Hello, I am going to look at a property today that is a 6 unit complex - 1 4BR/2B house and 5 apts. Seller carry offer. This would be my first potential property. What questions/information should I get from the seller to be able to analyze this property. I have a few basic figures but need to know what I should be getting from him and also what I need to look at when I go look at the property. Any advice appreciated!
@Christine Prelaz I don't mean to be rude, but, you really should have done some homework/learning before even looking for multifamily property and not waited till the day of taking the tour. Having said that you need a minimum of three years of actual financials (not a proforma) and the actual current rent roll to start. You need to look at each unit and it's mechanical systems as best as you can and if you do get it under contract be sure to have a good inspection done. Good luck.
Thanks Dennis - I appreciate your help and your point is well taken and not without consideration.
I am currently actively learning but certainly have a long way to go by my own recognition. I just happened to see this property as I was driving by and decided to call - which I could not do and wonder about, or at least see if it is something to consider as it is something I am interested in for my portfolio. I do have some analysis forms and some very basic numbers from the seller already etc but really felt I could use direct suggestions/advice. Once I get further information, I can decide on the next step, if any.
Thanks again for your suggestions - they were helpful
@Dennis Tierney is soooooooooo right.
Probably mom and pop run operation, but assuming you already know the price, O.F. terms, and basics on market conditions for the area, at a minimum you will want:
last 3 years Sch. E's, copies of lease agreements/amendments/exhibits, property operating data...these should at least give you an idea if it's worth pursuing further.
Good luck, expenses should be 35% of gross income. Lower or higher means something.
Google the address and street name to see if anything comes up.
Check the police and fire websites to see any calls in the area.
Thanks Paul! I appreciate any clinical pearls I can glean from more experienced investors.
I did not think to mention that this is not a full tour of the property that is scheduled - ie I will not be going in to all of the units at this meeting as I know that is more involved. They are currently doing some remodeling on the house that is included in the listing which is not occupied, so we were just going to meet there so I can get more information and a initial look at the property.
Hope that helps to clarify somewhat.
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