Allentown PA off market deal analysis

[Mike N.]

Hi members & investors in Allentown PA

I am just starting out and have been introduced to an off-market 'opportunity' in Allentown PA. For those who know the area, its not the downtown 'war zone' and is more in South Allentown near St Lukes -- I'd call it a C property.

Its a 3 unit row-house built 1900, pretty good condition, newer roof and water heaters, not sure of other stuff. Overall pretty well maintained for older property. It currently has 3 tenants and grossing about $2200 / month, between $750 and $800 each. I'm not sure if its setup to meter each unit separately. I'm also pretty sure that 2 of the tenants are getting government assistance and I think they are longer term tenants.

After taxes, insurance and with the owner paying for heat and water the owner claims it is netting $20,000 per year.

Ok - where I need help is how do I value this property ? Comparable MLS properties in the same neighborhood sold anywhere between $80k - $120k in the last 12 months but I couldn't find too many 3 unit examples. The owner is hoping for something closer to $200k to reflect the income but that is way out of line ( I think ) as the property will need work, its not going to appreciate much if at all and I don't want to buy a $20000 job !

Any advice ?

Also - if anyone has rental properties in this general vicinity who can provide insight / verify my assertion that its not a war-zone I’d appreciate it !

Thanks in advance