Verifying Repair Credits Negotiated On Apartment Investments
During our recent acquisition I negotiated repair credits from the seller and in this video I talk about how we went about verifying those repairs. During the due-diligence period I performed an inspection of all 77 units of this apartment complex. I made notations and took photos of deferred maintenance items and things that I knew would need to get repaired. I also hired a roof contractor to inspect the roofs. After I compiled all the information and emailed an repair request to the agent as a condition of the deal closing. The seller was agreeable with my request and we agreed on a cost schedule that would allow the seller to make the needed repairs or as many as he could prior to closing. Any repairs the seller did not complete would entitle me to the credits as agreed on the cost schedule. As we approached the closing and followed up with the agent about these credits. The agent said that 90% of the repairs had been done. I always want to be easy to do business with and was almost ready to believe what he was telling me. For me to verify what they were telling me meant taking a 6 hour flight and not feasible. It wasn’t a problem because I had already done my due-diligence and vetted several property management companies that I planned to contract with. I asked the company I chose to check it out for me. I sent them my repair request, which included photos to make it easy for them. The agent claimed 90% was done but my management team found out that was not the case.
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I just returned home last night from this recent acquisition of a 77 unit apartment complex in an out of state emerging market. I was having a great time and all the activities and decision required on the transition of a new property had me totally energized and excited. Our property management team was instrumental to getting everything setup and make the transition as smooth as possible.
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