QOTW: What are your "hard pass" items when evaluating real estate

Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes

Welcome to our Question of the Week! We have a lot of people who are entering the world of real estate investment who could use your wisdom. When evaluating a property, what are your automatic no or exclusion list items and why? Was there an experience that caused you to exclude them? How did you handle that experience?

Let's help each other learn to analyze a deal quickly and effectively. Share your thoughts!

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Sean Ross

Member since 2022 · 137 posts · 115 votes

Saw a SFH with 87 windows.

That would be a hard pass from me!

40 Reply

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Sean Ross
Member since 2022 · 137 posts · 115 votes
4y
Saw a SFH with 87 windows.
That would be a hard pass from me!
40 Reply
Alicia MarksPro Member
OP
Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes
4y
Quote from @Sean Ross:

Saw a SFH with 87 windows.
That would be a hard pass from me!

My family restored a 1912 4 square with 42 windows and I thought that was a ton!
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3 Reply
Dong Yan
Real Estate Investor · Irvine, CA · Member since 2016 · 129 posts · 42 votes
4y
Alicia,
I was just about to post a question, I am facing the same questions right now.

If it is the rental properties the side yard facing the major street is the deal breaker or no? The property itself is perfect with nice layout and reasonable price and huge back lot . the only issue is the side yard facing the major street, shall I submit the offer or pass?

STella
31 Reply
Heather Hatcher
Real Estate Agent · Honolulu, HI · Member since 2022 · 22 posts · 83 votes
4y
When there's a beach in the basement..
In all seriousness, if the property is in a lava flow hazard zone or high risk flood zone, I will not put effort into looking at these properties. I know too many people affected by these zones and it's always so devastating. I don't want to put anyone in that situation if it's likely to happen.
I'm excited to see what others have on their 'no way list'.
30 Reply
Heather Hatcher
Real Estate Agent · Honolulu, HI · Member since 2022 · 22 posts · 83 votes
4y
@Dong Yan If it's the perfect property and only the side yard fence is facing the street, there are things you can do to limit sound. I have a rental also close to a street, similar situation. First, we replaced the window. Second, we created a barrier between the wall and fence with plants and soundproofing mats. Last tip, we provided the tenants with white noise type equipment! One is a small fountain and the other is a tower fan. It has worked great and there haven't been any issues!
If these things can potentially help, I would consider the deal if the numbers make sense and it's too good to pass up.
Mahalo,
11 Reply
Dong Yan
Real Estate Investor · Irvine, CA · Member since 2016 · 129 posts · 42 votes
4y
Quote from @Heather Hatcher:

@Dong Yan If it's the perfect property and only the side yard fence is facing the street, there are things you can do to limit sound. I have a rental also close to a street, similar situation. First, we replaced the window. Second, we created a barrier between the wall and fence with plants and soundproofing mats. Last tip, we provided the tenants with white noise type equipment! One is a small fountain and the other is a tower fan. It has worked great and there haven't been any issues!
If these things can potentially help, I would consider the deal if the numbers make sense and it's too good to pass up.
Mahalo,

Heather,
Thank yo so much for your great tips. I think those tips are very helpful and will eliminate the noises.
will you worry about at the time of selling this close to street issue will deter the potential buyers?

Stella
0 Reply
Andrew Bang
Lender · Texas; Arizona · Member since 2019 · 276 posts · 282 votes
4y
Biggest hard pass for me, I look at the partnership buying the real estate deal and how they are set up. Who is bringing the money and who is making the calls. Who is making the design choices and who has the experience. Biggest red flag I see is, the partner with the biggest personality is making the decisions even though they don't have the most money in the deal and don't have the most experience.
21 Reply
Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
4y
directly fronting a busy street.
7 Reply
Dell J.
Member since 2010 · 210 posts · 158 votes
4y
I dont do major structural or foundation issues. Nothing super ghetto. ill be willing to entertain anything else at the right price
14 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Haven't seen anything yet that I wouldn't touch - as long as there is a very decent upside $ wise. There is always a fix.
14 Reply
Dong Yan
Real Estate Investor · Irvine, CA · Member since 2016 · 129 posts · 42 votes
4y
Quote from @Jon Martin:

directly fronting a busy street.

you think the locating facing the busy street is a deal breaker?
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Quote from @Dong Yan:

Quote from @Jon Martin:

directly fronting a busy street.

you think the locating facing the busy street is a deal breaker?

Depends on the street. Being on some busy streets is the ultimate goal....
2 Reply
Jennifer Buchholz
Rental Property Investor · Darien, CT · Member since 2022 · 34 posts · 24 votes
4y
Flood zones and foundation issues
15 Reply
Troy Albers
Rental Property Investor · Fleming Island, FL · Member since 2019 · 85 posts · 104 votes
4y
If it’s for a property I’m looking to hold and rent out for a long time, I’ll generally pass on homes with pools. They tend to be a pain in the a$$.
21 Reply
Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
4y
Any C or D property.
5 Reply
John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y
There's no particular issue that would make a property a hard pass for us. I tell the realtors we work with that a property can have anything wrong with it but not everything wrong with it. ie, a bad roof would be ok. A foundation needing work would be ok, needing windows and doors would be ok, but a property that had all of those issues would not interest us as the time/cost to repair would make it a bad deal.
6 Reply
Susan ThelenBusiness Member
Real Estate Agent · Mesa, AZ · Member since 2020 · 91 posts · 39 votes
4y
No pigeon problems. I am speaking from experience. They are extremely hard to get rid of.
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Matt M.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
4y
Foundation issues, flood zone, and todays inflated prices.
4 Reply
Nathaniel CherubiniPro Member
Investor · Hernando FL Stationed in DC, VA. · Member since 2016 · 58 posts · 48 votes
4y
War zone type neighborhoods. If I wouldn't feel safe in my property then I wouldn't charge another human being to live there. I will invest in the edges though hoping to bring improvements into the area.
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13 Reply
Mike Gordon
San Jose, CA · Member since 2020 · 42 posts · 25 votes
4y
Flood zone, a pool, and foundation cracks. I looked at one house with a really bad animal smell and passed because all of the flooring would have had to be replaced and the house repainted.
3 Reply
David P.
Member since 2020 · 404 posts · 235 votes
4y
I think rough neighborhoods still a no no for me. No mater how gentrified some areas will stay rough and you'll cater to lower end tenants who will cause problems.
9 Reply
Isaac S.
Member since 2018 · 563 posts · 562 votes
4y
Can't be in the MetaVerse, can't be next to motorcycle gang clubhouse, can't be in the flight path of a major airport, can't be a bad deal...I can't disclose my other conditions as that is highly proprietary information, super top-secret.
13 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
Serious foundation issues; terrible neighborhoods without realistic prospects of improvement; detrimental nearby property uses that cannot be rectified (landfill, sewer plant, prison, etc). Those are probably my major ones. Two of them are the "location x3" mantra, and foundation issues can be a nightmare to resolve or possibly cannot be resolved at all. I looked at a house one time that had a large, active developing sink hole under the garage floor. They had tried to repair it twice and when I went to look at it there was still a hole as deep as a major street pothole and as wide as a coffee table. No thanks; there's a lot of limestone and underground caves here and sinkholes can grow big enough to swallow whole houses.
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6 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
Quote from @Mike Gordon:

Flood zone, a pool, and foundation cracks. I looked at one house with a really bad animal smell and passed because all of the flooring would have had to be replaced and the house repainted.

See, that's funny. I see the same house and I think money. In fact, I bought a house once years ago I still call the "cat piss house". The smell was so bad when you went in it would be like an instant asthma attack. But I got it really cheap, and I factored in the idea of tearing all floors and bottom half of walls out to solve the problem. In reality, my flooring contractor (all hardwood floors) was able to sand the smell out of it - and let me tell you, you've never smelled anything like freshly sanded cat piss - and 98% of the stains, and put down 3 nice thick coats of polyurethane, and the smell was completely gone at the end and never came back.
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Skyline Properties
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16 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
Quote from @Heather Hatcher:

@Dong Yan If it's the perfect property and only the side yard fence is facing the street, there are things you can do to limit sound. I have a rental also close to a street, similar situation. First, we replaced the window. Second, we created a barrier between the wall and fence with plants and soundproofing mats. Last tip, we provided the tenants with white noise type equipment! One is a small fountain and the other is a tower fan. It has worked great and there haven't been any issues!
If these things can potentially help, I would consider the deal if the numbers make sense and it's too good to pass up.
Mahalo,

One thing I have found over the years is to be careful that you don't let your own prejudices and biases cloud your judgement on what others may consider suitable rentals. I own a house on a dead end street that has a railroad repair line (where they drag a few train cars for repair to the shop) on the back property line and an interstate highway on the other property line, and even though I would never live there and think the noise is terrible a lot of the time (no sound barriers anywhere, though I have trees and bushes), I have never had a penny of trouble renting this house and have had some long term tenants in there who told me the sound of the highway put them to sleep.
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Skyline Properties
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8 Reply

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