Cash flowing but very old multi-family (1900)

[Amit G.]

Am looking at this triplex which has a good positive cash flow and has a good rental record, with vacancy less than 5%. Its probably in B- neighborhood. I am estimating 10% cap rate, 5% repair and 10% PM costs and have also accounted for 10k in repair costs.  The property is fully occupied and I may not be able to make any modifications at this point but figured it can be kind of a head start in operating expenses account. 

My only concern is that this multi-family is built in 1900s, and may have increasing operating expenses year over year. Does it make sense to buy it? I may not get it for 70% of its ARV. Is there something else I should be looking at or you think as long as its cash flowing, its good?

[Rich Weese]

I would be a contrarian to previous post. There are so many zoning changes that if something goes wrong, a minor repair may turn to complete re-wire or re-plumb. All old properties should have big cash flow because your other benefits may be low: depreciation and appreciation. New loan may also have some different requirements which will be tougher.