Due Diligence on 100 properties sold as a Package

[Ashish Brar]

Hello BP Folks,

I am looking into a portfolio deal of 100 properties mostly SFH and a few duplexes. The seller is requesting due diligence requirements to submit with the offer.

How do i do inspections on all the properties. I would assume it would cost a lot of money and time. 

I can suggest roof and mechanical inspections since these are the two big ticket items.

I would love to get suggestions from folks that have done larger deals in the past.

What else should i be requesting from the seller other than leases and financials for the properties.

Looking for guidance on how to do due diligence on a large portfolio.

Ashish

[Jaysen Medhurst]

@Ashish Brar, if it's cash flowing with those loan terms and a 15% vacancy, I understand why you're tempted. What kind of CapEx are you expecting right out of the gate? My concern is that deferred maintenance is driving the high vacancy and without the reserves to address it, you won't be able to stabilize the properties.

When I hear syndicators talk about due diligence on large complexes (100+ units) they insist on walking through every single unit. I think that's what you have to do here. You have to know what immediate repairs are required, what roofs are getting close to replacement, which boilers are past their useful life. It's going to be A LOT of work, but I think you have to do it. Do you have a partner or GC that you trust to help out?