Granted, a substantially depreciated property would usually (but not always) be in a condition where it needs fixing and updating (i.e. deferred capital expenditures), so this is the area where you can negotiate with the seller.

You analyze a property to verify the rent income will cover all your expenses, give you enough to set aside for future expenses (taxes, insurance, vacancy, repairs, and capital expenditures), and then still have a little left over (cash flow).

That was bargain hunting and I wish another 2008 happens.If the cashflow of $1200 a month for your 4-plex is real (after all expenses including factoring in for capital expenditures), then you're NOT nuts for buying APARTMENTS (or MFs) in this market.When the economy contracts, people usually rent when they lost their homes.

Cap Ex (Capital Expenditures) are bigger ticket items that get accounted for differently come tax time.For budgeting reasons, you can just lump the two together and budget, say, 10% total for repairs/capex

Accurate detailed records will make income to expenditures easy to determine.One of the biggest mistakes made by investors and business owners during tax season is believing misinformation. 

WiedenmayerThere are several important questions regarding the historic tax credit - Do you know the amount of qualified rehabilitation expenditures (QREs) for historic tax credit purposes?

If it’s a “tired landlord”, off course the rents would be under market, property with lots of deferred maintenance and maybe serious capital expenditures to do.Financials might be not available - it’s possible that some Tenants paid not registered cash, sch.E was filed with actual expenses but huge “vacancies” which created “losses”.The real question here is: can this property perform better and what’s the cost of CapEx/maintenance ?

So I don't get too far beyond the intention of the original post, I'll close out by saying, "Yes, I absolutely would consider buying for nothing but cash flow, as long as the return justifies the expenditure of cash and effort."

My capital expenditures would probably be minimal for a while.3.

In most markets a $400,000 house would have to bring in a pretty high monthly rent to cover not only the mortgage , taxes and insurance but also set-asides for future capital expenditures and annual repairs.