Need advice

[Sam LLoyd]

Here's the deal:  I could use any advice out there before I put money up to order the appraisal in a couple days.

7 detached cottages on 2 lots.  I'm able to purchase them with 2 residential mortgages.  I'm trading equity in some other land as the downpayment... after which I'll purchase the other land back from the seller with a 5yr balloon.

Pros:  Almost nothing out of pocket.  I calculate that I'll make enough money to pay for my management services, and another $100 to $200/month... not a lot of money, but the income is very important to my mid-range goals right now.

Cons: Property is not in the best neighborhood, and I know that the seller is misrepresenting the income/expense... I'm not sure by how much.  Buildings are in great shape, so there is not way to force any value into them... only exit strategy that I see would be to sell them.  Also, the 80k balloon in 5 years is doable from my perspective right now... but that's 5 years from now, do I want to bet on the market staying level?

Note:  After the balloon, the property should be making $1700 plus management income... which is why this is tempting.

Any red flags?