Inner City Multi-Family and/or Boarding House Advice

[Cory S.]

Hi there,

I am looking to buy my first property and have find that I am being pulled towards multi-family and boarding houses in inner city areas. One area is downtown and the other area is near a College. The properties are around $270,000-$300,000 with 4+ bedrooms and rentals income (already rented out) around $2800/month or more. I am putting 15% down, so this leaves about $800+/month to cover expenses, etc. and to start a back up emergency fund. The homes are nearly a century old. I realize that this is not your standard first investment, but I feel myself pulled to these properties.

My question is: if I were to have a property inspection done, consider major costs that may come up such a roof and whatnot, and the dollars still look good for cashflow, should I go for it or is the nature of this type of property and neighborhood too big of a risk to even consider? I realize that while the cashflows may be higher, the bad area and age of the home may cause issues. The downtown homes would probably not attract the greatest tenants, but the ones by the University should attract students. How do I weigh benefits vs. risk here (with this type of property vs. the standard middle priced, decent area, standard single family home)?