14 Unit Rental but Mostly Cash rents

[Helen M Leyzerovich]

Hello guys and gals. My partner and I are considering a 14 unit apt complex in NJ. We met with the landlord and saw some of the units (we will see all if we decide to proceed). It is a C class property in a B/B+ area with A LOT of new development being done around every corner. It's also a 7 min walk from the direct train to NYC. 

Our main concern at this point is that most of the rents are paid in cash and there is no T12. We have monthly rent amounts per each unit and total annual expenses, but it is all from OM. Some tenants are month-to-month and others have term leases. The landlord is pretty hands off but promised to provide leases on all units if we were to have a contract.

Would anyone be willing to weigh in on such situation? We think there is potential and per OM the property is cashflowing nicely, but that's per OM and we know those aren't always very truthful. 

Thanks very much!! 

[JD Martin]

Estoppel agreements from the tenants. This should match what the owner is providing. You would want that anyway so that you have some agreement on deposits that should be turned over to you on closing. Otherwise they may just walk off into the sunset with deposits you are later stuck paying.