If you don’t already own a property, you may want to work with a real estate professional who’s solely in the business of buying and selling properties. Alternatives to find a property or land to build on include land banks, community development (CD) offices, community development corporations (CDCs), neighborhood community-based nonprofits and municipal industrial development agencies (IDAs).

Your building’s location has an impact on your operating costs and income. A professional market analysis will provide in-depth information, but you may find the same information online for free. You can use comparable properties (comps) to ensure you are purchasing the property at a fair price and to determine what you’re likely to be able to charge for rent. Details to research: access to transportation, local economic characteristics, zoning, demographics, crime and comparable properties’ rents, expenses, taxes, size and amenities.

Every city has rules about how buildings should be constructed and maintained (building codes) and where they can be built (zoning), as well as preferences for development in certain areas. Because these vary greatly, your best source of information is someone who works for a particular municipality itself.

Ballparking costs by developing pro formas helps determine if your project meets your lender’s feasibility criteria. Pro forma calculations are generally done on two separate spreadsheets referred to as “Income and Expense Statements” (I&E) and “Construction or Rehabilitation Budgets.” The projections in your initial calculations may evolve throughout the project as conditions change or new considerations emerge. For details on how to set up your I&E and Construction or Rehabilitation Budget, please download the full-length Start Small guide.