Looking at my first investment property

[Sastry Konduri]

Hi RE Gurus,

I am meeting the owner and the Agent of a Multifamily home this coming Sunday. It would be really helpful if the experienced folks here could suggest me some important questions to ask and the kind of paperwork I need to ask for.

Thanks in Advance,

Sastry.

[Baylus D. Nicholson]

Hey, Mr. Konduri

I believe multi-family building are the best way to go as far as real estate investing. Over all they are perfect for me and my goals as far as cash flow and increasing value. some typical questing I want answered are;

1. 1. What are the current rents per unit? (Ask your self if the units are over/under priced for the market.)
2. 2. What are the vacancy rates? (A really high vacancy rate could indicate a problem, you could probably fix to increase the over all value of the building . A low vacancy rate can mean good cash flow.)
3. 3. Are the units separately metered? (If they are GOOD! you can pass along the cost of utilities to the tenants. If not, I would see if it would be possible to get that done, other wise it will cause headaches with billing tenants.)
4. 4. Could you possibly live in one of the units? (The best way to get bang for your buck is to house hack a property. judging by the fact this is your first investment property, this is a great way to get financing with an FHA loan with 3.5% down, and to cut out most if not all of your living expenses.)
5. 5. Ask tenants if they experience any problems with how the property is managed. (Fix whatever problems they have. If you can make your tenants feel more valued, they happier they will be, the longer they will stay, and the more rent you can collect.)

I hope things work out well for you on Sunday. If things do work out be sure to post a success story because I know I would love to hear it. Good luck!