Too good to be true?

[Kendra Levy]

I have the opportunity to buy a property. I would appreciate all feedback. Here are the details: 10,000 Sq ft  13 rooms rented $500-750. Per room, depends on size 2 Huge living room areas 5 bathrooms,  1 full and 4 half 2 full size eat in kitchens  1/3 acre mostly fenced Basketball sized,  concrete back yard 3 storage sheds Swamp coolers, 2  1 new boiler, 1 refurbished Heat system  Fresh paint inside and most rooms newer carpets  This property is currently a boarding home for elderly or disabled people on fixed incomes. Current realtor appraisal of $480- $500,000. Asking $365,000. They are on a deadline to avoid foreclosure. My question to them is why they can't afford to pay the mortgage if they are truly getting at least $500+ a month from 13 people/rooms. The numbers seem to work.

[Account Closed]

@Kendra Levy

I would not go by the realtor's appraisal, I would get my own.  I don't know how well you know the realtor, but I have seen many appraisals inflated to make a sale.  It may be appraised on the building itself, but the type of business it currently has is what would concern me more.

Have you looked into if there are any state requirements or state inspections, stuff like that?  This seems like there would have to be some kind of management on board that would be medical/care focused since there are elderly/disabled people there.   It doesn't seem like your typical multifamily situation, so maybe that's where the numbers game comes in?  Is this assisted living?  If so, you have to have staff to take care of the people, and that could add a big overhead.

I don't know anything about a boarding home for elderly folks, but I would think there would have to be some mandatory regulations you would have to meet; the building might not be up to the regulations.  I can't imagine 1 full bathroom for 13 residences as being enough.   I would speak to someone who really knows this niche and dig into the requirements, if you haven't already.  I think this goes a lot further than just the numbers if you plan on keeping it the same thing it is now.  

I could be way off, just my two cents based on what you have above; good luck!