All Forum Posts by: Mason Bear

@Ian Stuart great list - thank you!
@Drew Sygit good call out - we'll ask for K-1s and tenant contact info too. We have all leases but social is not included so we will need their applications. Plumbing will be checked by our general inspector.
@Chris Seveney appreciate the perspective!
@Gino Barbaro thanks for the DD list and all the great content you put out!
@Michael McVety we have maintenance logs but will add CapEx expenditure too. Property has hallways and laundry as common areas. 25 outdoor parking spots and 10 garage spots. Good call on having a tenant provide intel. Insurance has been crazy in our market but we received a quote we are very happy with.

@Irving Rivera do you live in Chicago/East Garfield Park currently?

If not, I would highly, highly recommend spending time there. I think a decent litmus test is that if you don't feel 100% comfortable walking in the neighborhood at night, you should avoid investing there. TONS of people don't follow that rule and have done very well, but I wouldn't recommend it for your first property.

I live in Chicago but don't invest here for the most part. That has less to do with crime (in the area that I live I don't see it as a big issue) and more to do with taxes and tenant-friendly laws.

For any area that is higher crime, you should budget for higher vacancy (and significantly higher vacancy if you don't set tight screening standards and have to evict a tenant) and higher repairs and maintenance.

Good luck!

Hello BP,

My business partner and I have been investing for ~4 years. We currently have 6 SFHs and an 8 unit, and our portfolio has performed a lot better across the last 4 years than we ever expected.

We're currently under contract on a 35-unit apartment building. With this acquisition, we will offload property management to a professional. We feel very confident in our underwriting, but given the jump that we made from SFH to an apartment building, we want to ensure we're not missing steps in our DD/inspection plan.

Here's our current plan:

1) Have a general inspector complete a Property Condition Assessment.

2) Have specialists complete an evaluation of the roof, electrical, foundation, and heat source (2 steam boilers).

3) Review financials, all leases, existing service contracts, rent roll, tax assessment, rental certificate, and 12 months of work orders.

Here's what I'm not sure about:

1) Are there DD items (specifically those that we would request from the seller) that are not captured within #3 above that we should be requesting?

2) Our lender does not require a Phase 1 assessment. Would you have one completed for a property of this size? Property has been there for 100+ years and is not a conversion. I pulled a free environmental report on NETR Online and it didn't show anything concerning. My hesitation is that I don't want a phase 1 that turns up nothing to lull us into a false sense of security. We're doing no development, but I've heard many stories about a Phase 1 turning up nothing and big issues (ususally underground tanks) being found once the dirt starts being moved. I'm thinking that Environmental be added as an endorsement under our general liability insurance might be a better way to mitigate risk?

Thank you all and see you in Cancun!!!

Mason

@Isaac Pepper thanks that’s helpful. It’s a full basement. There don’t seem to be any cracks in the basement floor/foundation, but there were some mold spots that would need to be mitigated which also supports that it could be a water issue.

Any idea what a fix would cost?

Hello BP Community,

My partner and I each own or own home, have one buy and hold under our belt, and have been studying the BRRRR methodology, which is how we plan to scale.

We're interested in a duplex (built in 1915 - not an uncommon age for our market) that needs a pretty solid overhaul. The one area of concern are some major cracks on both the interior and exterior/front step. As a next step we would walk the property with a foundations expert, but, who better to get some opinions from then the excellent BP community!

Can these interior cracks be fixed with some drywall compound, a fine-grit sanding sponge, and some sweat equity, OR are these a symptom of larger structural issues?

It would be great to hear from some structural engineers/foundation experts or those that have dealt with similar issues. THANK YOU!!