What to Check on Multifamily Properties

When you are looking to #invest, a multifamily property is something that you need to take care of, and you should look at each of the diligence points. If you’re under contract when purchasing, looking at the contingencies related to the inspections does lower the risk. If there is something that is uncovered that wasn’t calculated, you can walk away from the investment, and there are certain must-haves when it comes to property inspections that you need to look into. Depending on what the deal is, you may want to check other elements, but here are the top ones to be looking out for.

 

First, check the #property #statement. This should be a 12 month one, because you never know what they may look like tomorrow. This will predict future performance in the best way, since it shows how it’s worked in the past. You can see the seasonal fluctuations as well, especially if you’re buying in an area you haven’t before.

 

Then there is the rent roll, which shows the rent schedule and what is due, and the amount received. You can see how long the lease duration is, and you want to make sure that these match up with the leases themselves.

 

Tax bills also tell you about the property in many cases, and you should always look into the current bills, and the ones that happened in the past. The date that they were paid too gives you motivation of the seller a well, especially since some country websites might also give you the calculators that you need to help you figure out how much the price will go up after you #buy.

 

Then there are leases. You should make sure that you have these so that everything is in place. You want to make sure there isn’t free rent and no leases that could be bad for you as a future landlord.

 

You should also look at the #services promised, and these are what you should make sure that you live up to. You might need to provide laundry, internet and the like, and you should look at the leases on these that you need to look into, cut, or negotiate with the people before you buy.

 

You should always look at the unit inspections that need to be done, which includes the common places, the exterior, and utilities, and while you don’t have to do it yourself it might be worth it. You should make sure that you have someone who knows what they’re doing to come with you to get a clean inspection on the place, along with issues.

 

You should also have contractor quotes on there for repairs and improvements. You should never guess these, even if you’re familiar with what they might be. You should get multiple different estimates for those that are bigger items, and you should put it all together to find out what you need.

 

You need to know the market as well. many commercial real estate investors like to work with a larger area and man than just a small little property. You should know the economics of the market, including the micro and #macroeconomics, and you should make sure that the property is getting bigger and growing, and that the population and the jobs are too. You should make sure as well that the crime levels are low, and that unemployment is below the average. You should look at the strength of the industry locally and see if it’s well-rounded or reliant on one sort of industry, and if that’s at risk, or if it’s okay.

 

If you’re worried about any of these, you should definitely get it all together so that you have a good idea of what you’re getting into as an investor with the property itself. By knowing this, you’ll definitely have some leverage on these, and you’ll be able to truly see what you’re going to get from this, so that you as an investor can figure out if you need to back out, or if you want to stay in this and end up putting your money into a multifamily property that you will fully own.

Done