Here's the deal

I would want the property delivered vacant unless there are some good tenants in there. Not the sons friends.
It sounds like a good deal, What is the value of the buildings? is that price normal for that area.
See if the father will owner finance the properties instead of leasing them.
JMO.
Good luck.
Richie.

Most nicer 4 units seem to be going for aroun 159,900

From Auditors website:
Market (100%) Assessed (35%)
Land Value: $45,000.00 $15,750.00
CAUV Value: $0.00 $0.00
Improvements Value: $152,400.00 $53,340.00
Total Value: $197,400.00 $69,090.00

Real Estate Property Analyzer says market value should be around $224,000 given the rental amounts.

The Reason I want to do lease option is I have no money to put down. It sounds like the seller may be motivated.

A few other questions about the deal:

1. Are the property taxes $3,466.82 per year per builidng?
2. How much is the current cost for insurance?
3. Do you have to furnish any utilties such as common area lighting or water?
4. Is there other income source available such as coin-op laundry in the basement?
5. Any chance of getting more than $600 per unit per month?
6. What is the vacancy rate in the area for apartment building similar to yours?
7. Are there any other annual costs such as recharging and servicing fire extinguishers, rental licenses with your city, etc.?
8. Do you furnish appliances and if so what is the condition of each because you may need to budget for a monthly repairs and Maintenence
9. Large items such as roof, furnances, central air units, hot water heaters. You may want to look at the age and determine when they may need to be replaced, this will also affect your numbers and cash flow

I hope the deal has good numbers and works for you. It is great you are looking at new deals and trying to set the plan in action. Believe and Achieve! - Joe

1. One is 3,466.82 asnd the other is 3,446.01.
2. I have not checked on insurance, good point!
3. I don't think there are any common lighting or water. all four units are supposed to be metered.
4. I don't think there is any other source of income. I am still trying to get realtor to let me in to look at the units.
5. I think $600 a month is pretty much max for the area according to REIBrain.
6. Currently there is one apartment vacant in the two buildings but there is the problem of non-payment of rent as listed above.
7. I think there is a one time conveyance fee of $25 per property.
not sure about fire extenguishers.
8. Appliances are furnished. Buildings were built in 1988 so not sure of the age of the appliances.
9. The roofs didn't look bad during driveby, will need closer inspection.

Thanks for the update of information. It is great you are running the numbers for the deal. You may want to verify the following so you have a budget in place down the road:

Point #3 - I would guess their is probably one meter for water, but verify this. The water could be included with your monthly garbage expenses. Also count how many electric meters are on each building. If there are 5 you probably have a common area cost for lighting inside the hallways, basement, or exterior flood lights, etc.

Point #8-9 Since the buildings were built in 1988 (21 year ago) see if the roof, furnaces, and central air conditioners, hot water heaters, etc are all original, you will need to budget for these items if they are. Also, if the appliances are original in the unit, verify what is in each such as a stove, refrigerator, dishwasher, laundry washer & dryer, etc. There may be a cost for replacement or repairs in the future.

The other expense you may want to consider is advertising and/or a management fee if you are not going to actively manage the units. Good luck with this deal. It may have potential when you review all the numbers. Believe and Achieve! - Joe