Seeking advice if property in Loraine is a good deal

[Daniel Kahn]

My agent convinced me that a place was a good deal for an investment property. It's in Loraine, OH (outside Cleveland) - it's in a C neighborhood (as many are in Loraine) but one of the better school districts for the city (Clearview) and on a quiet street. It's a duplex, one of the units tenant occupied; it was listed at 149k but was on the market for 6 months and had two offers that were made and withdrawn. I made an offer for 115k and it was accepted.

So far, we've done part of the inspection and no major issues, only minor things, although the roof may need work in a few years. Still one of the units is pending inspection as well as the crawl space beneath the space.

When I initially did the math on this property, it seemed like a good deal - the cash flow is very good, based on what the current tenant pays. And I thought because I'd gotten it 35k under asking I'd probably gotten a good deal on something that the seller had initially overpriced.

However, I am wondering if there are red flags on the place and it's going to end up being a lot worse of a deal than I thought.

I just asked the agent how much it sold for last time, and it turns out 3 years ago (in 2019) the current seller bought it for 28k. Granted, renovations that were done last year include new hot water tanks, kitchen cabinets, baseboard heating, carpet, vinyl flooring, interior Doors, plumbing, and light fixtures.

Still, just the fact that I'm buying it now for almost 4x what it was valued 3 years ago raises alarm bells, even if they did do some renovations. And the fact that it's been on the market for 6 months and two buyers backed out. I'm just wondering am I missing something about the property or the market? I don't need it to appreciate any more than it already has, but if I buy it for 115k and then decided to sell in a few years, would I have a lot of trouble selling it and have to take a huge loss on the property in order to sell?

I've done some research on recent sale prices on other houses in the neighborhood. I see a MFH that's slightly bigger but looks from the exterior in a bit worse condition that sold for 110k last year, and a SFH that's bigger than mine that sold for 69k (which is 10k less than it sold for 3 years earlier). The numbers seem all over the place and that's what's worrying me - I feel like I'm going into this blind and am not sure I have the expertise to know if this is a good deal based on the property condition.

If anybody has any advice I'd appreciate it. I can still back out after the inspection if I wanted to.