The Trip Wires

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