What to ask for more information

Question

Hello,

I'm new and just starting out.  I live in Fargo, ND so I'm just looking around to analyze some deals to get feel for things.  I've seen a few mult-family on MLS where is lists the place and will say that it's 4 units and maybe how many bath and bedroom there are, but it doesn't list anything about how much they rent for, expenses, or how utilities are paid.  Do I just reach out to the agent and say that I'd like more information, or is there something specific a person should ask for?  If it's a smaller multi-family unit, do they not need to provide that kind of information?  I tried searching the forums, but didn't find anything, so sorry if this is a question that has already been answered.  Any help would be appreciated.  Thanks!

Chris Brandon · Answer

@Hadar Orkibi, Thanks for the detailed listing of stuff to ask for and thanks everybody for your responses.  I really appreciate it!

Evan Polaski · Answer

@Chris Brandon, the financials are important, clearly.  But typically anything that is listed on the MLS is going to be based on comps, not the financials of the property.  Since the property is on the MLS, I am assuming you are looking at a 2-8 unit property.  Co-star will not be as useful in this case.  MLS comps are typically the best option at this size.

That being said, you have been given some good info here.  As a seller, there are pieces I initially don't put out there.  Insurance is one. That is a number you can easily get from your insurance agent with a phone call.  Whether I pay more or less is irrelevant to you as a buyer.  Cost of my capital improvements is another.  Whether I got a deal or not on a roof is irrelevant, you should be concerned that the roof is 4 years old.

Additionally, I do out RET on mine, but you can typically hop on a county assessor site, plug in your purchase price to see what those will be for YOU.  The fact that I paid a lot less for the property, and therefore assessed much lower is irrelevant to you.

In my area, zillow has a lot of the smaller for rent listings.  Apartments.com and Craigslist are other options.  Cozy has a listing service, but not sure how widely used it is.  When pulling these rent comps, be very cognizant of finish level.  An outdated unit rarely rents for as much as an updated unit.

Ryan Daigle · Answer

@Chris Brandon ask, but verify (especially w/ what rents are). There are some financials you can only get from the current owner/agent - like T12, expenses, etc...

But for rents, I would do your own research or contact your own PM company to determine what market rents are for the property. What the seller tells you and what you're going to actually see as an owner are probably not at all the same thing.

Greg Dickerson · Answer

Yes the agent can and should be able to give you all the info. Some sellers will not provide info so you need to do the rent comps and expense assumptions based on similar properties. The realtors and a PM company can help you with market averages.

Hadar Orkibi · Answer

@Chris Brandon  Ask who is managing the property?

if its managed by 3rd Party pm you should be able to get a Trailing 12 months of income and expenses.

Ask who pays for Utilities, Copy of the leases, Insurance and list of Capital expenses in the last 24-18. months.  Also ask the broker for Co-start report of Comparable sales and rents in the area.

Last but not least, talk to the PM or an independent one about the market rent.

Bjorn Ahlblad · Answer

@Chris BrandonBe careful what numbers you believe-it is a fact that sellers lie. Sometimes by accident and other times on purpose. An accidental lie is when the new property taxes are calculated on the new selling price. A deliberate lie is 'gross rent is 10k/mo'. Yes but only when all the units are fully rented-currently there are 3 vacancies. Typically water and sewer are left out all together. I never call agents or sellers my agent does that. Be extra careful of FSBO. Until you are experienced don't operate w/o an MF agent, they have access to financial property numbers that are more accurate but your typical agent who sells to homebuyers has no need to even know about those schedules and it is an extra download from a different database, and not all offices even pay for that. There is a lot more but this will get you started. All the best!

Karl B. · Answer

Contact the agent and ask. Also, if you have a buying agent they can hook you up with the MLS listings VIA their buyer portal which often show the rents for multi-family (sites like Zillow, Trulia, etc. typically don't).

What to ask for more information

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