List of questions to ask seller of a Multi-family

[Roger P.]

Hey folks, I have a friend with a brother looking to sell his duplex and a tri-plex in the south suburban Cleveland, Ohio area in the very near future. I told my friend to let his brother know I'd be interested in meeting with him to discuss. I have a general list of questions prepared for him, but since I have not purchased MFR before, I'm researching and asking around to find details I may not know about. Has anyone found/created a proven single comprehensive "tried-and-true" list of questions and/or checklist that has worked for you to go over with the seller before deciding to negotiate a deal for their property? Thanks, Roger

[Seth Williams]

In my experience just make sure the place cash flows well, doesn't have a lot or any deferred maintenance, and look to see all the financials. Depending the type of investor he should have a P&L available, or a rent roll vs. expenses, keep in mind real estate taxes, a cushion for pro-active repairs and so on. Typically, if the place takes in 1% of a rent to purchase ratio - IE. 3k for 300,000 property, it probably does pretty well. Higher the better!