Hey BP,

I’m looking at buying my first multifamily property and wanted to get all of your thoughts on a few of the facets on one particular deal.

It is a n out-of-state combo deal with two duplexes . I have boots on the ground that got a walk through of the buildings and gave me their assessment...

Both properties are fully occupied and renting at the market except for one apartment which could come up some. They are in  aC-D neighborhood but have long-term renters. I think one has been there for over 20yrs! The PM I had do the walk through said each of the tenants had their places neat and orderly and seemed to be model tenants. However, I’m sure part of that was the notice that there would in fact be a walk through in conjunction with my suspicion they’d rather take their chances with the next owner than the current so their on their best behavior, so to speak.

The current owner has deferred maintenance for quite a long time to the point that there are probably some major violations. The roof is in dire need of replacement as well as the windows and all mechanicals. Nothing cosmetic has been done.... ever? Chipping paint, plastic light fixtures, etc. Both buildings need complete rehabs.

So, here are the things I'm wondering... Are money pits a good deal if they're cash flowing and you can find the right selling price? Currently the wholesaler is asking far more than they're worth to me, but the rents being at market and already occupied is attractive. Being occupied also means that I could structure and plan rehab piece by piece rather than all at once. That also means that I couldn't do a quick BRRRR.

If I can negotiate a more appropriate price, what are some methods by which to finance this deal? The wholesaler will want to make it quick; cash, HML, private money. Would a HML care for a transaction such as this?

Simply put, can you pull off a BRRRR when one of the Rs is out of order?