In its current state:Current NOI: $79,058 (based on 80% occupancy).Current Cap Rate (at $1.25M): 6.32%, reflecting the property’s as-is performance.Value at a 7.5% Cap Rate (Market): $1.05M, based on current NOI.Given the renovations, vacancies, and risks tied to stabilizing the property, I’m considering offering $850K to reflect its current state and value-add potential.

The requirement to do this generally involves an experienced GC signing on the borrowing entity as a 20+% owner thus making them a signatory on the loan and responsible for the debt which in most cases is not very easy to find.

Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers.

So there is increased risk. 

There are few places that I think have a higher fire risk.

Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers.

There is a lot of training involved, it takes months (up to 2 years), and they usually like to start them off as puppies.

Look up the default risk by credit score, this information is readily available online. 

Now investors, especially the newbies, are chasing returns by going after higher risk investments - many NOT really understanding the true risks.Many more investors will be losing money and choosing to liquidate real estate - which will be buying opportunities for the better prepared investors.

With online access to almost every jurisdictions property recordings, lenders today use software that automatically searches property transfers for transfers involving their loans.