Hello BP Members,
I am looking at buying an investment property, as you may have guessed. I am looking into multi-unit rentals because I feel they have better returns, in general. First off, is that even true?
I have stumbled across a listing for a 7-unit (1 studio, 6 1/1s, across 3 buildings) property in my area. It was built in 1930 and sits between commercial complexes on 3 sides, 4th side is open to a local highway. I am intrigued by it on face value but I don't know how to move forward with even finding the needed information. The listing agent will not release any financial info without a contract. It is also owned currently by a company that is involved with real estate. I always wonder why a person/company that invests in property would sell a successful property...
So what I'm looking for is:
What information do I need to find out to see if I want to move forward with a contract?
If I do want to move forward, how should I structure a contract to provide me maximum contingency options and protections?
Both very good questions!
Before moving forward with the property, you want to at least see historical financials (ask for the trailing 12 month financials, rent roll, and anything else the seller is willing to share). At a very minimum, they should be able to provide you with a historical/current rent roll. If not, run in the opposite direction.
If they're trying to get you under contract before providing you with any information, that's typically a red flag. If they want you to sign a non-disclosure agreement, that's perfectly normal. As far as the structuring of a contract goes, my best advice is to enlist the aid of a local broker who specializes in working as a buyer's agent and can put together a contract with your best interests in mind (and maybe get you a better deal).
Best of luck, Martin!
Thanks Matt. Appreciate the feedback. I understand the seller/listing agent wanting to avoid tire kickers but I think if they aren't willing to at least give some pertinent information up front (fine with an NDA) then it's likely not worth it.
On the contract side, is it possible to write a contract shielded enough to the point where it is essentially contingent on certain returns/numbers?
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