just wondering if anyone has purposely looked for properties with high vacancy, bad management, poorly condition, low cap rates, low NOI, etc and just completely did a 180 with low expenses, good cash flow, etc?

other buyers would pass on these deals but you have ways of making the numbers work and profitable.

High Vacancy, Bad Management and poor condition will all be reflected in the properties current value. 2 of these 3 are easy to fix and those 2 may be the reason for the 3rd if that is the case then it would be real potential. If the High Vacancy is not caused by the other 2 then there is a problem and you would have to identify what is causing it before it can be addressed.

thanks paul,
would you still consider the property if all 3 were problematic in exchange for a 60% FMV? would this be a good manageable risk since you have a 40% equity cushion?

also do you personally manage the properties yourself or do you hire property management?

Still depends on the High Vacancy problem. If it is a geographic problem causing the vacancy and there are no economic developement plans in the works for the area then that 40% may dwindle fast and you also need to consider your renovation budget.

Eliminating the Bad management and poor condition will cure the vacancy problem with some advertisement.

I oversee the management of my properties and have a full-time handyman that handles maintainence calls. If is a major problem he has the authority to have the problem fixed. He and his family live rent free plus a small salary in one of my oldest SFR units. If you have say 12 unit building it would be benefical to have an onsite part-time manager.