What We Will and Will Not Lend On: Bad foundations, mold, asbestos, substandard, and/or fire damage?

The real estate investing industry uses "Classes" to rank property performance risk, but there's NO agreed upon industry model:(Here's what we use for our Metro Detroit market:Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Liquidated DamagesIf the Subcontractor fails to complete the work by the agreed completion date, liquidated damages of $[Insert Amount] per day will apply.

So adding this to my prospecting plan may provide reach to do deals that I may not have had before simply circling the usual watering holes.

It generally isn't worth the brain damage of experimenting though....especially if you want to move to a new home that you will own inside of the typical lender's seasoning period.

The interior will need to be repaired and repainted.I've done several 1900 - 1920's and while they usually have good bones, the electrical can be underpowered for today's needs, and the water lines can be corroded galvanized or even lead.

Water heaters, furnaces, flooring, etc etc, all these things have known life expectancies.

When there is a sum of money in the bank, I’d rather buy another property than pay for fire damage, and I’m happier with the insurance coverage.  

Here's some basic copy & paste info that may help you make better investing decisions:----------------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

@Isaac Terry Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?