Looking at 4plex on BAD block with questionable potential.

[Roger Vi]

This 4plex is located in a large populated city. Very close to interstate, less than 500 ft from bus access, and near one of the busiest streets and intersections. Units are always rented in this city as long as they are maintained well.

There are 5 single family homes, a restaurant, a bar, a 6plex, and a 4plex on this block.. The restaurant is a chain and has been open 10+ years. The bar has been open about 2 years. All 5 single family homes are in terrible condition. The worst one has all its windows boarded up. The best looking home has paint peeling off the building and damaged windows. I thought they were all vacant until I saw someone walk out of the best looking one. All the homes have for sale signs up and I looked them up on zillow and it looks like they are pending. Both the multis are also for sale.

This is no where near the best part of town. The area is good area overall and the worst streets are 10X better than the best streets in bad areas. This is one of those worst streets but it is surrounded by businesses that have just been renovated or built. There is a 100,000sq ft office building across the street and the local paper has just moved their HQ there. There are multiple big brand businesses near by.

So what do you think of this scenario? The 4plex is fully occupied but well below market rent. I want to purchase, update each unit, and raise the rents to market price. This is the towns lower income area and I am projecting to still be one of the cheaper normal sized 2bd 1bths around after updating. I am hoping the 5 SF homes and 6plex are bought by people with the intention of making them look presentable. There are plenty of jobs in the area and rental demand will be strong.