What are the potential pitfalls with 6+ family rehabs?

[Andy Kurtz]

I've found a potential deal, but I don't know what I don't know when it comes to investing in 6+ unit buildings. Found a bank owned 6 family in a rural C+ area in New Hampshire. Property is boarded up, and needs massive rehab. Electrical and roof are newer, which is a nice plus. The bank recently dropped the price by 50%, to $50k. Assuming a rehab of $20k/unit, the rents in the area would make this a cash cow, as the units could each fetch $750 with ease. My concern is, I'm afraid there's a hidden surprise that would only be uncovered by performing an expensive environmental cert. My questions are twofold - #1 - what are the worst possible pitfalls that are typically missed by the naked eye? #2 - is there a way to tell, through public records, if there's something buried underground that would cause a problem? Thanks for your input.

[Ann Bellamy]

Aside from what @Jennifer Lee and @Raymond McGill mentioned, this will require commercial financing, and understand that commercial financing is a different animal.  

1.  Your loan is going to be too small to interest most banks that do commercial lending.  Even those who lend up in that area.  

2.  Commercial appraisals are not $400, they are $500-$2500 (or thereabouts for a project of this size)

3.  They may require a phase 1 environmental

4.  Origination points are paid at the time of application, frequently.  Not at close.

In the rural areas of NH, the issue is the tenant base and lack of jobs.  So screening is paramount, and even then, you will run into issues.  Depends on where it is.