My First Multifamily...Am I asking enough?

3 Replies

I have come across a deal that from my analysis is a great buy especially if I buy with cash as i'm looking at a 15-20% discount from the current asking price possibly more. I'm toying around with several ways of financing the property right now but most of that is besides the point. But before I go any further and place an offer I am wondering if I am asking enough questions? I viewed the property today and it's in great shape apart from few minor fixes that wouldn't require much money or work as I could do most all of it myself. There is one potential deal breaker but I will find out when she emails me back within the hour. Unfortunately the property manager does strictly maintenance and seemed to lack the knowledge of a lot of the questions I had. I sent the landlord a list of my questions. Some I know the answers to so I did not ask and others I am double checking what the property manager told me and making sure I have all my ducks in a row. I would really appreciate some feedback as to whether or not i'm asking enough questions and if there is anything else I should be asking or anything I should be making sure to ask the inspector when I have it professionally inspected before closing (assuming it goes that far). Below is a copy of the Email I sent any and all advice is welcome and much appreciated!

Dana,

I do feel the property is well maintained for the most part. There were no glaring issues that I saw. Obviously I will need the property professionally inspected in the case I missed anything. I am interested in placing an offer on the property however before doing so I will need some more information. Below is a list of questions/requests that I have before I can accurately value the property.


What are the rents for each individual unit?
When are the individual leases up?
Are all the appliances included for each unit. (Refrigerator, Stove/Oven, A/C if the wall units are yours)

Is there or has there been any tenant arrears with current tenants?
What is the current mortgage on the property and is it assumable?
What are the yearly taxes and insurance?
Would you accept additional monies (above closing cost) to pay the closing costs up front so we may roll them into the mortgage?
What is your idea of a "huge" discount if I am to pay cash (rough % estimate)?

Any major repairs needed? (i.e. furnaces, water heaters, windows, roof)
How old is the electrical and plumbing?
How old are the windows and roof?
I noticed small water leaks in unit 4, has the roof been patched successfully fixing the leaks?
What was the cause of the leak?
Are there any public notices associated with the property?

Why are you selling?

Hey Christopher, I am also rather new to the real estate game and perhaps am not the best person to answer your question, however I have one you. I am a bit curious as to how you know that this property is a great buy if you don't know what the rents are, or the property taxes, etc? Those are all of the things you should know for your analysis, correct? But hopefully you get all of the answers you need, and good luck!

Joe

I'm used to buying foreclosures with absolutely no disclosure or information provided from the seller.  

If your seller answers all that you have requested I would still do my due diligence and double and triple check their responses.  I'd say you've covered your bases well with the questionnaire though.

Hi, Chris,

Find out when the property taxes were last assessed (local tax department can give you that info). If a while ago, the taxes could go up if it gets reassessed at a higher market value.

Good luck!