Do You Need a Final Walk Through for Multifamily?

5 Replies

Hi BP,

I have two multifamily deals (one at $3.3MM in MA) and a smaller one but more unit count in MD. Is final walk through typically skipped because tenants occupy the units? Or is it done as typically done in residential purchases?

Thanks!

I would do a final walkthrough. In case tenants trashed it or some other issue, you’ll know about it and can go back to the sellers. Hopefully, no issues!

Thank you for the input, Chris. 

Originally posted by @Chris Mentch :

I would do a final walkthrough. In case tenants trashed it or some other issue, you’ll know about it and can go back to the sellers. Hopefully, no issues!

@Weina Shi   You should only do a final walk-through if you care that the condition of the property is in the same condition in which you agreed to buy it.

It's like my dentist.  He says that you should only floss those teeth that you want to keep.

In other words, YES, YES, YES - you should absolutely do a final walk-through.  

If there has been any subsequent damage since the offer was accepted, you should do a hold-back for enough to make whatever happened right.  That includes an amount sufficient to evict a tenant who refused to leave before title transfers, damage, cleanouts, etc.

Charlie MacPherson, Real Estate Agent in MA (#9532146)
781-412-4151

Definitely do a walk through. No reason not to.

When you say final walkthrough I assume that means you've done at least one walkthrough during your due diligence period? In that case I don't think it is necessary to do it again since you're talking about just a few weeks between DD and closing. But for sure you should have walked through the property, unit by unit, regardless if it is currently occupied by a tenant or not. And you should be walking through it with at least a few trades people and the GC you plan to use to fix up the property.

To protect yourself your PSA should say that the property should be in the same condition at closing as it is at the signing of the PSA, aside from wear and tear.

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