I am beginning to do walk throughs on small multifamily (2-4 unit) properties that I have done analysis and pro forma due diligence on. If the numbers make sense, I am doing a walk thru with my contractor. My contractor does ask a lot of good questions, however, I am wondering what other Buy and Hold investors look for and questions you may ask while doing a walk through? I am buying through FHA owner occupied route, so most properties are in near turn key conditions that I am looking at. What questions should I be asking? What red flags should I be looking for? I want to make sure I am confident to move to the next step of making an offer, and confident that it will pass FHA inspections.
exciting time, Jared....I could go on and on, and the inspection will be key, too, but just first impressions: look at all the major systems and components and their useful life;that is key... Some rental owners have active maintenance programs and actually have reserves or means to replace worn out roofs, driveways, windows, hvac, plumbing, etc some not so much..Without going in to too much detail, does it look on first glance like they milked the property and are looking to pass all the deferred maintenance and major replacement costs on the next owner? Other red flags....Look out for moisture issues, too. And do it yourself gone wrong unpermitted work can be easy to spot and a red flag. Your contractor may spot any major structural issues. Then, course, intractable problems like bad neighbors or neighborhoods are key, too. You might even have some parameters develop in your search like building age or condition to look at. General rent- ability is also important in terms of unit layout, parking, laundry, accessibility, etc...best of luck
Make sure to check how many gas and water meters there are. Make sure there are as many as units (unless landlord pays utilities).
Find out how common areas are shared/run/storage rented etc.
If there is a laundry room find out if there are coin operated machines and who is maintaining them. If there are regular machines, find out who is maintaining those or if they belong to any particular tenant.
Maybe should be done before an inspection, but check to make sure that the subdivision of the building is legal and all units are allowed. (sometimes people make attics into apt but that is not legal in certain places, etc etc).