Would this scare you away?

[Scott Lyons]

Would be interested in hearing others opinion on how you tend to view these types of situations. I looked at a quad the other day (4 3-BRs). The street was basically all multifamily properties. After looking through one unit there was obviously deferred maintenance. The maintenance guy who also lives there showed us around and told us that the owner rents each bedroom out individually (in most cases - one unit is single occupied). Based on the current rents the numbers look really good. However I think they are getting more income from this type of situation than they would if they rented to one family.

Also, as I was walking the perimeter of the house I was chatting with the next door neighbor who was informing me that the building contains people with criminal backgrounds and has a lot of drug activity. He was very interested in me buying the place so I would clean it up. Said the current owner only cares about the rent check.

Obviously the above is concerning and I'm still trying to gather info on leases and nearby rents because the first thing I'd want to do is get rid of any tenants involved in criminal activity. That being said, would you even consider a place like this if the numbers made sense or would you just steer clear of it? Sounds like a lot of trouble (I'm also a new investor) but at the same time when I see places like this I tend to see hidden opportunity.