Are there actually properties that you would not buy at any price?

[John Chapman]

I've been doing some direct marketing to small apartment buildings and have come across one or two where when I look at the expenses and rent (based on what I perceive to be reasonable assumptions), I would not offer a $1 on them because their expenses are likely to exceed income. The example I'm thinking of was a D (with a capital D) property, all 1/1's, all bills paid, including cable, no central a/c, 20% vacancy (per owner so probably higher), lots of evictions, and all the other apartments were offering massive rental incentives. No reasonable way to turn the place around because it's in such a crummy area. Maybe you could goose cash flow by cutting cable, but then I suspect that would probably cause more problems than it's worth. Also, the owner admitted that you can't push utilities on the tenants because they can't get accounts (can't afford the deposits). The place had already been renovated, too, and was at market rent.

Has anyone else come across a property like this, that is, one that likely won't make money. I don't have a ton of experience in this area, but was kind of surprised by my conclusion. I suspect you are more likely to come across this in with "all bills paid" scenario.

I struggle with the concept that there is no value to the place, other than perhaps land. I just don't want to be looking at these properties too narrowly and missing opportunities. Any input would be greatly appreciated.