Multifamily with potential

[Clifton Harp]

I ran across a property in my vicinity that seems like a good deal, but I have reservations. On one side it is a multifamily duplex that is about 3 blocks off the lake (Lake Michigan) in a pretty nice neighborhood. Most other properties around it are ranging from 85k to 140k. This one is priced at 40k.

Now for the bad. This property will need extensive work to the roof over the rear addition, as the roof is INSIDE the addition. That coupled with winter weather and it will need flooring as well. All the usual rehab stuff like paint, carpet, etc still needs to be done as well.

I am wondering if its even worth investigating. All told, once the repairs are done it could be appraised at 85k to 95k. But I am not that familiar with rehab cost analysis, especially on this scale.

Any advice for a begining investor?