In July 2014 I bought a 200+ unit deal in Dallas, TX for $6 million and at closing the property appraised at $7.4 million.The deal was off-market and I located by doing a strategic direct mail campaign.This was a tough repositioning deal, but since buying, I have spent $500k of my $750k rehab budget doing interior and exterior upgrades.I am working with a third party management company in TX and we have increased rents over a $100 per unit since acquisition.We increased occupancy from 84% in July 2014 to today we are 99% occupied.I raised $2 million for the deal by doing a syndication.

You will here it a million times on here and it's the truth...you will make your money upon the initial purchase.

I'll say my gut would lead me to guess one of two things:-Its a very depressed area and this is a tax credit complex (or similar subsidy) where the rents are fixed at a % of Area Median Income (AMI) rather than open market rents-Its such a crappy area that you're only able to attract the lowest of the low income folks: not anyone with a voucher, but the folks on straight SSI (no SSDI) for a reasonable proportion of their income. 

@Brian SpatzSome of my clients have credit scores in the low 600s and still get double digit million dollar loans.

I don't believe there is enough turnover in the neighborhood to attract renters above a storefront.Below is a link to an article that talks about the future of Lower North Philadelphia.Also @Steven Rasovsky, if you are not set on staying in proximity to Center City Philadelphia, take a look in the Germantown/ Mt.

That's far too low to get an attractive rate of return on your invested capital.  

How does this affect the amount of potential rent, and is it ever a good idea to build a garage to attract tenants with decent cars.

What do you mean by "profits $1.1 million per year"?

When that happens the person who discovers a productive use for the millions of pounds of granite that will be thrown away will become very wealthy.

I got a major equity stake and was president.. ran that for 6 years.. 50 million HML in Bay area.disaster struck in 1989 to 1990  and I sold out in 1992  remember earth quake and war.Bay area took a huge hit then.I then through a sheer luck.. met my future bizz partner around the pool in Maui.. and I got in the timber business in Oregon I lived in Napa valley and commuted form 92 to 2001.. that was a GREAT run and one of the best business I have ever done.went into buying foreclosure in Oregon in 2001 it got uber competitive when trustee info become available on the net.. moved those funds back to HML  ( in those day I just wrote a letter ot the state and got a Mortgage bankers license no test required)  ran that company up to 35 to 40 million then got my postier handed to me in 2008 to 2010 and then put together a company to buy distressed assets.. ran that up to 350 homes form 2010 to 2013 got bought out and had a nice liquidity event.. now I just build houses in Oregon and Charleston and do JV deals with folks in 12 states.