Advice on large block of single family rentals

[Kevin Layman]

I'm a investor/flipper in Little Rock. Another retiring investor is offering his entire inventory of single family rent houses (50+) at a cap rate of 5%. These houses are mostly located in what has been described to me as "war zones" in North Little Rock AR, asking prices are in the $40-60,000 range.

A management company is in place.

Another experienced investor is telling me that cap rates in those neighborhoods should be more like 20%, without going into specifics on addresses does anyone have any input on this?

Assuming the seller is willing to be reasonable about valuation, is it even possible to finance such a transaction?

[Nicole Lybrand]

NLR is a street by street analysis for sure. I would be very cautious of purchasing anything in the truly rough areas of NLR. Although, NLRPD has stepped up gang patrols in the area and ATF is targeting many of those areas as well so there is potential for improvement over time (potential being the key word). That price range sounds high if the properties are where I'm thinking they are. 

What management company is the owner using now? I'm trying to find one in LR for C grade rentals.