I toured the place with some friends of mine – a couple that was interested in getting into real estate. They wrote the place off from the moment they walked in the door. But when I saw those bulges and cracks I saw one thing: money. Foundation problems scare off most investors, which decreases competition and can soften up pricing.
But how to evaluate a deal like this? Or any deal, for that matter? Personally, I break the considerations down into two categories:
• Quantitative: How do I expect the property to perform as an investment? For this part I can whip out my calculator, or my spreadsheet, or my evaluation software and run some numbers.
• Qualitative: I have to ask myself “can I pull it off?” If you’re like the vast majority of real estate investors, then you’re a part-timer. That means you’re going to have to tackle this project on top of your “day job” and manage it afterwards. This part of the analysis will take some soul searching; a calculator isn’t going to help you here.