@John Solis  There have been many reports here on BP of people unable to get property insurance wieh K&T is present, so check with your agent.K&T was perfectly functional for decades, but at this age, the cloth insulation on the wires is often deteriorating - especially if someone has added insulation over the wire.Generally, these homes have fuse boxes, not breakers. 

I would be happy to pay $84k, but the house is deteriorating and now the roof and foundation need replacing.  

Just need to divest if neighborhood starts deteriorating.

You'll also want to ensure you have a good property manager to look after the upkeep of the property if you are not there to notice anything deteriorating or which may need attention.Creating an LLC in California would cost you a minimum tax of $800 every year.

3 (I know I said two potential outcomes, but I am also seeing a rather predictable outcome from the first one that would affect the second, or make it impossible) - Given that the property is likely to deteriorate before you have to refi, its worth would be lower.

Also, I'm looking for how others have overcome this problem in their own investing.Here's some background on the property:Pros:Each unit has in-wall A/C units that are fairly new.All 4 water heaters are less than 4 years oldAll 4 electrical panels have been rebuilt5 minute drive to downtownCons:Built around 1950 so some items are showing their age.No washer/dryer hookups in unit, no on-site laundryMinor issues (in my opinion):Damaged sidingA few small areas of wood rotIssues I'm concerned about:Roof:Roof deterioration - Roof age is 14-16 yearsRoof sealant at ridge caps, flashing, and accessories should be resealedRafter sag - this caused the roof to sag in certain areas, which my inspector said is typical for older homes that have no collar ties installed.Attic access was sealed off, caulked and painted over by the current or a previous owner. 

Hello, I own a 12-plex, built in the 1920's, with a decorative awning that is deteriorating.

Hello, I own a 12-plex, built in the 1920's, with a decorative awning that is deteriorating.

Over the past 6.5 years I have seen my mental health deteriorate and my eyes have become tired.

Something about oil that deteriorates with time, sun, rain, temperature changes, etc...