touring our first four properties... and I have questions

[DJ Cummins]

Happy Friday everyone!  So tomorrow we are touring our first four potential investment properties.  What are some good questions we should be asking the owners?  How long units have been vacant, how long other units leases are.  i have driven past all four multiple times.  We are looking at 2 4-plex, a duplex, and a sfr.  Also....one of the 4plex is owned by the agent, and been for sale nearly two years.  Inside of it looks great.  It is half brick half siding....definitely needs new sighting.  I really like this property but the asking price is a bit high for our first purchase.  The price is understandable for this property but the 20% down will use up about 75% of our starting capital.  How do you recommend I mention the seller carrying the second for the down payment or a portion of it?  Being owned by a fairly large group of family realators,  what are the chances they would agree to that?  Any suggestions are appreciated! !

dj cummins

[Bob Hines]

I won't even go look at anything listed by Eichelberger Realty.  They own enough of their own properties and also rehab that anything they are selling is complete junk.  There is another agency that I've seen list their own multis, GI International or something like that, and they have all been junk.  I'm not even sure how they ever passed the low bar of occupancy inspection they were that bad.  So buyer beware with realtor owned multis.  That said, I have a friend who is a Realtor that has sold some of her own properties that have been good buildings.  

Skipping the obvious, I always make sure to check out the following:

• Tuckpointing-is mortar popping out of the wall or missing or are there little chunks of concrete on the ground around the property?  This can be costly to remedy and adds no real monetary value for the big expense.
• Plumbing-is the stack cast iron?  How does it look?  Has it been redone?  Is it PVC to cast iron at the floor or PVC under the floor?  Any sign of sewer work-line of new concrete in basement, pvc sticking up in the yard?  I always get a sewer inspection as a contingency, it's best to know while you can still negotiate.  Are the water lines galvanized?  How old does HWH look?
• Electric-lots of old 60 amp services around.  Is it fuse or breaker?  Does it look like an old breaker panel?  Is it Federal Pacific?  How does the service entry wire look (wire from meter to panel)?  Are outlets 2 prong or 3 prong? Knob and tube?  How much room is there in the panel for expansion?
• Floors-are the floors slanted?  Is there hardwood underneath the flooring?  Do you think the flooring is in good enough shape to refinish?
• Roof-how does the roof look?  Any signs of water damage?
• HVAC-Boiler or forced air?  Central A/C?  How old does it look?

None of these are a basis to walk away from a deal but are some of the bigger things to look for which aren't as obvious as vinyl tile peeling.  I would rather spend $10k on a new kitchen and bath than tuckpointing and a sewer line.  One adds huge value and one basically offers none.

Will you be meeting with the owners to talk with them?  I can already tell you the vacancy answer: "Not long as they're easy to rent" or "I'm just keeping it vacant to show".  Just stick with facts, ask about age of roof, furnace, ac and copies of leases.  Confirm the condition yourself.  Nothing else will really matter coming from someone who has an interest in selling you the property.  The expenses and maintenance will always be "Low", trust me.

A question for you: What special knowledge or skills do you have that everybody else who has looked for an investment property in St. Louis over the last 2 years lack?  Maybe they just lowered the price but the multis I've been watching have been going under contract within a week or two of hitting the market lately.