First Deal, what should info/documents should I ask from Seller?

Question

Ok.

I close on my first deal in about 20 days.  It works with the 2% rule, the numbers are decent but not amazing.  A duplex with 2 beds and a loft of each side. North of Pittsburgh.

One tenant is moving out next month maybe before i close, maybe right after I'm not sure.  That is fine because that side needs some windows replaced and a few minor fixes, which i will be able to do immediately after close.

My question is the only thing the seller (a recent divorcee, that doesn't want to be a landlord) has provided me, was a copy of lease of tenant moving out, and a letter to long term (10+yr) tenant informing her of a rent increase.  Now that we have finished all negotiations, and inspections etc, what should I request from her?  I was listening the podcast #61 and they said most of the info is BS anyway, but I'd really like to know as much as I can.

Any advise is appreciated... I'd like to have my agent request as soon as possible.

Steve Vaughan · Answer

Here the seller has to fill out a seller's disclosure form about the title and property.  It's called Form 17.  It's mandatory for all sellers of residential property (4 units or less) in WA and has a lot of info on it.  I would see if PA has the requirement or if they or the dept of licensing or realtor's association has one you could ask her to complete for you.

Have you done all title work already @Scott L.?  You know you are dealing with the vested owner with right to sell?  No other options or rights of refusal out there?  You know about all liens and encumbrances? Just making sure. Hate to see a gotcha come up.  Cheers!

Michael Pierri · Answer

It's been a long time since I listened to #61. I think most of the BS in MF is really more applicable to apts, and larger commercial deals. Meaning, if the seller is BS'ing you, it's an attempt to show the seller that CF is stronger than it really is, and thus getting the buyer to pay more for the property.  For commercial RE, one should request a Schedule E to verify the buyer's rental income with their tax documents.

Valuing a duplex should be more straightforward. You should be able to predict CF based on market rent of similar properties.

I don't think there is much else you really need from the seller. You can request a portion of their tax return to verify the rent roll for the duplex, but that seems highly unnecessary. Your market research on rent rates and your local market knowledge are more useful in evaluating the property, in my opinion.

Scott L. · Answer

No advice?