Multifamily land w/ old beaters for rent on it - WWJD?

[Brian Sorensen]

I'd like to get your feedback about this property.

It's a one acre parcel with four small 1940s homes on it, all currently rented. They need some work just to be able to continue renting them. However, the land is zoned for 20 units per acre. The rentals will cover the payments plus a little bit. The owner is willing to seller finance at 6.5% with a down payment of $10k.

I'm interested in it because once the housing market heats up the land has good potential. In the meantime, the old rentals cover expenses until the market/financing/ circumstances make it viable to demo the oldies and build the new.

I'm guessing the owners are selling because they can't afford deal with the deferred maintenance and the market still hasn't heated up enough to do something with it now.

How would you evaluate this property?

Thanks!