Is a major lack of DD a red flag?

[Christina Luton]

We are under contract for a motel/rv park that is a value add site. Seller has not been able to provide any due diligence including contracts with long term rv tenants, proof of income in any way, proof of any expenses and now proof of insurance. Is this lack of available information normal? Should it be a red flag for any reason? TY for the feedback!

[Kevin Sobilo]

@Christina Luton, I think you answered your own question!

You state up front that this is a value-add opportunity not turn-key. The failure of the seller to be operating things well is an opportunity for you to negotiate a better deal and add value by getting those aspects under control.

I look for any distressed conditions when making an acquisition, not just physically distressed properties. It could be financial distress. It could be operational distress with the owner not managing the property well. Any kind of distress is an opportunity to me if its something I can take on and improve.