Do they look good but need new roofs, have soft subfloors and ancient water heaters?  

We invest in the Indianapolis Indiana market and focus on properties around the $150,000 to $190,000 range that are older homes in good areas that have updated roof, HVAC, plumbing, windows and those type of higher cost items to make sure it has good bones.   

Update: I just had one of my mini splits leak into an interior wall creating some damage to my awesome 1912 Craftsman.

But understand the type of risk could be the exiting tenant having poured cement down the drains, no appliances, no cabinets, a leaking roofs with mold inside the house, no AC,  or squatters having lived in the house with untold 'grossness' being left behind for you.  

You also need to factor in other expenses like repairs & maintenance and capital expenses like replacing roofs and ACs, etc.  

For example, say you have 4 side-by-side townhomes that share a roof and if there is a hail storm and one of the units is un-effected.  

You do not want to be 4 weeks behind on a roof leak or mold issue.

If there are roof issues, trees over hanging the roof, debris in the yard or whatever client's are getting non-renewal notices.The vast majority of insurance carriers are unprofitable or have just now started to return to profitability from several bad years.

I have a unit that has a small leak in the flashing outside the ceiling.

it sold for 2.2M.the property was a huge project also... leaking roof, mold, plumbing, lots of termites, 1970s everything.