Multifamily Acquisition Consulting
Multifamily Acquisition Consulting is, of course, shorthand for the investigation into the facts of an investment transaction before committing to do it. It comes from the phrase “due and diligent inquiry” as in “We agree to by your property after making due and diligent inquiries into its financial and economic characteristics that would support the purchase price.” Due diligence is always something that has to be done, but nobody likes doing it. And hardly anyone does it correctly or completely. Buyers often contract for properties making assumptions that are not valid, finding out facts only after money has been put at risk. Often sellers themselves are not aware of certain issues or complications, even though real estate investment remains a caveat emptor business. And lenders are loath to be the “bad guy” and tell borrowers they discover they made when the underwriters conduct serious due diligence before recommending a loan approval.
Consider retaining Darach Property Advisors to conduct a rigorous, complete and truly “third-party” due diligence for your potential investment. Our due diligence protocols mirror those required by the agency lenders, FHA and Fannie Mae, and the major commercial banks. Our reports are thorough, readable, and will contain all the detail needed so as not to impede a financing on purchase. The elements include:
- Confirmation of zoning and certificates of occupancy
- Confirmation of any any outstanding code violations
- Crime reports for the property and the submarket
- Itemization of advertising venues
- Review of leasing policies and forms used
- Review of rent rolls against actual leases
- Property inspection (not in lieu of a PCNA)
- Unit inspection against actual leases
- Confirmation of utility bills and tax bills
- Confirmation of assessment and millage – estimate of new property taxes
- Confirmation of payroll, rates and bonuses
- Double check supplier and vendor contracts
- Confirmation of moveable property inventory
- Confirm limitations of insurance and calculate premiums
- Basic market comparables – confirm comparables used by the appraiser
- Economic maps, employers, econometrics and area reports
Major investment companies can send out one of their trained staffers to conduct due diligence and they may get back good or not-so-good information. Darach Property Advisors conducts a professional rigorous in-depth due diligence that the investor can rely on.
