Inspections are one of the most important parts of the acquisition process.
They’re our opportunity to assess/source/confirm:
-Condition of all MEP
-Structural or foundation issues
-Environmental issues
-Total scope of work
-Costs for each portion of the renovation
-Lease agreements, rents, occupancy
-Legal and title issues
-A litany of other items (do 50 cats live under the property, is the neighbor always screaming at people, etc.)
We conduct a full house inspection by a licensed general inspector.
Specifically, one who has a background in construction and is familiar with our development process (we’re not worried about peeling paint).
We also do a plumbing inspection to assess the condition/material of all pipes and sewerage taps- these are done by licensed plumbers.
Sewerage issues can turn into a finger pointing game between owners and the city- something we’re always careful to inspect.
Through these reports, we verify the age/condition of all MEP and structural components.
2002 water heaters mean we’ll be accounting for this replacement cost, watch out for cast-iron.
While doing inspections, we’re also pulling all permits associated with the property to ensure no un-permitted work took place.
If the property is in turn-key condition and you can’t find a permit, not a good sign.
We then bring in our sub-contractors to provide estimates for each scope of work.
From window and siding to plumbing, we need a firm idea of what each portion of the renovation will cost and how long it will take, while still accounting for the unknowns in the form of contingency budgets.
Nobody knows what’s behind the walls, so we need to account for that what if.
We’re looking to ensure that we can add value and then rent these apartments in a profitable, long-term manner.
The inspection process allows us to solidify the inputs that determine the above.