Scabbed together quadplex grew from a single family, Toledo Ohio

[Jason Richey]

I am looking at a deal on a quadplex that has been scabbed together over the past hundred or so years. It's got three units rented, 2 @ 400 + 1 @ 360 with the 4th unit vacant. The seller is asking $80,000.

The carpets are old, the lead paint is peeling, the mold is taking over the bathrooms, the main boiler and radiator plumbing needs to be removed but has already been replaced by electrical baseboard and wall mounted radiators. The units all have electric hot water tanks that are wired to their respective units allegedly. The basement looks like something out of a horror movie, complete with knock down brick walls, dirt floors, and literal tree trunks used as floor joists for the first floor. Oh, and the second floor apartment has a walkout balcony that doubles as a rear entrance / exit in addition to the roof of the first floor.

Not knowing much about estimating rehab costs, I would ball park it at a $30,000 renovation minimum. With all four units rented my back-of-the-napkin math indicates it should cash flow about $800 as is while paying $800 for insurance taxes and mortgage

Am I a fool for even considering this? By all rights it sounds like a terrible idea everywhere except the money which is so intoxicating because I believe I can update the units and get significantly better rent out of them closer to the tune of $600 to $700 a month bringing this up to a 3% or better deal

[Andrew Fidler]

@Jason Richey

$80k would net you four  3 bedroom houses with modern gas forced furnaces and a proper (sellable) lay out. 

You would also be setup to sell to a home owner some day (retail) vs an investor who will expect wholesale. 

$2800/mo gross rent, easily double your net profit and far easier management. 

Houses also qualify for section 8 far easier (no common spaces) and families will stay far longer than a single or couple In an apartment. 

I would walk from this opportunity. The price is insane...for $80k you would have to be valued around $120-160k to make it even worth your risk. Esp when $30k becomes $60k...and you know you have to comply with the new city lead law by July 1st of next year right??

I have a four plex that is half renovated in 43608...I'd sell you that for $40k or complete all the renovations and tenant the last two units for $$60k. I'd say the property is worth $80k completed so there's meat on the bone. (That would be a workable deal)

I don't specialize in the east side but I'm a full-time landlord/investor who just happens to be Property Manager (in my area and for select owner personalities...we don't skimp on the tenant strictness or holding our owners to owning safe, well-maintained houses.) and I am a realtor in my free time. Let me know if I can help you out!