Things we’re always careful of within our general due-diligence process:
-Future tax assessments
-Potential of rising insurance costs
-Bad corridors within otherwise good neighborhoods (crime, noise, traffic)
-Environmental issues (was the neighboring property once a gas station?)
-Encumbrances
-Un-permitted renovations
-Shared utility meters
-True rents vs. projected rents (numbers need to work with the current market rates)
-Building materials and remediation costs (lead paint, asbestos, cast iron, knob and tube)
-Depressed pockets of land (that become the run-off sight for your neighbor)
-Contingencies (never know what’s behind those walls)
-Current and pipeline of inventory around the asset
-Property's ability to withstand a ~20-25% decrease in gross income