Do you know what to look for when you’re doing an on-site visit to a potential multifamily property deal?
Or what do you look for if you’re checking up on a property you already own but it’s being managed by others?
Hey Moguls, Chris Urso here with both of those aspects from two of my real-life deals.
Let’s dive in…
The potential apartment deal
So, I traveled over to Cincinnati to tour a potential apartment unit deal. 22 units completely occupied.
The reason I went to look at it is because we wrote an offer on it at about 40% off of asking price… and they countered. Right in the middle of that. So it shows me they’re motivated and that there’s flexibility on the seller side.
This is very good.
Let me throw some numbers your way…
They asked $512,00.
We offered $350,000.
They countered at $450,000.
So that’s why it warranted my on-site visit…
Okay , when I’m checking out the exterior of a potential purchase, I’m looking at several things. Here are the big ones…
Deferred maintenance.
The first big thing I look at are the windows… to consider whether they need to be replaced.
The next big thing I observe are the parking lots. Whether they need full repaving or minor patches or freshly painted parking spots, things like that.
The other big thing I look at are the neighboring buildings. This 22-unit property that I’m interested in buying happens to be right next door to a professionally managed apartment complex. It’s very clean and well taken care of.
While some might view that as competition, we see that as a bonus. Here’s what I mean…
Right now, the unit I made an offer on is the ugly duckling. But, if we fix it up, we’ll actually benefit from the traffic the other complex gets – as long as we’re competitive with our pricing and we keep it clean, we will be able to compete.
The multifamily we own
We also do site visits on properties we already own…
I have a 23-unit townhouse complex that we bought out of foreclosure.
When we do site visits on properties we own, we don’t let the property management team know exactly when we’re dropping into town.
We like to show up unannounced, when they’re not expecting us.
Think of it as a spot check without them knowing.
This gives us the opportunity to tour our property in its current state… among other things, we look for general cleanliness and how it’s being maintained – from an upkeep perspective. And we’ll go into vacant units to check the condition inside.
Then, we’ll sit down with the management team and talk about the items that they need to work on or fix. Plus, we’ll talk about the things we saw that are good. These meetings can’t and shouldn’t be all Negative Nancy.
But we do need them to know that these spot checks are simply to see if they’re doing what we hired them to do and if they’re doing what they say they’re doing.
So…
Hopefully you’ve gleaned some helpful info about site visits on properties you interesting in buying and those you already own.
What do you look for?
When you do site visits, what items do you make sure to check out? Share below.
Visit a potential multifamily property in person if negotiations are going well.
Spot check properties you own to make sure the property management company is managing it well.
Check the big exterior items every time – windows, parking lot, etc.
Christopher Urso
is the founder of URS Capital Partners and National REIS. Chris has been investing in real estate since 2001. Over the years he has been involved in all aspects of real estate, from single-family fix and flips, buy and hold cash flow houses, and finally to apartment buildings. His real estate investment career only took off when he purchased his first apartment building 3.5 years ago. He now controls over $15,000,000 of apartments and has raised over $8,000,000 of private money in just over 3 years. He now structures investment partnerships to acquire large apartment complexes and also private coaches investors helping them purchase their own apartment buildings.