Beginning Investor Deal Analysis Impasse. Help!
Hello everyone,
I have found a duplex in a C-class midwest neighborhood that I believe is undervalued and presents solid possibilty of a 2%+ rent-to-purchase price ratio, based on comps from around the area. It is in need of a full rehab, which is fine for the price they are asking. Or is it?
I am compiling a hybrid list-both line-by-line, when possible, and general estimation of the renovations needed. However, 1) this will be my first property and 2) I am doing all this from out of state, so 3) I don't really know how much the property needs-there are no pictures of the inside, and I haven't seen it yet.
Here are my questions:
1) How do I get/make an accurate (non rule-of-thumb) estimate of rehab costs? Is there any way to do so without potentially sullying the relationship with my future real estate agent/seller? (I have searched online for prices in the area of the things I know it needs-mostly exterior, but what about inside?)
2) Is it appropriate to ask the realtor to do a walk through while taking a video of the property? Especially given the fact that I haven't put in an offer yet.
3) If it comes to this point, would you recommend having it inspected by a certified home inspector or by a GC or both? Why?
In general, I am confused about the order, and how we, as investors, get the information to do our analysis before making an offer. I have heard people on BP who have found the deed holder's name via tax records on the property, googled him/her, then called him/her to ask what major repairs would be necessary. Would this be seen as going behind the real estate agent's back?
I've listened to a lot of BP podcasts and read a lot of the forums, but I still don't understand the order of things. I'm sure as a seasoned investor it makes less of a difference because real estate agents know you/can tell you mean business, but as a new investor, I'd like to try to make sure I don't start out on the wrong foot with people who may potentially be on my future real estate team.
Thanks for reading, and I appreciate any input anyone can offer!