advice on a potential first deal.

I’m looking at a property that is not listed on the mls. I found them through investors. I do not know them personally. It is a 3family that has been totally gutted out, all the work is new in all the units (water heaters, new piping systems, floors. etc.). They said the work will be guaranteed for a year (I believe, I’ll have to double check). I’ve done a walk through on the property I see what they are doing. My friend who is a realtor, recommends that I use her on the deal (and ask the owner to pay her 3% commission) because I need representation. My two questions are

  1. What can she do for me that I can’t do for myself? I feel like I would be getting a great deal on the property already, so the price isn’t my issue. I’d know to ask for comps/find someone to run them. The property will appraise, based on my familiarity with the area.
  2. What questions should I be asking the seller to make sure I am protected/making a sound investment?

thanks so much!

  1. Nothing ,unless you need help carrying the check to the bank.
  2. You should be asking to see the receipts of the new items that were installed and inspect everything else. You should ask what the rents are going to be(assuming empty),so you can work the numbers. You should know what the taxes are. Will the seller rent the property out and then sell it and what would be the price difference and would those numbers make for a good deal.
    You leave a lot out here and it is hard to advise without more information about the deal and what you are expecting out of the deal. Why are you investing in 3 family as opposed to other types? It also occurred to me that your Realtor friend may be right that you need representation in sorting out cash flow properties, if the Realtor has any experience with multifamily properties or is a commercial property specialist then I might sit down with the Realtor and ask him the same questions that you have asked here. Then write down the answers and go over them in detail to see if they help or not.
  1. No need to get a Realtor in the middle. She wants in so she can get paid, that’s all there is to that. That 3% commission is money someone (you or the seller) can’t bring home. You don’t need a Realtor.

  2. If you’re buying to hold, get an independent repair estimate and do your own due diligence. Don’t believe anything the seller tells you. If you’re wholesaling it just get it under contract and find an end-buyer. By the way, if you’re new I’d advise don’t buy this house yourself; sounds like a major rehab and you’ll almost certainly get your butt kicked. Wholesale it instead.