Triplex, Duplex and SFR in Iowa

[Account Closed]

I'm looking at a portfolio of 3 properties in Iowa, a Triplex, a Duplex and a SFR. My uncle is in this particular market and runs a management company. I made an offer yesterday around $100K and havent heard yet, but after my uncle drove the properties, he said he wouldn't even want to manage two of them because of their C/D class location. I said, "Uncle, I'm in LA does your town even have rough parts?" He said yes, and that he wouldnt want me to get in and have so many headaches that it wouldnt be worth it.

ON the podcast, you hear a lot of stories of 'buying other people's problems'.  I'm curious where that line is, or is is just based on our tolerances?   The absolute worst-case scenarios on rents would be $1700/mo and even at 25% vacancy it would still pencil out at 9% cap rate.   I'm not sure how to weigh the wisdom of my uncle vs the wisdom from the investor stories on the podcast as far as buying rentals in the more 'seedy' areas.

Any perspective would be greatly appreciated. 

[Michael P.]

Do the cows wear red bandannas in the bad parts of Iowa?