Following any general rule is only going to get you in trouble. Also comparing investment properties in different locations is the same as comparing apples to oranges. If you list where you are looking to purchase someone who invests in that area may be able to help you a bit with the market.
To figure out whether you have a good deal you need to 1) dig into the numbers to determine cash flow 2) inspect the property to determine overall condition and needed repairs and 3) analyze the market you will be renting in. Messing up just one of these 3 steps can land you with a poor investment.
If you are really unsure I would recommend you talk to a realtor who works in the area and have them help you. You can use BP members to try and help make sense of an investment but from our computer screen we can't tell you that the furnace will need to be replaced next year or that it will cost $30k to replace the parking lot.
Don't get too excited and jump at something too quickly. Chances are there is a reason the price looks better :)
That is great advice from John.
The last thing you want is to think you bought a property 2% DSCR and having to stick every penny into repairs. Having to remodel a bath, putting on a new roof, siding, AC unit, etc will eat up all your cash flow in a hurry!
Inspect the building and then each unit and layout a list of what will need to be done each year and an approximate cost. This isn't a bullet proof way but will give you a better idea of what you expected the cash flow to be and what it actually will be.
Both are right on. You need to develop a project specific pro forma then you can review using some standard ratios
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