Should I Pull the Trigger on this Deal?

[Bryan Blancke]

This is a potential first deal for me.

It is a triplex in a C neighborhood/area. It is on the southern boarder of Clinton Township Michigan. The home was built in 1945. Its old, and it seems like it might have structural issues. The whole house seems to be sagging. The floors in all the units are slightly sagged. The seller did not accurately state the number of bedrooms which really annoyed me. It was supposed to be 3 units, 2 beds 1 bath per unit. Turns out one unit is a very tiny unit with 1 bedroom, bathroom, and a kitchen with no other general or living room space. The other units had more rooms, but these rooms do not have a closet and therefore don't qualify as a bedroom legally. Each unit only had one legal bedroom.

The house is being remodeled due to a recent house fire. When I inquired with the contractors on sight how much more they were going to do, I was told two of the three units were almost done and ready for carpeting. They did not looking very good in my opinion. They were going to slap some carpet over it to cover up how terrible the property is. Once the remodeling is completed, the tenants who are currently in temporary housing will be moving back in. The seller showed me a screen shot of the leases the three tenants signed to "prove" the total monthly rental income to be $2150, but in my opinion and analysis of nearby options, I think the place only deserves $2000 a month tops. 

In my analysis I budgeted 10% per month for CapEx and Property Management and 9% for vacancy (which is 1 month vacant per year). My insurance cost estimate may be inaccurate and I was having a hard time finding a quote by calling people so i guessed around $210 per month. The asking price is 85k. I am thinking I would be willing to pull the trigger on this one for 77k getting $420 in cash flow, but I am worried that after inspection the property might have bigger problems. I am also concerned that I don't like this property because it will not attract good tenants. Its just too rough around the edges in ways that I don't think I can fix it up. It looks low class.

Discussion, thoughts suggestions? Thanks in advance!