Property Evaluation Criteria

[Leila Moussavi]

Hi BiggerPockets!

My name is Leila, and I'm a 19 year old college student looking to investing in a buy and hold property out of state. I would eventually like to become financially free by 30 years old, living off of rental income.

I am unable to quality for a conventional loan, but do have enough saved for a small down payment and some potential investors (family, friends) who would be willing to work some sort of deal out with me so I have the funding to purchase a property. Also they could be potential co-signers on a loan. I may even have a potential partner, as well. I am open to creative financing.

My game plan is to create a set list of criteria for properties, then research markets, then find an agent and analyze properties from there until I find one that fits my standards. So far my criteria looks like this:

• Neighborhood - B class

• Property size (square feet)

• SFH: 1100-1200
• Bed/Bath: SFH: 3 bed 2 bath
• MFH: ??
• Bed/bath: MFH: 1, 2, or 3 bed units? Bath? What's ideal?

• Lot size

• SFH: 6000 with 2 car garage
• MFH: What's a normal lot size?
  

• Property condition - ??

• Number of units - SFH or MFH (2, 3, or 4)

• Cap rate - ??

• Cash flow - 8-12% return

• Appreciation potential - ??

A. How would I determine if I want to invest in a MFH or SFH out of state? Does it depend on the market/location? MFH seems good for scaling and less risky as far as vacancies. I'm leaning towards MFH.

B. What criteria would you suggest I edit/add into my list above, keeping in mind my experience level and funding?

C. Any other extraneous advice from out of state investors would be more than helpful.

Thank you!