Duplex needing rehab

[John Blythe]

hey all,

i viewed a duplex yesterday that requires a load of work and wanted to hear thoughts on it.

I've attached a few pics from the dumper. They don't do its rattiness credit. It'll take a full remodel of the bottom floor (it's two flats). The basement isn't in bad condition, but the wiring is all over the place. Looks like—to the untrained eye—that some work will be required down there to get things up to code. 

It includes a whole other 'house' right behind the primary property which has two other units. The city is wanting to tear it down, they've been fighting to not have to. I don't know any more of the details surrounding that situation. The extra two units may make it a steal. Knocking it down may make it a bust? Or maybe it'll add slight value since it'll allow for a great parking situation for the main property/units instead of being street parking (on a relatively busy street).

They're asking $39,900 for it. It's been on the market for nearly 6 months. I'm sure, given the condition, the possibility of the second-property tear down, and the amount of time on the market thus far that I could get them down to $30k pretty easily, perhaps even lower. I imagine I'll need a solid $60-70k to really make this thing awesome. At the end of the day, though, I'd be paying $100k for a large property (4bd/2ba, 4bd/1ba) or even huge property (if the back 2 units can stay standing) that would be worth $150k conservatively, upwards of $200k based on other sales in the area. 

My primary strategy/goal is a longer term hold, so the cashflow is most important to me. This sort of appreciation is icing on the cake and should make the discussion easier when i meet with the hard money lenders.