Older homes...good investments or money pits?

[Macie Moore]

Hello All,

My husband and I are BRAND NEW to the investing arena and have been in our education phase tip toeing around the hot lava that is "analysis paralysis".

We are considering taking the plunge and opting for the "house hack option" in a du, tri, or fourplex so that we can "live for free" and spend extra money on advertising (we are very attracted to the seller financing option) or saving money for some down payments on "flips" trying to get some capital coming in for our end goal of buy and holds.

Our town is very historic, there are a lot of 1800/early 1900 homes. These homes are very large and as a result, many have been turned into multi-family homes. We have found one that we are interested in purchasing (a triplex) that seems like a great deal with great cash flow. As I mentioned, we intend on "house hacking" and living in the 3rd, larger unit, of this property. During my research, I went on the county auditor's site to see past purchase prices, taxes, etc and noticed that an investment company purchased this home in 2016 and they are who are currently trying to sell the home.

This particular home was built in 1908, and the house description uses many buzzwords about "newer" this or "improved" that while also using "charm" (read - old). It does seem like a good deal, but we are brand new and I feel like maybe it's a red flag that an investor is selling this home less than a year later?

Should we avoid these old homes (that make up a large part of our market) due to unpredictable and potentially expensive maintenance costs? Is it common place for an investor to sell properties like this that quickly and it not be indicative of a larger problem? What are some questions we could ask the seller to figure out the behind the scenes of what, on the surface, seems like a great deal? (i.e. - maybe there are tenant issues, or a costly repair that needs done, or maybe it's a money pit and they want out). What are some things to consider when dealing with old homes?

Thanks in advance for any insight you can provide!