)

Electric is not divided (don't know total yet but I would spend the money to separate and have tenants pay)

Property was built in the 50's and remodeled in the 90s (I still haven't seen the inside of the units, but are housing mostly elderly couples that have been there for at least 10 years -- agent says I will be pleasantly surprised -- walking through on Tuesday with my general contractor friend)

Advertised total square footage was pulled from tax records stating about 10,500 sq. ft for living space (so around 1300 per unit... I was actually thinking 1200 on average)..... bad news is that the tax records appear to have some duplicates, and still includes the 9th unit that no longer exists). I think the real square footage is around 7700 (so average 950 per unit -- give or take a little). I can't get $1100 per month for 950 sq. ft -- more like $850 per month -- so there went some of my income.

Agents says there is a mixture of 1, 2 and 3 bedroom. I will know on Tuesday how many of each. I can't imagine a 3 bedroom in 950 sq. ft (I would probably knock out a wall and make a bigger master, if possible)

Possible grants from the city for rehab on the exterior because it is in "old town" on "main street" -- they should have an interest in collecting taxes from a new owner after almost 20 years of an exempt status. I will need to put together a design plan if I decide to do the exterior.

There are 5 attached units (drive up town homes) and 3 stand alone homes

So to recap... no rent, no expenses (except by using the 50% rule), 8 units, decent condition on the outside, $400K purchase price, good area, within a block from brand new transit rail center

Seller probably will not reduce the price from $400K... there has been too much interest.

Oh... and finally "as is, where is" with no property condition report.

How would you approach due diligence on this? Or is it too crazy?