I have moved forward in purchasing a different, but similar, place. The place I'm purchasing is accepted for $84,000 with seller paying 4K to closing. However, at the time, I had not yet seen the downstairs, and it wasn't in nearly as good shape. I didn't expect it to be as good as the upstairs, but I didn't expect it to be as bad as it is.
Anyway, I moved forward having it inspected, and the inspector says that current and near-term fixes would total about $15,000. The current residents have to go no matter what. They've lived there 3 years and at some point the fiber glass above their tub started cracking. Water has been leaking and will take roughly 3-5K to fix. Had they done something as soon as it started cracking, it would be much less. The roof needs some repair, and some of the electrical is still knob and tube, so it will need replaced in the near-future.
The place currently fetches $550 downstairs for rent. I believe if these changes are made, that could go up to $650, or possibly even $750.
Also, I made a point to ask my inspector if it was feasible for me to live upstairs while these changes are made downstairs, and he said it most likely would not be a problem.
So, I'm starting to get nervous about the decision, but even at the high end of the repairs, we're talking $104,000 total cost. At that point, rent and rent-equivalents would be at least $1,300, and up to $1,500. I'm thinking while I'm a little more nervous about it, I had planned for some repairs to be needed, and this still comes out well over the 1% rents. Also, making all these repairs means it'll have a brand new roof, downstairs tub, and new electrical.
Thoughts?