Input desired on a potential 4-plex purchase

[Eric Knapp]

I would like to hear some insights from experienced landlords.

I currently own a duplex and a SFR as rentals. They were both very distressed properties that I rehabbed myself from the ground up, all new utilities, windows, insulation, drywall, fixtures, floors, etc. Although I used materials and methods designed to be economical, I have always insisted on a quality of work that would be acceptable to me if I wanted to live in them. I have been happy with the work, and they have been reasonably profitable.

Now I have an opportunity to buy a 4-plex that could be quite profitable. It is in a nice village in a fairly rural area. More single family OO homes than rentals. It is currently fully rented with 6-month leases. Monthly rents total $2100. Insurance $1100/year, water $60/month, taxes $3100/year. Tenants pay all other utilities.

Here is the thing I have a hard time digesting. It is a house that is just kind of ugly inside. The foundation is in decent shape, but it is old and has settled a little over 150 years, so floors have some slope to them that would be hard to fix without a huge effort. Floor plan is boxy and unattractive. The long and short of it is, it will be profitable rented as is. As units are turned over, I can dress things up a bit, but a complete gut and rebuild would not be profitable. New roof and vinyl siding and windows in place. Wiring is modern.

So, economically it looks good, if I can get over an uneasy feeling of feeling a bit slumlordish with the building. Tenants will always be from a little differnt circumstance than what I am used to dealing with- I am not saying bad. It is more that I am used to feeling proud of my rentals, and finding tenants that are proud to be renting the places.

I apologize if I sound really foolish, but I am struggling to get my head around this.

Thank you.