A building inspection can make or break a deal and for good reason. When you purchase multifamily property, it's important to write an inspection contingency into the contract even if you intend to rehab the property. Taking the time to properly inspect the property can save you from overpaying or making a bad buy.
Choosing the best inspection service is not always easy, especially if you don’t know what to expect. The inspection service won’t find every flaw or maintenance issue with the property but a quality job will provide enough detailed information for you to make a confident go or no-go decision.
When hiring an inspection service, I want to know their background and experience with building construction, how long they have been in the business, how thorough I can expect them to be, how long they need to complete the job and how detailed a report they will provide following the inspection. A lot of inspection services are independent, one-man operations and that’s ok.
As a buyer, after you have qualified the inspection service, the first thing to consider is how thorough an inspection you need. From time to time I will work with a client who simply wants someone with a trained eye to assess the general condition of major elements that could be costly to repair or replace. This is perfectly acceptable and also the least expensive option outside of inspecting the property on your own.
If you are purchasing a building that you intend to rehab, you may only need someone to check out major items like the foundation, structure, and roof. Sometimes, you may be ok just walking your contractors through the property if you feel they are qualified to give a proper assessment. It will depend on the scope of the project you have planned.
Most often, buyers will opt for a full inspection, going through every unit and over all the major structural and mechanical elements of the building. Since multifamily is generally used for apartment rental income, inspectors are going to focus on bigger ticket items. Squeaky floors, scratches, dents and other small maintenance issues may be noted but probably won't be thoroughly addressed.
Depending on the size of the building, you may want to hire an inspection service that can send out two inspectors. One inspector can go over items related to the structure, foundation, windows, roof, mechanicals, etc. The second inspector is then free to go through the units, checking the functionality of the appliances, electrical outlets, plumbing fixtures, and so on. Having two inspectors will add some cost but the time saved and thoroughness of the job will be worth it for some.
For me, reporting is a key consideration. I want to know how thorough the report will be, what details will be documented and how the information will be presented. I've seen almost every technique there is, from the guy who writes the entire report on a notepad from memory following the inspection to a very professional team that provides a web link to the final report that included video and digital photos of all items covered.
Buyers can use a comprehensive inspection report to their advantage. Many sellers don’t know the true condition of their property. Big ticket items like the mechanicals, roof, windows, appliances, structure, sewer, etc. are often overlooked by cash-strapped and out of town building owners. Having a detailed inspection report provides ammo to renegotiate with the seller if you feel you may be over paying for the property. After you purchase the property, the inspection report can serve as a reference guide that you wouldn't otherwise have. That alone can be worth the cost incurred to ensure you are buying right.