We are in the process of purchasing our first Multifamily, 4 buildings, a 24 plex, a 6 plex, 5 plex, and 8 plex. Wondering what detail of inspections is common. Cost adds up quickly. Is checking the gas line advised? uncommon problem but expensive fix if there is a problem. Same with sewer line. Should we have an inspector walk through every unit? 43 total units.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
I would advise against hiring an inspector to walk every unit. I would have them walk between 6-10 units, common areas, roofs, mechanicals, etc. I would have yourself and your property manager walk all of the units. You could also have a contractor walk with you or pay a company that provides due diligence inspections.
Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
8y
Yes have inspection walk through every unit. depend on location this could start at $150 per unit checking main large items (Roof, HVAC, Water heaters, Electric etc) to bulk price to inspect them all.
its worth looking at it if the main inspector cant do it or think it should be done, depend on the age of the buildings...
you can always get a quote to check the gas and sewer from the right contractor.
Professional · Evans, GA · Member since 2017 · 28 posts · 8 votes
8y
@Marysue Connelly definitely walk every single unit. That is something that you can do personally. Take notes of the big ticket items, such as appliances, kitchen cabinets, HVAC, flooring, etc. I backed out of a property once before due to broken sewer lines, it would back up into the apartments causing floods. The answer to your last question depends on how comfortable you are to inspect yourself. Now if the building is older, you will have to get someone to check on lead and asbestos.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
8y
@Marysue Connelly Wow! 43 units is your first MF? How about some background on you, and this great deal?
As to the inspection process get a licensed inspector, walk the units with him/her and have everything checked out. Video and make notes. Great opportunity to meet some of your prospective tenants. We introduce ourselves as PM's and not owners, if at all. Ask for an estimate of fees too. I have paid 1200 dollars for a 12 unit and 1500 dollars for a 20 unit by the same inspector, so they vary by the building-age and equipment, roof etc. Generally the extent of the inspection.
It is our 1st multi family. We have since dropped the 6 plex and the 8 plex after walking through every unit on inspection. Great advice. We close next month. We are anxious but excited. Beginning to finalize with property manager and price insurance.
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
I would advise against hiring an inspector to walk every unit. I would have them walk between 6-10 units, common areas, roofs, mechanicals, etc. I would have yourself and your property manager walk all of the units. You could also have a contractor walk with you or pay a company that provides due diligence inspections.
Investor · Pompano Beach, FL · Member since 2017 · 15 posts · 10 votes
8y
Hi
Make sure that you walk thru every unit, as the one or two that you don't get into, (they may have" lost" the keys) may have a hoarder tenant (which can be very costly to fix) or a utility apartment that contains construction materials and is not suitable to rent.
Rental Property Investor · USA / NZ · Member since 2016 · 1k+ posts · 812 votes
8y
Some put a clause in the agreement that the seller credit back $25k off the price for each unit there is no access to. Ie. the unit maybe damaged or not rent ready so this allow for that contingency.
I agree though, have all units inspected, or put a clause that allows toy to delay closing until then.
We have now closed on our multifamily. We did have an inspector walk every unit. If I had to do it again I might hire a contractor to walk through all units w/ me and an inspector to walk through a few and the roof and exterior. The inspectors seem to find small things not to code but items you may not even need to fix. A contractor would see those and can give pricing on what you might want to change / improve. One thing we didn't do but definitely should have is a pest inspection. I now know a company who would have done it for free and saved us $$ in pest removal now. Definitely ask the tenants about bug issues.