2 Duplex Package- Potential Issues

[Quinn Lamb]

I'm in the process of buying two brick side-by-side duplexes in my neighborhood for $568K (4 Units/3BR/1BA each- Currently renting for $1200, comps in the neighborhood rent for $1800+). A very similar duplex just sold two doors down the road for $340K... When I put in the offer we had only been in one of the units and of course it was the nicest unit available. We were planning on making renovations to the bathrooms and kitchens plus obvious aesthetic work but upon seeing the other three units I fear there are some more serious issues and wanted to get some feedback from experienced REI. Quick financial summary below for context:

Listing Cost	$567,500
25% Down Payment	$141,875
Home Improvement	$100,000
30 year Mortgage
Loan Amount	$525,625
APR	4.5%
Life of Loan (years)	30
Number of Payments a year	12
Total Number of Payments	360
Payment each Period	$2,663
Sum of Payments	$958,775
Interest Cost	$433,150

Monthly Rent: $4800 currently, Goal is $7200, 

Expenses: $2400 a month (50% Rule)

Issue 1-Potential Bad Tenants

• One of the units was absolutely trashed with mouse traps and obvious apathetic tenants
• One of the units looks to be a party house for recent college grads

Do we have any leverage to get these tenants out, both expediting our much needed renovations and getting us higher cash flow from the higher rents.

Issue 2- Wooden Box Gutter Rot, Missing Mortar in brick

• We're getting estimate on this but it seems to be an expensive fix.

Issue 3- Old AC Units/Water Heaters

Issue 4- Leaks around windows to interior

• probably ties back to the mortar issues in the brick

Do any investors have experience in seeing major issues like this after the initial offer was accepted.  Curious to hear stories on how much sellers were willing to move after the buyers discovered more serious issues.  These units seem to have great potential and are in an unbelievable location, just worried about all of the "if's"