Multi-family purchasing and operating checklist

[Tyler Merritt]

I’m interested to hear what your processes are on when buying and then operating a property. What are things you’ve missed in either your numbers or inspections of properties when purchasing multi-family units? Are there expenses you were totally surprised by or completely missed in your calculations? What are assumptions you missed on when making assumptions on vacancy, maintenance or general operating costs? If you have a checklist you are willing to share that would be even better.

[Phil Christian]

An operational checklist is sort of difficult to make because it is specific to YOUR business plan on that specific deal.. that said, here's a good start for a DD through property set up checklist. 

I. ACQUISITION DOCUMENTS

Underwriting

Letter of Intent

Market Analysis

DD Budget

Initial Construction Budget

Construction Schedule

Purchase and Sale Agreement

Critical Dates

Deposits Hard

Scheduled Closing

Deposits: GP

Deposits: LP

II. FINANCIAL AND OPERATING

Historical Operating Statements un-interrupted from date ownership began to Closing from Project and Association most recent 2 years

Current and Historical Tax Bills (3 yrs.)

Rent Roll

Insurance - Property, Association and Tenants.

III. MAINTENANCE

Vendor Contracts Review

Current Property Management Agreement

Laundry Leases

Security Service Reports

Elevator Certificates

Utility bills for each meter and each service - including acct. no.

IV. LEGAL

Preliminary Title Report

Underlying Title Documents

Summary of Pending or Active Legal Issues

Parcel Map/Site Plan/Elevations

All CC&R Documents

ALTA Survey - Historical & UPDATED. Include Hard Parking Count

V. PHYSICAL

Phase I - Historical & UPDATED

Zoning Compliance Report - Parking, use, zoning, physical structure, City Compliance Letter. CURRENT

Property Condition Report - Historical & UPDATED.

Roof Survey - Historical & UPDATED

Structural Report -PML/Seismic. Historical & UPDATED

Floor Plans

Seismic Retrofit

Parking Plan

Personal Property Inventory

Landscape Architect

Exterior Design Book

VI. LOAN

Lender Selection

Lender Documents

Co-Investment Accounts

Property Budget

VII. OTHER

Partnership Documents

Org Chart

LLC's and Entity Documents, SPE etc..

Partnership EIN

Property Insurance Set Up

Property Management Agreement

Bank Account Set Up

Property Ownership Transition

YARDI, RESIDENT LEASE FILES & GOOGLE DRIVE SET UP

Lease Agreements and Rent Increase Audits

Resident(s) Contact Worksheet

Current Rent Roll Audit

Garage/Parking Space Assignment per Resident Audit

Google Drive Set up

Utilities Folder(s)

Service Contracts Folder(s)

Floor Plans & Site Maps Folder(s)

Etc.

DAY OF CLOSING

Pick Up Keys

Pick Up Hard Copies of Lease Documents

Pick Up Personal Property (as-needed)

BUSINESS PLAN

Market Lease Rates

Garage / Parking Lease Rates

Operating Budget

Distribute Entity EIN #

UTILITY TRANSFER/SET UP

Electrical

Electrical - SCE Auto/Clean and Show

Gas

Water

Sewer

Trash

Telecom

SERVICE CONTRACT SET UP

Landscaping

Laundry Facility Service (DO NOT EXTEND CONTRACT - SIMPLY REQUEST NEW FORWARDING ADDRESS)

Pest Control

Janitoiral

Pool Cleaning

Fire Equipment (Extinguishers, Alarm Box, etc)

Elevator Service Contract

Courtesy Patrol

Water Servicer Vendor

RESIDENT RELATIONS

Notice of Change of Ownship / Management

Change of terms: RUBS, Pet Addendum, NSF, Late Fees, Removal of HVAC from Windows

Distribution of New Resident Keys (Laundry, Gate, Pool, etc)

MAINTENANCE & OPERATIONS

Change all Locks/Keys {Gates, Utilities & Laundry -- Standard Key}, {Office & Shop -- Special Key}

Maintenance Shop

Tool Audit

Trash Out

Storage Room & Janitorial Rooms

Tool Audit

Trash Out

Create Building Systems Project Manual

Water Main Locations

Building Water Shut Off Valve Locations

Water Heater / Boiler Specifications & Locations

Site Lighting Timer or Photosensors Locations

Pool Equipment & Timer Locations

Gas Main Locations

Electrical Panel/Switch Locations