There was an instance before of one investor I knew who bought a house at auction.When the city annexed the area years ago houses had the option of connected to the street sewer and the city did it but it costs many thousands of dollars.This particular property owner connected to the street themselves without telling the city.So the new owner buys it and city wants to impose unknown usage charges and fines for years of illegal hook up.The property was having bathtub and drain issues and at first the new buyer couldn't figure out what was going on.The previous owner didn't also decommission the old sewage tank properly.The city worked with them to refix the line but they still had to pay reduced fines etc.

Jonathan look up the taxes and divide by 12 to get monthly tax costs.Look for the HOA docs to see if there is an assessment and how much.Usually if you find a listing on MLS in that subdivision there will be some houses and it will list association dues monthly or yearly.For instance if taxes are 1,000 and HOA 1,500 then you have about 208.33 a month in costs.If you buy for 4,000 and hold for 2 years you have to get at least 9,000 in 2 years time to break even and even more with closing costs etc.That money will be dead not generating a return for you.You also need to know the soil sample and build ability of the lot.This will be a factor from who buys from you if they want to build a house.On the MLS you can see what developed lots are selling for.Is this lot developed and cleared with pipes sticking out of the ground or does it still have all the trees and uncleared and ungraded in it's natural state??

All of these things along with unit mix and being multi level or one one level and location can affect what rent rates you will get and how long to lease up the new building (absorption).For instance usually a 200 to 300 unit apartment building is constructed in phases and takes a few years to fill up.

As a borrower, it's important to know this so ask as this information can go a longs ways in preventing headaches down the road.For instance, just because a bank my close SBA loans doesn't mean they'll fund every single deal that is an SBA candidate, has PLP status with the SBA, or doesn't impose their own overlays that superscede what what the SBA will allow.

If you want to grow your portfolio it might be harder to pay off properties quickly unless you have lots of income or are liquidating other assets.Most investors on here advocate using small down payments and securing 30 year mortgages and not prepaying them.

For instance, an entrepreneur looking to set up a new car dealership needs to consider where established dealerships are located and set up shop nearby.

Then theres instances like Rob K brings up.

It needed a furnace heater installed as it didn't have one or the venting needed for it, the water heater was in the kitchen not separated by any walls, a giant tree was growing into the foundation causing it to be very bumpy and cracked, about 1/4 of the INSIDE of the house was stuccoed, and a lot of the house wan't up to code.So, it was basically a brand new house needing to be built.

Obviously, you want to docment your own costs.For instance, I have a condo I "inherited thru marriage."

For instance, Bank of America had a freeze on foreclosures in all 50 states.