What are your plans with the property? I look for different things for a flip then I do a buy and hold.
I can speak from the perspective of buy and hold.
I look for how much am I going to have to put into this property before renting and what that cost will be relative to what I want in cash flow.
What are the condition of the appliances, are there any, trees - how many and are they overhanging on the house which means I need to get my tree guy - I learned from a property I bought that had a nice yard but for living in it not renting since it's a cost to maintain, size 3/2 are good in my area and not so much 2/1 depending on the area - I live in a college town but a 2/1 in a family neighborhood isn't going to rent well, age recently for me as I lowered my range to include older, pre-1980 to 1960ish, homes so now I have to consider electrical and plumbing, overall condition of the property.
I can't speak for a fix and flip but I would suspect they may look at the property for "some" of the same things - maybe not.
thank you @Daria B. great feedback. I'm currently not focused on buy and holds but when I do move into that arena I can definitely use these tips!
Hey @Reed Starkey I will be rehabbing the property.
This is for apartment buildings, but you can easily transfer this to buying a SFH too.
In addition to the points below I look for future location. (What will the area look like in 10 years?), and school district.
Here are the 6 most important things you need to check for when buying an apartment building are:
1. Foundation (water leaks, cracks, tilting, exposed areas etc.)
2. Structure (settling, pest/termite, humidity/water etc.)
3. Roof (when was it last replaced?)
4. Plumbing (Cast iron, galvanized steel, polybuthelene, copper, pex)
5. Electrical (Copper, Aluminum, breaker boxes, GFCI)
6. Heating and Air (Maintenance, cooling aide, rodents etc.)
As a Rule of thumb, if the building was built after 1965 and before 1985 chances are that the builder used some kind of “innovative” (read cheap) solution trying to save money.
This includes aluminum wiring, vinyl or T-11 siding, galvanized steel piping, Polybutylene piping, double paned windows of dubious quality etc.
Avoid these products if you can. If you cannot avoid it, make sure this is in good shape when you buy the property. It can save you TONS of headaches down the road. Also confirm with your insurance company that they cover these issues (especially electrical aluminum wiring).
PS if you live in an area with air conditioning, be careful about the rules concerning Freon.
PS if you live in an area with pests, bugs, etc. you have to take extra care that you aren’t buying an infested property.
Want to learn more about how to find a good deal, and avoid losing money?
Check out www.theapartmentinvestor.com
(Almost) all that should matter is the numbers.
How much will it resell for? How much will it cost to fix it to the point where it will resell for that amount? And based on those two numbers, what is the expected profit and ROI?
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