Conflicted during due dilligence inspection

[Mason Keith]

This post is long, you've been warned.

Here is the orginal deal:

Purchase - $75,000

Down - $18,750

Mortgage - $56,250 ($285/month @ 4.5%)

Here's where things get a little more difficult. The current owner hasn't increased rents in several years, currently is renting the two 1bd/1ba units at $250/mo, average in the area is right around $500. The 2bd/1ba is renting at $490 and average is $650.

So of course I plan on increasing rents in line with the fair market value and actually expect at least one of the tenants in the 1bd/1ba to leave (they've been there 8 and 10 years).

So current Rent - $990; Adjusted Rent -$1,320 ($1,500 * .88 Occupancy)

Expenses - $541/month

NOI - $449 ; Adjusted Rents - $779

Cash Flow - $164 ; Adjusted Rents - $494

Now during our inspection, we have found that the roof needs to be replaced, actually only $4,000 surprisingly. But also the electrical all needs to come out at $14,000. I previously looked at a reno loan and a $20,000 was about $311/month. So it seems like the choices aren't great.

During this inspection, I also received a call from our agent informing us they have a client looking to sell an 8-plex, triplex, and duplex as a block which I can definitely buy if I don't go through with this current triplex, may be able to buy both depending on what additional repairs I pay for up front or if I pull in another partner for the additional 13 units which I'd rather not do. These 13 units are all currently occupied save one of the units in the 8-plex.

Of course this is all happening 2 days before my due diligence period is over, thank you for whatever insight you might provide.