Possibly too good to be true, help me see what I may be missing.

[Jonathan G.]

I just wanted to post a deal on here that I just recently came across.  I am new to Bigger Pockets and would like any advice at all when it comes to looking at this deal.  It seems to be way to good to be true.  I have run several different formula's as a first step (50%, 2%, 1%).  The next would be to pop all numbers in in the Rental Properties Calculator on BP.  Then I would probably go take a look at it.  It just shows so much cash-flow I am not sure why they are selling it for so low, and why it is not gone yet.

Before I do anything else I wanted to post the info on here for everyone and anyone to chime in.  Any help that you would offer in regards to looking closer at this deal I would much appreciate it.  If I forget to leave anything out in the initial post please feel free to ask me for any important information that I may be leaving out.

DEAL

12 Units with 1bedroom/1bath rent is listed at $450 per unit.  They say it is 100% occupied.  Asking price is $254,000.  It was originally listed over a year and half ago for $350,000.   Also they are offering owner financing.

It sounds too good to be true.  Any advice.  Should I go check it out.  Am I missing something huge?  Any advice would be very much welcomed.  Again I apologize if I have forgotten something.

Interior Features

• Wall/window air cond.
• Carpet
• Tile flrs
• Range and oven
• Refrigerator

Exterior Features

• Elect. srvc avail.
• Public water supply
• Public sewer srvc

Heating Features

• Gas
• Electric

Unit Features

• 12 total unit(s)

Misc

• Topography: Public sewer srv

[Jean Bolger]

It depends on the condition of the place really. My guess is that there's a ton of deferred maintenance. That doesn't mean it's not a good deal, you'd just need to know more specifically what you're getting into. I bought some 1-bd apartments for even less a door, but pretty much all of the cash flow will be going towards rehab and repair for quite some time. Once that is done it should be a really good money maker though.

At $450 rent (again, same as mine) you're dealing with a pretty management intensive tenant base. Make sure you use something like 13-15% for management when you run your figures. 

Do the tenants pay utilities, water?

In the lower rent price point it's possible to get a cheap price only to find that the expenses eat so much of the income that there's not enough meat on the bone at the end to make it worth the hassle. But if you can get your expenses in line it could be just fine.

Seller financing may mean a tired landlord, or someone who thought they could deal with that tenant base and were wrong. 

Go check it out! I'll be curious to hear more. Is it in Tyler? I played a concert there for the Community Concert Series folks a few years ago.