1st deal - 6 unit apartment building...HELP

[Brett Wagner]

So I've made a few offers on single family and small multifamily and as I was looking at another, the owner pulls up to the house and we got to talking.  He had 2 other properties and since I was looking at this one as an investment, he tells me about this apartment building he wants to sell. For what it's worth, I've never been a landlord.

Details:

6 unit apartment building

fully occupied with 5 of 6 tenants being there 10+ years

owner admitted to not really taking care of the place except in "really bad" situations.

hasn't raised the rent in 12 years (tenants are paying $300-$500 PER MONTH less than comparable apartments in area)

Tenants pay electric. Owner pays water.

Believe it or not taxes are $1100/year.  I triple checked.  That's $1,100 per year.

Asking $130,000.  yes that's correct also.

Monthly income $2200

water bill approx. $200/mo

Any words of advice/caution would be appreciated.

[Michael Ohara]

You're going to have a lot of deferred maintenance issues since owner wasn't taking care of the property - Roof, hot water tanks, furnace/hvac come to mind, so you'll need the cash when they go down.  At that purchase price it might be worth it to empty the building, rehab it and lease up at market rents.