What are the top 5 things yall look for when it comes to Buy N Hold opportunities or Fix N Flip opportunities?
Wanted to pick some your brain on this topic :)
@Kevin Kim the top 5 things on a BRRRR are as follows:
- Acquisition Costs
- Renovation Costs
- Holding Costs
- Lending Terms
- Rental Income
Now there's a lot to each of those but that pretty much sums it up.
- @Kevin Kim From the perspective of just walking the property. Things I like to see.
- 1. Vinyl or brick siding. If brick does it need jointing?
- 2. Newer Roof
- 3. New windows(not wood)
- 4. Windows wrapped in aluminum
- 5. Separate electric meters(if multi)
- 6. Gas meter(instead of oil)
- 7. No large trees. Roots can damage water and sewer and the property itself
- 8. Effective water run off! make sure it has gutters and they are working properly. Sometimes seeing a home while its raining is a great thing.
- 1. level floors(some sloping is natural in older homes)
- 2. lay out. Do you have to go through one room bedroom to get to the next?
- can you take out a wall to open up space if needed?
- can you add bed/bath in basement or attic?
- 3. Basement condition. This is big as the basement will generally tell you the most about the house.
- Does it flood?
- can you see termite damage? or other structural warning signs like large notches cut out of floor joists to run conduit?
- 4.Upgraded electric? knob and tube with fuses or romex with breakers
- 5. Sewage line? is it cast iron or PVC. Cast iron will have to be replaced one day
- 6. New furnace? does it actually work?
- 7. Water heater?
- 8. washer dryer hook up?
Note that a property does not have to meet all these requirements. If it did you might be looking at new construction and it might not be a deal at all. These are all items that will add value to the property. Its the job of the investor to determine if it has enough good qualities to purchase it at said price to achieve the return the investor wants. Its a balance and will take time to figure out what works best for you.
Hope this helps
Buy and Hold:
- Demand for the area
- Tenant base I want to work with
- Not in flood zone
@Austen Mueller That is a fantastic list! Copying and pasting it to send to my investors and for myself :)
I know 3 of them
Location, Location, Location this simple method will save a lot of investors who are looking to be landlords.
1. Cost to heat
2. Cost of property taxes
In my area heating costs can vary wildly from one property to another.
Also, taxes can be $3,500 for one building and $5,800 for a similar building turning a strong cash flowing property into a base hit.