All Forum Posts by: Brian Volland

@Jeff B., They are being sold at the same time so don't think deferring taxes is what they were aiming for.

So I just wanted to pitch a question to you guys and see if you came up with the same answer I did. I'm seeing a number of MLS listings for fourplexes around the greater Phoenix area which are actually two fourplexes side-by-side. Any reasonable person looking at the property would assume it's an 8-unit apartment on two parcels.

So the question is, why would they break them up in the MLS listing? I imagine it's a very select group the would want to purchase only half of a property that is not meant to be split like that.

The answer I've come up with is valuation. With Phoenix's inflated property values on residential real estate, the owner (or realtor), lists it this way because they can then avoid being valued at using cap rates; now it's just comps.

Thoughts?

It's not a huge change but every bit helps! Thank you for bringing this to our attention. The link below is straight from the VA website:

http://www.benefits.va.gov/HOMELOANS/purchaseco_loan_limits.asp

@Evan Bell, I want to see listings for all multifamily properties between $140k and $400k in the greater Phoenix area as it aids my market research. But, to more pointedly answer your question, I will not be looking with the intent to purchase until June 2017.

@Jennifer Brown, some of this information may be available on the MLS listing and, depending on how quickly properties are selling, you can contact the seller's agent and request all of this information. Whether or not they provide the info is up to them. In my area properties are moving fast and I'd rather lock down the property before it gets picked up while I'm waiting for information.

I'm actually quite surprised that no one has mentioned anything yet. I know it's long but I figured someone would be able to pick this apart in a heartbeat.

A brief bit of background: The below checklist is intended to be used during the due diligence period for 2-4 unit properties. It is cobbled together from many sources and so may have some items which are "non-standard". Many items are not required but requested regardless because you cannot have too much information and you'll never get them if you don't ask. 

Please take a look and let me know if there is something you would add or remove and why. Also, please forgive the formatting, it's much cleaner in MS Word.

Week 1:

Request the following information from seller agent:

Primary Financials: Check boxes upon receipt of documentation or to answer in the affirmative.

• qFinancial Statements and/or Tax Returns 2yrs+
• qAnnual operating Statement (REQUIRED)
• qMonthly Operating Statement
• qYear-to-Date Operating Statement (Required)
• qSecurity Deposit Statement (Required)
• qMatches estoppels? (Required)
• qOther Deposits Statement [Pet/Special] (Required)______________________________
• qALL Deposits to be transferred at COE per contract? (Required)
• qUtility Bill Statement
• qCopy of monthly utility bills 2yrs+ or entire time of ownership

• qUtility statements/bills match utility company records for prior month?
• qWhy not?_________________________________________________________
• qRent Rolls and Estoppels
• qCopy of ALL Leases (Required)
• qAny missing? Why?_________________________________________________
• qEstoppels (Required)
• qDo they match leases?
• qWhy not?___________________________________________________
• qStatement of Verbal/Written Landlord/Tenant contracts (Required if in place)
• q2yrs+ Rent Rolls (Required)
• qAny current tenants historically late payment/failure to pay?______________________
• qCertificate of Occupancy
• qInsurance Policy Document
• qPremium 2yrs+___________________________________________________________
• qAll claims past 2yrs________________________________________________________

Compliance Documentation:

• qZoning Certification
• qBuilding Code Compliance Letter
• qInventory of Transferred Property
• qLead paint Disclosure
• qAsbestos Disclosure
• qBuilding square footage certification

Maintenance:

• qCapital Expenses Age/Replacement/Service Statement (Required)
• qDeferred Maintenance Statement (Required)
• qOperating manuals for all transferred equipment/items
• qAdditional Seller Disclosures_______________________________________________________
• qHOA Agreement:
• qAnnual Dues______________________________________________________________
• qHOA Benefits_____________________________________________________________
• qDate/Cost/Use of Last Special Assessment______________________________________
• qProperty Management Contract
• qLandscaping Contract
• qMaintenance Contract
• qEquipment Rental Contract
• qPlot Map_______________________________________________________________________
• qBuilding blueprints_______________________________________________________________
• qFloor plans_____________________________________________________________________

Will Seller Issue Warranty of Information?

Research The Following Information and/or Documentation:

• qUtility Bills from prior month
• qWater
• qElectric
• qLandscaping
• qTrash
• qInsurance
• qClaims Report from carrier
• qCarrier Risk Assessment
• qFlood Insurance Required?
• qProperty Tax
• qWhat percent building currently taxed at?_____________________________________
• qDo “The Numbers” still work w/ Non-Homestead tax rate?________________________

• qCapital Expenses:
• qWhen were the following last replaced?
• qWater Heater______________________________________________________
• qHVAC Unit_________________________________________________________
• qRoof_____________________________________________________________
• qWasher___________________________________________________________
• qDryer_____________________________________________________________
• qStove_____________________________________________________________
• qRefrigerator_______________________________________________________
• qOther____________________________________________________________
• qWhen were the following serviced?
• qWater Heater______________________________________________________
• qHVAC Unit_________________________________________________________
• qRoof_____________________________________________________________
• qWasher___________________________________________________________
• qDryer_____________________________________________________________
• qStove_____________________________________________________________
• qRefrigerator_______________________________________________________
• qOther____________________________________________________________
• qDeferred Maintenance Items: ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
• qTenant unresolved issues?
• qIssue listed on deferred maintenance list?

Additional Research Information:

• qRent.com Review________________________________________________________________
• qLast Sales Price/Date_____________________________________________________________
• qRental Ordinances_______________________________________________________________
• qMarkey survey of nearest 3-5 Competitors

Schedule The Following For Week ONE:

• qInitial walkthrough of all units
• Schedule The Following For Week TWO:
• qAppraisal
• qInspections
• qLand/Building Inspection (Required)
• qPest inspection (Required)
• qFire Suppression Inspection
• qBoiler Inspection
• qHVAC Inspection
• qMold Inspection
• qTitle Inspection

Week 2:

ATTEND ALL PHYSICAL INSPECTIONS IN PERSON

• qTitle Report
• qTitle Report Clear?
• qIf not, renegotiate
• qBuilding/Land Inspection
• qAll Clear
• qCost of repair?____________________________________________________________
• qRenegotiate
• qPest Inspection
• qAll Clear
• qCost of repair?____________________________________________________________
• qRenegotiate
• qOther Inspections
• qFree of Major issues
• qTotal cost of repairs?_______________________________________________________
• qRenegotiate
• Rerun analysis with all VERIFIED numbers
• qDo the numbers still work?
• qCashflow:_______________________________________________________________
• qRenegotiation Required?

@Evan Bell, as I've become more and more connected with wholesalers, agents, and other owners we've seen more potentially good deals come across our desk. The MLS still provides some opportunities but they require more effort to ferret them out.

That being said, we've not yet made a purchase here but that is due to our established timeline, not a lack of potentially good starters.

Welcome Steven!

There is a ton of information here to find any information you're after. There are also a lot of wholesalers in the Phoenix area so you should be able to meet with some folks on here in person. The search bar at the top will let you find member's near you, so just reach out and start making connections. 

I think it will depend a lot on how happy your tenants are overall. What you envision is a helpful thing built on community and kindness, but trust me went I say that a platform like this can be turned to hate very quickly. I'm speaking from experience on this one. 

If you've got happy tenants who you don't get into disputes with and you are SURE that they aren't holding a grudge or dislike anything about the property, then go for it. All it takes is one person venting about not having a smart-linked digital refrigerator to go from helpful comments to residents trash talking the property and/or each other. 

Maybe if you did a closed group that you admin so that you can verify tenants with FB names so that you can address any issues brought up, but otherwise I'd say its a recipe for disaster either now in or in the future.