Graduating to MF. Should I hire an inspector?

Question

I’ve rehabbed over 30+ homes and I just inspect/GC the projects, so more or less I know what to look for most of the time when I walk the properties. I’m not perfect, but I catch most of the larger CapEx repairs.

Recently picked up a 24 unit apartment complex (12 unit + 12 unit - 2 miles apart).

I hired an asbestos inspector. Otherwise do I need to hire an inspector for the rest of the general stuff? Is this necessary since this is my first MF?

Kevin Dean · Answer

@Anson Lau

I agree with @Greg Dickerson on this. Additionally, a professional property inspector will help you think about the quality of the current property manager, and will be able to point out areas of weakness and necessary improvement in the operations of the property. They will be able to go deeper than simply identifying issues with the structures themselves, and will be able to identify where management can improve maintenance on a regular and timely basis.

Furthermore, an experienced and professional property inspector should be able to tell you what does and does not check the boxes for the large institutional banks/agencies. Based on the financing you plan on using, the inspector should be able to tell you up front what they believe the bank will require to be fixed or updated either before or after you close on the property. This will directly effect the capital you need to close, the CapEx budget and ultimately the returns you generate.

Greg Dickerson · Answer

@Anson Lau Yes you should use a professional inspector as the owner will be less likely to accept your opinion of something vs a professional inspection report.

Bjorn Ahlblad · Answer

@Anson Lau Congrats on the properties. Since you have already bought; and given your background I would not worry about it at this point. Inspecting the two buildings would likely cost 2-3k. Inspections are valuable before closing as they can reveal negotiation points and if it is done by a pro you will get a full written report. I have found them to be very well worth the expense.