Help me know what I don't know I don't know

[John Blythe]

Hey all,

Thanks for checking out my post. I'm brand new to REI and am taking in a ton via reading, podcasts, and forum discussions. As you well know there is quite a bit of information floating around out there and it's overwhelming in part. As a result, while I may know certain principles, ideas, and concepts, I don't know how to spot them necessarily when a property/deal is right in front of me.

My goal is to do multi-family housing, 2-4 units for the first few years till I'm comfortable throwing around larger sums of money via commercial/large apartment opportunities. I honestly don't even care about much cash flow at this point so long as I don't blow what money I have saved up in a crash-and-burn scenario with our first few properties. Learning without it costing us too much going in the red, more or less.

With all that said, could these are some properties Zillow threw my way that I'd love some basic feedback on. It doesn't have to be thorough, I just want to know what red flags and opportunities a trained eye can see when looking at this for just a couple minutes.

http://www.zillow.com/homedetails/2858-Boulevard-P...

http://www.zillow.com/homedetails/5928-Devington-R...

Thanks for any assistance, wisdom, advice, and feedback!

Best,

[Jeff B.]

Originally posted by @John Blythe:

Hey all,

 As you well know there is quite a bit of information floating around out there and it's overwhelming in part. As a result, while I may know certain principles, ideas, and concepts, I don't know how to spot them necessarily when a property/deal is right in front of me. 

Appears you want to buy&hold which will be different than BRRR, flip, auction, pre-foreclosure ...

First get a handle on the performance metrics of rentals:

GRM, GSI, NOI, DSCR, C/C and C/R - - these measure the productivity of the property - - the ROI. Investing into a negative cash flow is crazy, if only because you ought to be paid for your effort. Treat appreciation of the property value as a dessert as you can't get to it until the end of the meal (aka sell).

Next look at two factors, the neighborhood of each property and the market you/it serves.  For myself, I chose blue collar areas and 2+ bedrooms, near schools (not colleges per se).  Families are a good bet and yuppie singles are poor bets.

Give consideration to areas of job growth and low vacancies over smaller markets with declining populations and job growth.