Large 3 Story Duplex with 16 tenants

[Mark Magaro]

Hi all,

I'm currently looking at a very large duplex with 8 rooms/6 baths on each side.  It's in an up-and-coming neighborhood and a combination of working people and college students currently rent it.  I've underwritten it and believe that I could easily make it work from a cash flow perspective.  My strategy would be to let it cash flow initially for the next couple of years, and then if the area keeps developing, determine if its worth making substantial improvements to raise the rents significantly.

There are definitely some risks with this property: many tenants are on short term leases; and there is the risk that the immediate surrounding area does not continue developing as it has over the past couple of years. 

My questions: are properties like this (where you have many single tenants are on individual leases) harder to sell?  Are there other risks that I may not be thinking about?  Anything special or different that I should be taking into account when underwriting?