All bills paid apartments

[Bily Elliott]

So I have a piece of industrial property set to close on August 4th that I will walk away from with a good chunk of change. I have one SFR and have been saving and wanting to jump into small apartment buildings. There is a local 8 unit (two separate buildings, I am not sure of the exact layout yet) 7 are 1 bed 1 bath and the last is a 2 bed 1 bath unit. The smaller ones rent for $399, the lager for $599. This was built in the 20's and is not brick, it is a wood frame building. It is not in a horrible area, but not great either. I need to see insurance, utility bills, bank deposits (to make sure rents are being paid), any other bills for the property (trash, lawn care...). Am I missing anything? Should I be running for the hills or do some digging on it?

[Joe Fairless]

@Bily Elliott  I think you should run for the hills faster than Bugs Bunny running away from Wile E Coyote. I say that for 3 fundamental reasons: 

1. All Bills Paid. Unless it makes financial sense to convert to separate meters I'd stay away from all bills paid because it's highly likely you'll always be chasing dollars trying to make up the money that your residents are spending on their cooling and heating comforts.

2. Build in the 1920s. Deferred maintenance. Lots.

3. Area. Your description of "not in a horrible area, but not great either" is the nail in the coffin on this deal (for me, anyway). If somehow, this was in a B neighborhood trending to an A then, perhaps, I'd look into it. But, a C or (gasp) D neighborhood on an all bills paid property?! Yikes, you don't want this deal. 

Don't....do...it!