Offer on 10 Unit - Site Unseen

[Christopher Morin]

Hi all.

I'm not in the United States currently, which makes this tricky, but I have a stellar team that I trust. My agent sent me a 10-plex that's in rough shape. The listing has a GOI showing 59k, and NOI of 42k, listed for 525k. I redid the numbers on my best estimates and came up with a GOI of 29k. I then put it against an 8% cap. I factored in $10/sqft rehab as a baseline and came up with 70k. So I submitted 2 offers the day she showed me the listing.

310k conventional purchase.  

370k Owner finance or contract for deed w/ 5% down.

The listing agent is slow, but communicated that this property needs a ton of help.  The owner didn't realize what he was taking on, and there are 2 vacant units in the 10 plex that need full rehab from water leaks.  Additionally, there is a un-usable duplex on the parcel I just found out about, apparently water damage from the parking lot next door has made it un-inhabitable.  This kind of turmoil smells like opportunity.

I figure once (if) its under contract I'll do inspections and due dilligence toadjust all my figures.  If my contractor comes up with a higher than 70k rehab estimate, I'll negotiate my offer by this amount.  If rents are not as advertised or expenses are higher than expected, I'll negotiate my offer accordingly.  I will pay my buyer's agent to act as a property manager during the, and I have an awesome property manager to assist filling the vacant units.

I will have never seen this property.  What can go wrong?  I'm being serious, help me prevent disaster, I'm eager for your feedback.