Rehab for 1840s Home

[Jake Melendy]

Hi BP,

I am looking doing some preliminary analysis on a few small multi-families (2 -3 units) and have noticed a number of multi unit homes that are from the 1840s - 1900s that appear to have decent Cash on Cash ROI. When I run 4 of them through the rental calculator I am seeing 10.5% - 14% COCR depending on what I am putting in for repairs which is my largest variable in this analysis. Most of these homes appear to need some work and I am running preliminary numbers with $15k-20k per unit.

I have 2 questions.

1. What are key areas of a rehab for this age category (100-150 years old) of a home should I be looking at more closely than a 20 or 30 year old home for rehab.  I am trying to understand areas of risk that could make the repairs way higher than I am anticipating.

2.  My plan is to buy and hold for at least 3 - 5 years as I am building up my portfolio.  However if / when I want to exit are there any concerns about selling this age of home?  The neighborhood is B / B- and I believe it will remain a decent rental location due to efforts to rebuild this town and other towns close by to try and get college grads to stick around (major state university is 25 minutes away).  

Thank you for the feedback.

Jake