Ugly? Double check (tenants and property!).
This property seemed to have the right things wrong to make a good cash flow deal. Good location and layout are secondary (but still important) to a great buy, but ugly and dirty are what is going to get you flexibility in price and terms.
You need to learn the skill of looking beyond the dirt, need for updating, and deferred maintenance to see what it will look like after fix-up. This takes practice, but once you have this ability you are well on your way to getting ahead in the cash-flow game!
This is from Julie Broad, in my opinion one of the best "Gurus" we have here in Canada:
the biggest goldmine for you as a buyer … you (hopefully) can see what a clean up and a little updating can do to a place. Few other buyers can.