Buying Commercial Building - what to ask for?

Question

I'm looking to purchase my first commercial building and am in the process of narrowing it down and making the short list of which properties to pursue. My question is what do I ask for from the seller in terms of documentation and paperwork so I can determine if it's the right opportunity?

I've been reading different threads and have come up with the following so far:

- Rent Roll and leases (leases should answer the question below)

- Two years of utility bills (water, sewer trash) and who pays them.

- Financials: tax returns, P&L, bank statements.

- Three years of CapEx and Repairs.

- All permits/inspections for any work done.

- List of problems with the buildings (doubt there would be complete honesty here, but worth asking).

- Insurance policy.

If anyone has anything else to add, I'd love to hear it.

Stanley Bronstein · Answer

@Joshua Kaufman

I typically attach this to the Contract and give the Seller an agreed upon number of days to fill it out and to provide the info requested:

EXHIBIT “A”PROPERTY INFORMATION SHEET

1) Survey - Do you have an existing survey(s)?YES (Copy is attached)______ NO

2) Environmental - Do you have an existing report(s)?YES (Copy is attached)______ NO

3) Structural Inspection - Do you have an existing report(s)?YES (Copy is attached)______ NO

4) Soil and/or Drainage - Do you have an existing report(s)?YES (Copy is attached)______ NO

5) Fire Systems - Do you have an existing report(s)?YES (Copy is attached)______ NO

6) HVAC Inspection - Do you have an existing report(s)?YES (Copy is attached)______ NO

7) City/County - Have you had any correspondence with anygovernmental authorities in past 5 years?YES (Copy is attached)______ NO

8) Tenants - Have you had any tenants in the building inpast 5 years? If so, please provide details.YES (Info is attached)______ NO

9) Service Contracts - Are there any present service contractsfor the building?YES (Copy is attached)______ NO

10) Maintenance - Has any repair / maintenance work beendone on the building in the past 5 years?YES (Details are attached)______ NO

11) Use - What different types of uses have been in thebuilding during your time of ownership?YES (Details are attached)______ NO

12) Violations - Are you aware of any violations of governmentor assn rules or regulations pertaining to the building?YES (Details are attached)______ NO

13) Association - Have you had any correspondence withthe property association in past 5 years?YES (Copy is attached)______ NO

14) Taxes and Utilities - Please provide copies of tax andutility bills and any correspondence for past 3 years.YES (Copy is attached)

15) Flooding - Are you aware of any flooding or drainageissues pertaining to the building?YES (Details are attached)______ NO

16) Insurance - Have you filed any insurance claims on thebuilding in the past 5 years?YES (Details are attached)______ NO

17) Permits and Licenses - Please provide a copy of allpermits and licenses pertaining to the building.YES (Copy is attached)

Tim Johnson · Answer

Environmental Phase I or Phase II, you still have to do it for coverage but worth asking