Tips for touring a multifamily property anonymously?

When touring a multifamily property anonymously, especially one with 500+ units and a history of low occupancy, here are some key tips and things to look for based on the most helpful WSO content:

General Tips for Touring:

1. Blend In with Your Cover Story:

   • Stick to your "relocating for work" narrative. Be prepared to answer casual questions about your job, timeline, and what you're looking for in an apartment.
   • Dress appropriately for the area and demographic of the property to avoid standing out.

2. Schedule a Tour with the Leasing Agent:

   • Use this opportunity to ask questions about the property’s operations, amenities, and tenant demographics. Leasing agents often reveal valuable insights unintentionally.

3. Solo Walk-Through:

   • Before or after your scheduled tour, walk the property on your own. Pay attention to areas the leasing agent might avoid showing you.

Key Things to Look For:

1. Occupancy and Leasing Trends:

   • Ask the leasing agent about current occupancy rates, lease-up trends, and how quickly units are being rented after renovations.
   • Observe the parking lot during different times of the day to gauge actual occupancy.

2. Deferred Maintenance:

   • Look for signs of deferred maintenance, such as peeling paint, broken fixtures, or poorly maintained landscaping. These could indicate deeper operational issues.

3. Renovation Quality:

   • Inspect the quality of the renovations. Are they cosmetic upgrades, or do they address structural and functional issues? Poor-quality renovations might deter potential tenants.

4. Amenities and Common Areas:

   • Check the condition and usage of amenities like the pool, gym, and clubhouse. Are they well-maintained and appealing to tenants?

5. Tenant Demographics and Behavior:

   • Observe the tenant base. Are they families, young professionals, or students? This can give you insight into the property’s target market and whether it aligns with the area’s demographics.

6. Competitor Properties:

   • Ask the leasing agent which properties they consider their main competitors. Visit those properties to compare occupancy, amenities, and overall condition.

7. Noise and Environment:

   • Pay attention to noise levels, odors, and overall cleanliness. These factors can significantly impact tenant satisfaction and retention.

8. Utilities and Services:

   • Inquire about utilities, valet trash services, and internet/cable options. These can be selling points or pain points for tenants.

9. Deferred Occupancy Issues:

   • Investigate why the property has been at 75% occupancy despite renovations. Ask subtle questions about tenant turnover, management practices, and any challenges they’ve faced.

10. Market Fundamentals:

    • Cross-check the property’s performance with the local market. If the market fundamentals are strong, the issue might indeed be mismanagement or poor execution of the renovation plan.

Additional Pro Tips:

• Bring a Notebook or Use Your Phone: Take notes discreetly during your walk-through to document observations.
• Engage with Tenants: If possible, casually chat with tenants to get their perspective on living there.
• Inspect Major Systems: Look for signs of aging infrastructure, such as HVAC systems, roofing, and plumbing. These can lead to significant future expenses.

By combining your solo observations with the insights gained from the leasing agent, you’ll be able to form a comprehensive view of the property and identify any red flags that might explain the low occupancy.

Sources: Lunch & Learn -Ins and Outs of Multifamily, Multi Family Investing - New York City, First Solo Property Tour (Multifamily), Q&A: Building a Real Estate Investment & Development Business, https://www.wallstreetoasis.com/forum/real-estate/looking-at-my-first-investment-property-in-nyc-any-advice?customgpt=1