What info should I expect from a seller on a 4plex?

[Anne Dahl]

Hi all,

I have a 4plex I would like to put an offer on.  It is a square box with mirror image  2/1 units.  The owner has provided a half page of financials.  It tells me the rent roll, insurance, utilities and taxes.  I feel there should be more information, but I am unsure what to ask for.  Cap rate for the area is tough to pin down (CA) - and the numbers the agents throw out are laughable.  Seller is a developer that is looking for cash on a large project.  He did a 1031 and bought several properties in January 2015.  This is also why there isn't any info.

Advice would be greatly appreciated as well as what books to read. 

Since this is in CA so there isn't a lot of wiggle room.  I need to get it right. 

Thanks!

Anne

[Sorab G.]

Take it from a guy that owns many of these.  Make sure you or your agent specifically speaks with each person living there and validates what they are paying.  If the seller gets it its called an Estoppel certificate, but many of these have been known to be forged.  For me its happend at least 3 times.

A list of maintenance issues fixed and outstanding issues to be fixed.

Tax information might give you some information but i doubt its based on any fact.

Get examples of how much all things cost, water bill, garbage. 

Reach out to the city to see if any inspections or code violations have been given.

Run the numbers.. these types of properties have more costs than SFH's or duplexes.