End of Life Properties - Do you factor in appreciation?

[Matt Ellis]

Hi all- I've been a lurker for a while and am analyzing a few deals and an interesting situation came up.

I am looking at low income properties in the 30-40K range and the numbers look great for the first several years, even factoring in the repairs and problems associated with old houses and low income tenants. My strategy is a buy and hold with roughly a 10 yr time horizon. The problem is that the houses are in the 100 yr old range which is the norm in this part of the city.

I do all of my analysis assuming 0% appreciation, I don't want my numbers being skewed by speculating on appreciation and I would have a hard time justifying much appreciation in these neighborhoods.

So now to the actual question... given that the properties are so old, and my time horizon is in the 10 year range, can I reasonably expect to sell the property what I have bought it for? It pushes the property past the 100yr mark.