Looking for advice on a multi family deal

3 Replies

Should I get something in writing with the seller before I have a contractor walk the property with me? That seems like an obvious yes. So should I get a lawyer or just a self written statement with my and sellers signature will do?

I've contacted the zoning and it's cleared. Also checked the historical site online but they don't have any funds available for grants for 2021 yet. I have a list of codes that are already in violation for the property. Talked to the fire inspector. I have a list of contractors from the city but it isn't very organized as to who does what type of work.

Something in writing like a Sales / Purchase agreement? Or at the very least an LOI? Probably.

Personally, I think if the ballpark numbers work, then you negotiate for as much due diligence time as you need.  Unless your market is very different than mine, someone less risk averse could come in and swoop it out from under you.

I wouldn't waste time doing due diligence on something I wouldn't buy.  The DD period is to disqualify the property, not to qualify it.

Are you walking the property while under contract and during due diligence or for a showing/tour?

If it's already under contract then it should be spelled out in your PSA. 

If you are under LOI and want to get in to take a look prior to getting under contract then you will need to ask for and negotiate an early access agreement. Some sellers will not want to do this while others encourage it to speed up the timeframe. If the seller wants a quick close, you could say "fine, but we need an access agreement prior to PSA execution to get started." This agreement will need to include some indemnification language, what you're allowed and not allowed to do, etc.

If you are just on a tour, it's up to you whether you want to pay a contractor to tour it with you. On one hand the contractor may provide you with critical information that will influence your offer such as identifying major cap ex or even items that may seem like a big deal to you but the contractor can tell you that it's actually not a big deal and nothing that should hold the deal back. On the other you may be out some $ on projects you don't pursue, however you could also save yourself time and money by not pursuing deals that could have a major issue.  

@Spencer Gray

I’ve already walked the property with the owner. Took a bunch of pictures. Went to the city building and pulled what codes are in violation with the building.

This is off market so no re agents are working with this. I asked for the contractors she used for the second floor renovations but never received an answer. I asked her if she had a local attorney ( she lives about 1 1/2 hours south ), she said she has one but not in the area where the deal is located and that he could draw up a contract and send electronically. I asked for his info to have my attorney contact his.. I haven’t received a reply to that yet.