Hey everyone, I want to say thank you for all the great advice this forum has given me so far. Im trying to buy my first 4plex right now. The seller has given an estimate for what he pays for gas/water/electric. Whats the best way to verify these numbers if any? Thanks again everyone
Realtor · Tampa, FL · Member since 2015 · 78 posts · 32 votes
5y
I would just ask the owner for documentation of the statements. Utilities are public record and you may be able to put in a records request for that specific address.
Realtor · Tampa, FL · Member since 2015 · 78 posts · 32 votes
5y
I would just ask the owner for documentation of the statements. Utilities are public record and you may be able to put in a records request for that specific address.
I had success asking for Schedule E from the sellers. Try going in with the argument that you don’t care with the bills are as long as you know what you are dealing with. A lot of high utility bills have an explanation and a solution. You can always walk after seeing the actual. - Dan
Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
5y
Some places the utility company will tell you the past year or two of utilities. However that may or may not be useful. Example, a house is being rehabbed, no one actually lives there so the numbers may be low. The person has a hobby that uses a lot of electricity. My mom and aunt grew African Violets from seeds and they both had sooo many gro lights and used so much electricity. The police once checked my mom out to see if she had a pot grow going on because she came up on a list of excessive utility users between the pool for the water and her violet plants. And they could see the lights all night. Also appliances will greatly change the numbers, energy efficient HVAC, frig, etc.
Real Estate Agent · Freehold, NJ · Member since 2018 · 115 posts · 49 votes
5y
@NIcholas Hamel
Looks like everyone has pretty much answered this, but it’s public records. So if the seller doesn’t provide docs (which they should be able to) you can call the companies and they should be able to tell you!
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
@NIcholas Hamel you can request a schedule C and tell them to black out any other properties on there. If they don't want to share this information, you can ask for signed financial statement. So instead of an estimate of utilities, they list the exact amount and sign legally a declaration stating it is truthful.
Years ago, the utility companies would provide this, but most no longer share this due to privacy concerns. You can ask them to provide a "budget amount". That is not the precise amount, but rather an average using last years usage.
Ultimately, the location, size of building, number of occupants and furnace/hot water heater type should allow you to estimate these expenses.
Specialist · Chicago · Member since 2021 · 45 posts · 22 votes
5y
The public record tip is right. One additional thing you could do though.
If the 4plex is near you, I'd suggest knocking on the neighbor's door. Tell them you are looking about buying in the neighborhood and would they mind sharing with you what their utility cost is?
9 times out of 10, they verify what the public records will say.
The one other time: you'll find out that the neighbor bill is way lower than what the records say your new property pays. In that case, it means your property has something wrong, like a leak.
Easy five minute investment, but could save a ton of money