Hi all,

New to Bigger Pockets but started following real estate closely a long time ago. Currently in grad school but previously worked in hybrid social service/tenant management roles inside affordable housing developments so I've seen some of the worst of the worst. Long-term, I'd love to get into developing HUD properties on the 50+ unit scale. But back to reality...

I have a family member who has basically inherited and let a duplex and triplex go completely to pot. Duplex is empty with a few hundred in back taxes, triplex is 2/3 rented way below market. Not a great situation. However, these buildings have no mortgages or liens and the areas have become quite desirable to young professionals since acquired. He's lost other properties in the past just letting them go to sheriff sale on back taxes and this is all that's left. 

He does not have the capital to rehab obviously but I have another family member who is basically willing to put up the cash for renos but wants nothing to do with management, nor the old owner having any say over the buildings - I would manage. The owner needs the stable income a lot more than the pennies on the dollar from a sale at present so I am meeting with an accountant next week for the first time to pick their brain about a structured buyout. I won't go too far into it here but I have some ideas and hope the CPA will have better ones. 

If, and it is a big if, we can get this structured favorably, that would leave a 

2BR with finished attic (list as 3?) in the slightly less desirable area, 12-1500 sqft (goal $14-1700/mo)

1BR below it with living and dining, porch, and great stained glass and architectural features, 1000 sqft (goal $11-1300/mo)

This building also has one driveway space thinking $50/mo

2 x 2BRs, smaller but in the more desirable location ~1000 sq ft (goal $14-1600/mo)

1 BR small in the more desirable location ~ 800 sq ft (goal $9-1100/mo)

TR: 6200-7300/mo

Order of operations would be as follows: 

1) Accounting and structuring - still a lot TBD but I am meeting with a CPA firm with a lot of real estate structuring and consulting experience, I expect they'll be pretty expensive but this doesn't seem like a good place to cheap out. I would like to use an AIO software like Stessa or Turbotenant for my bookkeeping, looking for opinions on those. The banking capability in Stessa is compelling.

2) Rehabbing - I can do some finish work myself with a handyman close by who used to work on the units for the owner, and have him for day to day maintenance help. Theoretically we could do the renos ourselves but we did just the bottom floor of a house together last year and it took forever. (looks expensive though)

I also have a solid connection with a contractor who does fast work at his labor costs if I buy and source the materials. This would be the most work for me but I know where to go and putting in the leg work to get sturdy, luxury cabinets and finishes at auction and discount will be a big part of the strategy. I have a clear goal tenant in mind, and pay close attention to the trends and lifestyle amenities that'll help us get to the top of the market from finish aesthetics to secure bike storage. 

Still, I think I wouldn't want to budget less than $20k per unit reno, and the duplex may need a new roof or will in the next five years which will be at least another $20k. They may come in under that but I haven't walked through with my contractor yet. The triplex technically still has cashflow at the moment so I think I would be aggressive on the duplex then look at cash for keys in the triplex and get that done in one fell swoop. 

3) Renting and Managing - While not the most expensive areas overall, there is demand in these areas from people paying at or above the top range I listed for high quality units. These were cheap units at the bottom of the market for a long time and treated as such, but times have changed. 

I'd like to modernize the experience for tenants of the properties so I am concerned with tenant features on the AIO platform e.g.; Turbotenant seems to offer more to tenants with the credit building feature and more options to pay. Mostly I just want a platform that reliably works for pre-screening, credit, background, leasing, payment, and reporting maintenance issues. Ease of tracking expenses for me and accountants is the other major factor for me on the software.

I'm hoping some experienced voices could provide a sanity check, but if we can thread the needle financially this would be a win-win-win at a time when money is only getting more expensive. These could be beautiful properties that add to their blocks rather than detract but I need to take the opportunity myself, it's not going to fall out of the sky. I've always loved and learned about houses, from mechanicals to design, and I'm ready to work. Am I ready? Am I crazy?