12-UNIT UNDER CONTRACT, HELP!

[Augustine Tran]

Hello BPers,

I just locked down a property that I've been following for quite some time. It is a C/C+ property with current rents at $450-475, all 1BR/1BA, 2 Vacant (vandalized) Units, and doesn't currently cash flow. Most of the tenants pay whenever they want and when a late fee is charged, they usually disregard it. The water bill is out the roof ,$500-900. The seller is very motivated and willing to sell at a loss. They are set on making no improvements and will not make any guarantees on rents or occupancy. They hired a horrible property manager who has operated the units for past few years. In short, the PM rarely manages the property and has no records of rent rolls or expenses. 

The property is situated near shopping malls, universities, and down town eateries. 1 BR/1BAs in the surrounding area are renting for $550-$650, so there is definitely room for rent growth. 

My main concern is how do I "deal" with the current tenants and/or transition into rehab & new management. 

Ways to reduce the water bill? 

Self manage first? or Property Management?

Any advice would be very much appreciated!

Thank you in advance.