HUD master lease apartment building in Sacramento

[Gary Lipsky]

I found this really interesting opportunity in Sacramento. It's a 24 unit that has a HUD master lease with about 2.5 years left on it with another 2 yr mutual option. The property doesn't need much work and the cap rate is 6.8%. I know the worst case scenario is that in 2.5 yrs they don't renew and I'm left with an empty apartment building that I need to lease up. However, it seems that there is a great need for this housing and HUD pays well with one check. Anyone have any experience with this? Thanks in advance for your insight.