Transition from Duplex to SFH

[Rob Gerstenberger]

My wife and I are considering making an offer on a home in the city of Pittsburgh that we think has a lot of potential.  The home is in an area where the median home price is $350,000. The home we are considering is listed for $270,000 but we think it will sell for between $210-$240k - it hasn't been updated in the past 20 years (old kitchen, dated bathrooms, ugly paint/carpet) but has good bones and a nice layout.  It probably needs $20-30,000 of updates and improvements.

The home is situated on a  street that ends with a culdesac and has about 6 other single family homes and duplexes on it, so it has a mix of tenants and owners as neighbors I would imagine. The neighboring properties to the left and right are valued at >300k. Each has comparable sq footage and amenities as the house for sale...just updated. In fact, one sold for more than 430k 2 years ago.

Here is our question, is it worth buying a home like this that has neighbors with such wide economic disparity? we are trying to think of the end game 5 years out. The good news is that the home is on the cheaper side of prices in the broader neighborhood.

I'd appreciate your thoughts!