5 IMPORTANT FACTORS TO THINK ABOUT WHEN LOOKING FOR YOUR NEXT INVESTMENT PROPERTY

Dana on July 23, 2020

5 IMPORTANT FACTORS TO THINK ABOUT WHEN LOOKING FOR YOUR NEXT INVESTMENT PROPERTY

Seabourn Cove Exterior
 

You think you’ve found the perfect investment property. But how do you know it is “the one”? When researching new investment properties, it is important to keep in mind a few important factors.

Motivation to Sell

Asking what the motivation is to sell the investment property in question plays an important role in the sales process. The sale of large investments, such as a multifamily property, is a strategic transaction and shapes the outcome of the sale.

Simple questions such as why the seller is selling can aid in determining if you are wasting your time offering below list price.

History

It is imperative to obtain a list of all repairs and capital improvements, if any, that have been completed on the property over the past ten years.

Knowledge of previous repairs will better allow you to calendar out when future repairs and/or replacements will be needed. This will assist in estimating future costs that may be incurred.

Bring in the Experts

 

Hire your own expert inspector before purchasing a property. By obtaining an independent review from the seller’s inspection reports

If you choose not to, you may save some time and money in the short term, but should a problem appear later on that could have been caught before the sale was finalized, you will have to take on the financial responsibility to cover the repairs and maintenance.

Talk to the Neighbors

Who knows better about the area and possibly the property itself than the neighbors?  Neighboring communities and business owners can provide valuable insight as to the market and about the property itself.  They may disclose material facts that the seller might not think are important to mention.  

Take the time to drive through the city in which the property resides, as well as some neighboring towns to get an idea of “a typical day at the property”.  

Are There Any Major Repairs?

Asking if there are any major repairs ahead of time can give you an idea of capital outlay above and beyond the sale price of the property itself.  If there are some major repairs pending, you may be able to request credits if the seller is unwilling or unable to do the repairs him/herself.

It is so important to do your due diligence before committing to a large investment such as a multifamily property.  Above are just a few factors to look for when researching your next investment property. 

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