The Limits of Analyzing Properties On the Internet (part II)

Pictures vs. Reality

So it seemed I had come across an overlooked gem of a duplex for a number of reasons discussed in my prior post:

The Limits of Analyzing Properties on the Internet

Everything seemed to check out:

• the exterior property picture looked good
• the street looked good on Google Maps street view
• the indicated rents were below what Rentometer showed for the area
• the property looked to be separated from the rest of the questionable neighborhood
• Trulia's crime heat map did not indicate an elevated level of crime in the immediate area

I mentioned the property to our realtor several times and he was less than encouraging regarding the area but said would check it. Generally when he says he will check something out ,he does it within a day or two but he had not done anything on this place after a couple weeks.

Seeing Is Believing

We invest out of state but happened to be in our investment market this past weekend, so I figured why not drive by this place to see it for myself. As I mentioned in the prior post, based on the price, area and most importantly, our realtors opinion, I fully expected this property to be below our investment criteria. Despite knowing this, it really looked compelling based solely on what I saw on the internet.

When we exited the interstate to go to the street, we could already tell the area around the property was consistent with the "rough" descriptor used by our realtor. It was definitely a very distressed area with a number of homes in extreme disrepair or vacant/abandoned. The home on one side of the property had a completely collapsed front porch and was totally over grown. The actually property we were interested in looked far worse than in the pictures and appeared to have been vacant for some time. I did not even bother to get out of the car to peek inside the windows to see the internal condition but my guess is that it was not good.

No Substitute for Local Knowledge

If this property was actually in the condition it appeared to be in the photo and could earn the rent indicated, it would have been an unbelievable deal. Perhaps a more adventurous investor could have made this property work but it was too far down the quality food chain for us. Based on the appearance of the place, I would guess there was a lot of deferred maintenance and rehab required. I think getting quality tenants or really any tenants would be extremely challenging at any rent level. I would say lesson learned, but I have already learned this lesson. Finding great "deals" on the internet is much easier than finding good properties that truly meet your investment criteria. The internet is a great source for all kinds of real estate related information but is no substitute for local knowledge.