I ran into a 10 unit lead in my local area of butler county in an D area. Asking price of 125k. Fully occupied HUD housing. Current gross income 5k. Potential to increase to 6-7k. The owner has owned this property for 30+ years and has had a pest issue for 15+ years. Roaches and bed bugs. Pest control monthly of $600. Roof will need to be replaced. Seller offered to replace roof and add costs to the final purchase price. I currently own two residential properties which I do my own maintenance. I have mixed feelings on the pest issue and me being in the infested apartment making repairs. Does anyone have any experience in these types of pest? Any input on this deal is appreciated.
I personally would suggest against anyone purchasing in a D area. The numbers always look good on these properties, and that is because there are not many buyers willing to purchase them.
Secondly, you outlined a couple of major problems that are known; pests, and the roof. These problems are major problems/repairs (especially the pests), and they are most likely just the tip of the iceberg. Roaches are pretty normal in D-class properties since many tenants in these properties do not keep their units clean. Bed bugs require heaters to get the units up to like 120 degrees for 90+ minutes. It is quite a process. I would avoid the deal, and focus on better properties, in better areas.