Finding the right property can oftentimes feel like a lost treasure hunt. That said, it is a critical step in your real estate investment journey; understanding the factors that go into selecting the right property will ensure you start on the right foot. Here are some key factors to consider before making a purchase:

The Importance of Buying Right: The adage "you make all your money when you buy" holds true. The market will dictate the rents and the property won't change from when you tour it to when you need to make repairs you should have caught during the inspection. Ensure you buy at the right price with the right assumptions, using the most accurate historical expenses.

Location! Location! Location!: You need to buy where people want to live. Ensure your chosen location has a growing population, rising incomes, and an overall positive outlook. Research the area's crime rates, demographics, and future outlook. A growing community with strong infrastructure will lead to higher demand for rental properties, higher rents, lower turnover, and more income for you!

Understanding the Greater Area: Take the time to research the area’s future. Are businesses growing there? Are schools and transportation systems being expanded? If you plan to hire property managers, contractors, or other local professionals, consider their preferences and whether they’re comfortable working in the area.

Demand and Vacancy Rates: You Need People! Buy properties in high demand, low vacancy rates, and high absorption rates on new construction. Look for locations where people want to live and where there aren't endless options for apartments or homes. You do not want to struggle with getting market-rate rents or having extended turnover times.

NEVER skip the Inspections: Investing in a property without a thorough inspection is a huge mistake. Get an inspection and know the property inside and out. If you're not an expert, hire one to help protect your significant financial investment. If you're looking at multi-family, walk Every. Single. Unit.

Look For Hidden Gems: Keep an eye out for unique opportunities that could add value to your property (or hurt your property). I once bought a property just before a federal grant rebuilt the entire road, added new sidewalks, and improved utilities—all at no cost to me. (WooHoo!) These can positively impact your property's value and future rents. These “Black Swan” opportunities can be a game-changer, hopefully for the good, but if a sewage treatment plant is planned for next door in 5 years, you will want to know that too!

Ahh, The “Performa”: Never buy based on the listing broker's Performa. It's often too optimistic, and I am using it graciously to all the brokers. You can trust much of it, but verify everything and use your own numbers. I can almost guarantee you will be changing some of the assumptions made by the listing broker. Utilize your broker and property manager to verify your assumptions and modifications to the Performa before making a purchase decision.

Paying for Completed Work: If the asking price is based on rents that "could be" achieved after renovations, be wary. Pay a fair price for the property's current condition, not what the seller hopes to achieve. If you plan to complete renovations, ensure you get a discount to account for the work you'll need.

Finding the perfect property requires more than just an eye for opportunity—it’s about due diligence, patience, and a solid understanding of the market. These guidelines are a brief start; when you combine them with your team, you’ll be in a much stronger position to make an informed investment. Remember, real estate is about long-term success, so take the time to find the right deal that sets you up for success.