KNOW YOUR BUYING CRITERIA

[Jason Malabute]

When I was buying SFH I had very, very, very basic criteria when it came to acquisition.All I cared was that I can be all in at 75% of ARV, B or C neighborhood, cashflow at least $100 a month, and ROI of anything over 6% I would accept. I literally did not care about anything else. I just wanted to get my foot in the door (and I did.... I bought 3 SFHs like that)

I learned by being around my mentor that apartment acquisitions require a stricter focus on criteria.  Here are a few (just a few ) of my criteria when buying an apartment deal:

1. B or C neighborhood in indianapolis

2. built between 1960-2000

3. 85% occupied (minmum)

4. 8-20n units

5. 50% of units should be at least 2 bedroom units

6. 4-7% cap

7. 12% roi (I'll go to 10%) and 15-20% irr

8. in certain college towns I want no more than 10% student tenants 

9. no crime areas

10. pay $30-60k per unit. No big ticket items to be replaced.

I'll explain how criteria protect the investor . For now, I want to tell you do not over ride  your criteria just to make the deal work. Stick to your criteria no matter what. Stay tuned!