Questions to ask when purchasing multi family

I need some insight on the top several questions to ask a broker that has an apartment building listed. I need the must ask questions other than looking at the profit and loss statements. I am looking at large buildings and one of the hardest parts in dealing with a broker is to ask the correct questions so he/she understands that you are interested in the property and will give you all the information needed. Any help that you can give me will be appreciated. Thanks

First find out what the owner is responsible for:
How much does the lawn service cost?
How much are common area utilities?
How much is garbage disposal?

How much are property taxes?
How much is insurance?

Verify everything yourself. Get some insurance quotes on your own. Verify with the county assessor the property taxes. Call around to some different lawn service companies. Ask to see recent utility bills for common utilities.
Ask to see the rent roll. Ask to see the leases. How many units are currently vacant?
Don’t trust P&L statements. Don’t take anyone’s word for anything. Verify verify verify…

To be honest, I don’t ask many questions because I wouldn’t believe the answers. The one thing that is constant in the process is that sellers LIE (early and often). As Justin said, you definitely want to see the leases and you want to look at every unit and all common areas, basements, utility service areas, etc. If you do the deal, you need estoppel letter(s) to confirm that the information you received is correct.

Good Luck,

Mike

List of what you will need to give to th e commercial broker.

1003Borrower Authorization(Letter)4506-T
Loan Submission Check List
Cap Rate
Debt Coverage Ratio
Commercial Rent RollApartment Lending Criteria ProjectionsCommercial AnalysisIncome & Expense Statement

Cap rate is important! Debt coverage is important!
What is the LTV to value 90/10 ?
How much down do you have?
Also call around to other owners of appartments to compare number.

As a commercial mortgage broke I must agree with Mike. I would simply get last three years corp. tax returns, copy of lease agreement and rent role. When looking at the tax returns double check any variations greater than 10% lender will ask.