After receiving my first leads yesterday, I immediately got to researching LEAD #2 (below) as thoroughly as possible. What did that entail? HOURS of Google Street View, crime stats (Trulia is good for this), zip code demographics (unitedstateszipcodes.org), comp sale prices, and news articles on the specific neighborhood.
What do I like about the property?
-The low all-in cost of $39,000
-A fresh renovation job = should be better in the long-run
-$600 in gross monthly rent seems good for the price
-Neighboring properties all have values in the $40,000+ range (according to Zillow)
-The neighborhood doesn't seem like a war zone (according to Google and Crime Stats)
Even with my independent research, I clearly had additional questions. I gave my Acquisitions Manager a call and asked:
1. Can you confirm the acquisition cost?
2. What goes into the rehab and what's the cost?
The Scope of Work has not been established yet. Staff haven't been able to get into the property as it was just acquired. However, this type of property typically gets brand new windows, new furnace, new water heater, new roof (or repairs), new electrical, paint touch up, and any other repairs needed to get it rent ready. Rehab estimate is about $15,000.
3. Can I see an inspection report?
That will be provided next week.
4. Does the property have a backyard that extends to the back alley?
(I noticed a potential large plot of land via Google Maps)
Yes, there is a backyard that extends to the back alley.
5. If I choose, can I replace the main water line from the street? (I asked because I was being overly cautious...I had nightmares of the water line busting and costing me a ton)
Yes, that can be negotiated once a renovation plan is discussed.
6. Can I see additional exterior and interior photos?
Yes, they will be provided.
The phone call ended on a positive note, but before I could pull the trigger, I requiring a few things in order to further pursue this property:
1. I want an inspection report.
2. I want additional photos.
3. I want details on the renovation scope of work.
According to the Acquisitions Manager I should have everything I requested by mid-next week. Could this house in Indianapolis soon be mine???
-It is TOUGH committing to your first property. You're going to have an endless number of questions. It's especially tough committing to a property you've never seen before!
-Due diligence is one of the most important steps in real estate investing. Understand the neighborhood, understand your expenses, understand your income, understand EVERYTHING!
-USE the BiggerPockets Real Estate Investment Calculators before you purchase and get a detailed report of the financials.