*Cross posted in real estate forum*

Morning folks! I just put a contract on a group of rental properties and I'm looking for issues.

Details of contract : 8 neighboring properties for $349k. Obviously, these are not big houses, but they are all currently rented and have been run by the owner for the last 60 years. Current, the monthly rent income on the group is 5.2k.

With 20% down, I'm looking at a loan of $314,920 and with interest, prop tax, PM on a 30year I'm getting around 1.5k.

This looks fantastic to me, but I'm looking for help picking it apart for possible deal breakers. I've got a 15 day option period starting now!

Thanks in advance.

Looks good from the numbers. The biggest things I would be looking at-

Delayed or poorly done maintenance on the major systems (plumbing, electrical, A/C, water heaters out of code, etc). Don't think a standard inspector will find these issues either. I've had very significant unexpected expenses from these things in older homes ('60s and earlier).

Current tenant quality.

Both of these tend to suffer with aging or tired landlords which is most likely the case with your seller.

Try to view the homes while the tenants are home and ask them questions.

Thanks CS! I walked all houses yesterday with the owner. Most of the tenants were also home and welcoming. Some have been there years. I'm also sending a skinny hire to inspect the houses closer and get under them. All but one are pier and beam. City septic for each, so I won't have to do septic inspection.

Thanks for the feedback

quote:

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All but one are pier and beam. City septic for each,

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Main drain lines. Don't be surprised if they give you trouble if they're original. Usually $2500-$7000 to replace one depending on the location and length.

Have an inspector go through the house, no not rely on the current owner's statements. I think I paid a guy $250 or $300 when my oldest daughter bought her first house and he came up with a lot of stuff. Nothing too major, but good to know all the same.

You mentioned the age of the structures. Water lines can be huge issues if they have deposits in them But if on pier and beam less so than on a slab. Wiring, etc. whether up to code (current code) will be reported to you by your inspector.

Age of roof, age of cooling and heating systems, are important. I'd want to see the utility bills for heating and cooling the places unless the tenant is fully responsible for that. I'd still want to see them though.

Good luck to you!

Do you have the financing you described in place already?

If so - what do you anticipate closing costs to be on an eight property loan?

Due diligence on renters will determine success or failure from my small amount of experience

Giant pain in the ass dealing with broke people

1. Location
2. Maintenance
3. Tenant history
4. Future property management