Due diligence in acquiring a multifamily asset is sometimes more art than science. Ask any multifamily broker, and they will tell you the multitude of strategies regarding the processes of due diligence that different investors use. At a minimum, due diligence should include a financial review, lease audit, certificate of occupancy status check, contract review and property review, to name a few. As a general contractor-turned-multifamily investor, I find that most people miss eight things when evaluating the existing construction of a multifamily asset. If you are an experienced investor, your typical property review process will include an evaluation of the roofs and foundations, cameraing of the sewer lines to locate problems, a walk of the units to determine make-ready costs and an inventory of deferred maintenance.
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