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Multifamily – Due Diligence

Commercial Properties No Comment

If you are new to apartment investing learning as much as you can about investment properties will help ensure you make the right choices. Read everything you can. Attend legitimate seminars in person and online. Your local city, county or state agencies may have seminars, too. Seek out experienced investors, and ideally, see if one of them will mentor you. Talk to real estate agents and take steps towards joining an investment club or a commercial real estate focus groups. Nothing compares with learning from the practical experience of other investors to make smart investment decisions—so you can watch your portfolio grow.  There are many great programs available to grow your knowledge.  Jake & Gino’s, Wheel Barrow Profits Multi Family Academy has some great information for new apartment investors.  Rod Khleif’s, Lifetime Cash Flow Academy is another one you should check out.  Both Jake and Gino and Rod have podcast that provide tremendous value.

 

An apartment building can be a lucrative investment, if done right. A good investor seeks out the best advice, gathers all the information he or she can and then chooses the right building. A great investor will get to know local real estate agents and other investors—and even find a mentor.

 

With the growing rental demand from millennial and baby boomers looking to down size apartment rentals in Florida, will stay in demand for many years to come. With this growing demand the cap rates are getting compressed and deals are not as easy to come by as they once were.

 

Doing your full due diligence when purchasing your new investment is critical. Having a healthy cap ex account is very important for deferred maintenance items.  Making sure the building’s major systems like the roof, HVAC, electrical and plumbing is in working condition and has a useful remaining life expectancy.  Make sure all units are rent ready.  Many “Mom & Pop” apartments will have a unit or two that are being used for storage.  Not having these units rented will affect the NOI of your property.  You should walk each unit and make sure the rent rolls are accurate.  Talk with some of the tenants and ask what they like or dislike about living in the complex you are looking to purchase.

 

Having a professional property inspection of your new building is very important. At Priority Home Inspections, we perform commercial apartment assessments and will provide a thorough inspection of each unit to ensure it is “Rent Ready”.  We also inspect all of the buildings major systems.  We will identify areas that can be improved to make turning a unit when someone moves out easier and less costly.  We will get the age of each unit’s HVAC system and water heater to give you an idea of future expenses.  If there are major discrepancies, it is important to find them before purchasing the property. This can save you thousands of dollars in costly repairs and future headaches.

 

The apartment space is very exciting and is suspected to see long-term growth through 2030. It is an excellent way to preserve capitol, create cash-flow and build generational wealth.  If we can help you with your commercial inspection needs, contact us at 321-368-9921.

 

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