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Member since 2025 · 5 posts · 8 votes

All - I'm looking at acquiring my first STR in MI. The current owner is providing facts/figures etc on the subject property. My question is how do I protect myself from the seller making false claims? My thought was to put all the Q&A in a doc and then have them attest to it perhaps? Any advice or if you can help with this please DM me.

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

2mo

Even getting them to put it in writing you would still need to sue. Who is managing the property ? if it's them Ask for a T-12 on the property and bank statements showing income and expenses.
if it is third party managed, then request to speak to the property manager and ask the same questions

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2mo
Even getting them to put it in writing you would still need to sue. Who is managing the property ? if it's them Ask for a T-12 on the property and bank statements showing income and expenses.
if it is third party managed, then request to speak to the property manager and ask the same questions

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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
2mo
Quote from @Ryan Berg:

All - I'm looking at acquiring my first STR in MI. The current owner is providing facts/figures etc on the subject property. My question is how do I protect myself from the seller making false claims? My thought was to put all the Q&A in a doc and then have them attest to it perhaps? Any advice or if you can help with this please DM me.
Your comment: "My thought was to put all the Q&A in a doc and then have them attest to it perhaps?"

In front of a notary and a firing squad?
Why don't you trust him? ;-)

I don't think that's a very good idea. You write up a purchase and sale agreement, include the items you demand and then if he is wrong or doesn't provide the data you want, you end the deal. Don't fall in love with the deal until it's signed, closed and working.
What we go with our students and ourselves, is how to evaluate a property, what sources to check and to assume nothing. Unless you get the information from the source, say water department, building department, crime, zoning, a fresh title report, and so on, you are always taking a chance anyway.

For one, most people don't know the answers to the questions you should be asking, when you ask them, so they will make it up so they don't look stupid. Another is that the information is constantly changing. Sometimes a simple rent roll gives you a clue, other times you can get bank deposits, but frankly there are so many ways to hide expenses and "gotchas" that you are better off treating it like a full time job until you get the information you need.

Don’t take a questionable deal with the thought “I’ll just sue later if he lied, that is a painful way to say you didn’t do your job.
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Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2mo
What claims don’t you trust? Obviously their previous rental income means nothing to you. They have history and ratings, you won’t have them. They were renting it out when there was less competition and more customers, you aren’t.
I assume you confirmed that it would work as a mid-term or long term rental and you aren't paying more than any other houses in the local market that aren't STRs. Because being an STR doesn't add any value other than non-trash furniture.
TLDR: Compare it to other local non-str homes for pricing. Run your own numbers for STR proformas. Get an inspection and your lender will perform an appraisal. What's left?
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Ryan Berg
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Member since 2025 · 5 posts · 8 votes
2mo
Thanks guys this is all helpful and you bring up some great points
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Diana KhanPro Member
Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 550 posts · 189 votes
1d
Quote from @Ryan Berg:
All - I'm looking at acquiring my first STR in MI. The current owner is providing facts/figures etc on the subject property. My question is how do I protect myself from the seller making false claims? My thought was to put all the Q&A in a doc and then have them attest to it perhaps? Any advice or if you can help with this please DM me.
@Ryan Berg, I actually think your idea of putting the seller's answers in writing is a good start. But I'd take it one step further and have the important statements addressed in the purchase agreement itself. That way, you're not just collecting information. You're also making it clear what the seller is agreeing to and what your options are if something turns out to be inaccurate. I'd especially want to confirm whether the property can legally continue operating as an STR after you purchase it.
I'm a real estate attorney, broker, and investor based in Maryland, and I work with investors on contracts and property transactions. One thing I've learned is that even when everyone has good intentions, problems can come up when the written agreement doesn't clearly reflect what was discussed. That's why I pay attention to what the seller is actually promising and what protections the buyer has before closing.
I appreciate you bringing this up, @Ryan Berg. It's a good question, especially when you're buying your first STR. I'd have a Michigan real estate attorney review the agreement and any important seller statements before signing. Happy to stay connected!
[email protected]240-266-0291
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
2h
NEVER TRUST anyone!
In addition to the T-12 and bank statements, you should also explore:
- their tax returns
- Documentation from Airbnb, VRBO, etc. showing annual booking payouts
- Do your own research on the STR market to confirm how other properties in the area are performing and how this one measures against those.
[email protected]248-209-6824
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