What to look for?

[Chris Gylseth]

We are currently looking at a multi-family apartment building with 8 units + 1 business unit. The numbers look decent, with an estimated cap rate at 15% and monthly net profits at about $700. Although seller has not explicitly said so, I believe there is a bit of upfront equity as well, since the property is listed for $400k, but the insurance value from 1 year ago is at $600k. Before I bring in any inspectors or appraisers we are planning to look at the property ourselves just to asses if it will still be of interest to us.

My question, since this would be our first deal, is what should we keep in mind when doing our own inspection? I know that we need to look at obvious needs for repair, get both income and expense statements, copies of leases, etc. and that we should have a professional inspector to uncover any potential surprises, but before even all that, is there anything in particular that you are looking for that you consider immediate red flags when you assess your investment options?