Should I jump on this deal?

[Account Closed]

I found a 10 unit building 8 1bed/1bath and 2 2bed/1bath. in my local california area. They want 1.5million but it is completely empty! It’s great becuase I can get all new tenants in at market rent. But also scary because of holding cost while filling the building up with new tenants. During covid people can squat very easily in california.  The owner will do seller financing with 400k down at 4% interest only for 5 years...

the 1bedrooms can easily rent for 11-1200 and the 2bed for 15-1600

Any ideas about this deal will truly help. I currently own 1 duplex I got in 2018 (going great)  and am flipping a manufactured home 100 yards from the ocean where people are paying 700sq ft for these manufactured homes... I have a little experience but not too much in being a landlord. 

What is your take on multi family in california should I jump on it and lowbal 1.3?

[Bjorn Ahlblad]

@Account Closed most properties in California are bought with the belief that property values will increase over time and most of the time that has been true; at least in the past. So generally the assets don't fully pay for themselves and will require some help in the form of cash from the owner. I had a quick stab at underwriting the property and it does not cash flow; so only take on this property if you have a boatload of cash available and if the seller is very flexible. On top of that depending on where LL tenant laws can be a disaster. I was a small time LL in Ca for 30 years.

I don't think 1.3 is necessarily a lowball. But I know nothing about the area and condition etc. Why is it empty?