How to analyze Apartment Building

[Jairmiya St. Hilaire]

Hi Eveybody! 

If you had a colleague of yours inform you about an apartment building for sale, how would you analyze the deal? What would you ask of the owner to help you analyze the property to ensure it is a good investment? The only thing I would think to ask the owner is for the T12, pro forma, and rent roll. I also would probably ask the owner why he is selling the property so that I could create a win-win situation for us both, possibly seller financing if he has a good amount of equity in the building. Let me know what else it is I should be asking or looking for? Respectfully, Jairmiya 

[Russell Gronsky]

Are the units individually metered for utilities? If not, can you retrofit meters/is it financially feasible to do so? Do competing buildings in the area charge tenants for utilities or does the owner pay? Are there other revenue generating abilities of the property aside from rent? Is the property free and clear? If there is a mortgage, is it assumable? Do the terms of the exiting loan make it advantageous to assume it or seek a new loan? Is there on-site management? Are there any contractual agreements that must be honored after the property exchanges hands? What is the reputation of the property itself online and the reputation of management? 

That would be a good start.