First Solo Property Tour (Multifamily)
Hey guys -
Doing my first ever solo property without my boss for a Class A lease up multifamily deal. We primarily have looked at stabilized deals. Here are the below questions I wrote down but would appreciate any additional things to look out for / ask.
- What is occupancy / lease up trend look like
- How many tours / visits per week / leases signed per week
- What floor plans lease up the quickest / hardest to fill
- What is your typical renter / employment wise
- What properties do you comp yourself to
- Is Valet Trash charged / implemented by here / comps
- How does cable / internet work?
Visit a nearby competing property, bonus point if you can get a leasing tour
Would second the ones mentioned especially concessions.
Ask how March - Present lease-up velocity compares to pre-March given the times.
Make sure you know how all the fees & RUBS work (pet, parking, cable, etc.) and compare it to the rent roll.
Good starting list, few others below.
What you can ask really depends on if a broker is there (i.e. can they get around Fair Housing rules? Yes if broker is there)
what market?
"How many open parking spaces on a weekend?" - avoid buying a deal underparked
Interesting. I'm probably missing what's slapping me in the face but why would this matter for a weekend?
Most tenants would be home.
Probably should ask about when lease expirations start especially if you are buying a lease up deal along with what % of tenants have been paying last few months
Are you saying the property is still in lease-up? Would want to see which units are leased (are all first floor 1 bedrooms gone and 5th floor 3 bedrooms vacant?) to make sure they haven't just been signing all their easiest to lease units.
How old is the building? How long ago were major systems replaced (roof, boiler, etc). When were in-unit amenities last updated. How often do city/municipal inspectors come through.
Everyone else is focusing on leasing related questions, but revenue is only half the equation. Also try and figure out what kind of deferred maintenance the property needs, are you heading for an operations cliff as equipment reaches the end of it's natural life? Did the former owner do a ton of maintenance and capex work and the current owner has let that slide for a few years, so there is a probable wave of repair work coming up?
As always, great post. You beat me to it.
Any major repairs done on the property, make sure receipts/paperwork are valid. Don’t take the risk of unlicensed people having done repairs. You risk a lot of liability.
sounds like it's a new building unless i am missing something based on the original email.
if new building, find out if they have mini split AC system...important in the age of COVID. you don't want central AC systems. also, what kind of wifi as folks are working from home.
if the building is in lease up, you don't want to buy a building that started lease-up 12 months ago and still in lease up today. you will be cannibalizing your own property while dealing with competition near by. tenants that signed leases 12 months ago will want similar concessions to tenants today so it becomes a property with constant rent abatement.
understand floor, corner, balcony, etc rent premium.
and definitely drive and do a rent survey on each comp set asking rents, concessions, RUBS, parking, pet rent, etc so you have a true understanding of the asset and competitive set.
also the type of tenants at the building... professionals, divorcees, retirees, young couples, starter families, etc.... more important across 2 and 3 bedroom units. the layout you want is different for two friends living together vs retires vs single person in a two bedroom.
Or just order a property condition report
Haha. Good one.
Or... are you serious? I mean, you should always order a property condition report, but anyone who relies on that without actually walking a building and asking questions will get hit with a giant capex bill and will deserve to lose all their money. How lazy can you be?
Property condition reports generally include so much capex work that it makes doing any deal impossible. Especially if you're dealing with older housing stock. And since you can't pick and choose what work to do blindly, without knowing which items are truly immediate needs and which can wait five years, you're going to walk the property to see for yourself. Thus invalidating the needs for a PNA in the first place.
Add to your list to find out about their packages (amazon, etc) arrangement...ie do they have lockers, how many.
Different markets have different concerns (rent stabilized in NYC or rent control in CA for example). In addition to the questions you mentioned – 1. Go undercover as a prospective tenant on every competing property in the immediate radius (adjust accordingly). See the angles/strategies/occupancy risks from your potential future tenants side and gain knowledge accordingly. 2. Speak to the local developers/owners/lenders/brokers regarding their thoughts on your submarket and what is in the pipeline. A local developer will be the first to tell you “city council has xyz coming down pipeline in terms of transportation etc.” 3. Ask for and look closely at their actual rent collected during covid versus how many tenants are on payment plans, applying their security deposit, using concessions early. As mentioned, the rent collections/lease terms are 1/3 of the situation. Covid is an excuse to ask for and get more information than usual (I am not saying no one asks normally, but that brokers/owners sometimes find your requests unusual/takes a while (depends on asset, market, etc.). 4. When on tour, ask them about deferred maintenance. How old is this building? Who and for how long has the current owner had the building? Get the story. Eventually, you get experience on what visually is a red flag. 5. Beware if “the owner has owned in for the last millennium. Never on the market!”. Usually means deferred maintenance will be epic, and 50/50 anything was done up to current local building codes or permits. Love and respect those types of owners, but usually haven't kept up with what on earth you are required to do, compliance wise, for multifamily anywhere in 2020.
Use steps 4 and 5 in conjunction with pulling every record the local building department has on file and negotiate accordingly.
The best of luck, and have fun! Tours are always exciting...
In quia possimus nihil cumque laborum dolorem aperiam. Aspernatur ut et magnam. Omnis omnis sapiente at vel sunt sequi.
Corporis voluptatibus delectus quis eos minima veniam. Est quibusdam tempora doloremque rerum. Error provident rerum sint enim tempore enim. Doloremque ut distinctio dolorem et.
Iure sint et ab ea consectetur. Et soluta ducimus labore sint harum sapiente. Alias ullam rerum delectus modi ea voluptate ut aut. Ut distinctio amet quo ut ea reiciendis.
Accusamus harum ut nemo provident iusto animi voluptates. Dicta ut maxime ut quisquam magnam. Inventore ab voluptatem distinctio placeat mollitia. Dolorem eum fugit tempora possimus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...