Due diligence: Does anyone have.....

A good 'due diligence' checklist of things a new to property manager/management company should inspect and evaluate to assess the physical/financial status of a property that they are about to assume management for?

I am about to assume management for a property and need to get a lot of questions answered so I can assess it's current condition/situation and develop a plan of action going forward.

I have looked at the property (drive through), but have not mystery shopped it, so I do not know what the interior of the property looks like. Current manager in place is there on a temporary basis and the employer has chosen to keep this person out of the decision. I was specifically asked not to mystery shop it and have not had the time to send a friend to do it for me. I have looked at apartmentratings.com and do not find anything real current, but the property has a common name and a search by name yields 4 pages of results.

I just want to know what the current condition of the property is and not have to fix one problem only to find 3 more; nor do I want to pay 5 times to address the same issue.

I'll look for one. But I would look at the biggest one first, RENT!! Do a market survey to find out what the competition is renting at. You can do this before you start.

Go straight to the leases when you can. Check the following:
1. Current rent
2. Expiration date
3. Is it month to month, if so, are they being charged the right amount?
4. Prepare a rent increase schedule for the entire community to start immediately. Get your letter ready to go out as needed.

Start writing your Craigslist ads and have them ready to post.
Google them to see where they are advertising. Shop rates for advertising.

Do you need to fire the landscaper or does it look good?
Shop your competition and start preparing your leasing presentation.

These are just a few things you can do before you start that will give you more time to do what you actually need to do.

I'll check my files for a take-over form and e-mail it to you.

Good luck on the new job!!!!

Johnny, you might consider calling the local Apt. Guide, For Rent, Apartment Finder and any other ad service representatives and asking them outright for information. I have done that with some success whenever I am going to an area I know nothing about. I like Sandy's suggestion of doing a market survey, but I might go a step further if you have time by shopping all the comps instead of your community. I would also take some detailed property photos on a Sunday afternoon when you likely would not be noticed. Photos can give you a lot of information as to approximate condition of siding, roofs, windows (look for wood rot, age), landscaping, any drainage issues that may be affecting foundation, cracks in foundation and common areas, such as stairwells. If the exteriors are in good shape, the interiors are probably acceptable. Interior issues may tend to be more cosmetic and you can fix that once you are onsight. Congratulations on the new job!

These are some of the questions I came up with so far... Not all inclusive; but definitely a place to start:

• The last time management entered all units for inspections?
o Preventive maintenance?
o Pest control?
• Review of any open collection issues and address those immediately, either by collecting large balances, filing for eviction, or writing off small balances just to get them off the books (I would ask to write off small balances >$100 as a one-time amnesty for all residents).
• Review documents for move outs within 12 months where residents left owing money; send letter demanding payment within 30 days or submit to collections, with reporting to credit bureaus.
• Review any unpaid bills.
• Ask for a list of approved vendors and make contact. For vendors actually performing services on site; get updated insurance information naming property as additional insured as well as taxpayer identification numbers to keep on site; send updated copies of information to main office.
o Ask if I can use vendors NOT on list that I have experience with if they participate in the bidding process for services
• Ask to see a budget if it has been prepared as part of their process. If not, ask for a worksheet to prepare one. If I can create some savings by renegotiating with current or changing some vendors/contractors; can I get a piece of that savings?
• Also ask to see a market survey if one has been prepared, if one has not been done within the last 30 days, complete within 10 days. Secret shop 3-5 comps within 15 days by phone and in person. Identify what comps we should use and how big of a geographic area we should sample from.
• Resident event early on (ice cream social; potluck style (property/vendor provide ice cream, residents provide toppings to share, property provide bowls/cones/spoons)).
• Maintenance issues
o Paint- when was the last time each unit received new paint?
o Carpet/flooring- when was the last time each unit received new? How long is the warranty on the materials? What vendors did the work and who to call in the event of a warranty issue?
o Appliances- When were they installed new? Serial Numbers? Warranty?
o How to record this information going forward for future reference.
• Occupancy?
• Unit mix?
• Utilities, what is resident responsibility, what is property’s?
• Membership in Sac IREM and Sac Rental Housing Agency?
o Training opportunities for CCRM/ARM certification?
o Training for compliance with Sacramento Rental Housing Inspection Ordinance
o Training for crime prevention? (membership in www.crimefreepartners.org/ or www.crime-free-association.org/multi-housing.htm ).
o Participation in National Night Out? ( www.natw.org/national-night-out-registration/ )
o Mold/lead/asbestos certification (I did recently from other companies, but no longer have the paperwork, so I need to recertify).
o Grace Hill training? ( I have completed many of the online courses while I was with US Residential, but no longer have access to my training profile)
• Petty cash?
• Vendors for office and maintenance supplies? Contact information? Online ordering setup?
• Change voicemail message and password (prefer any voice other than my own)
• Security monitoring password?
• Passwords/usernames for any and all systems in place
• Any deferred maintenance? Plans for capital improvement?
• Contracts and contractors in place for services?
• Personal and property goals: 30-60-90 days.
• Money collection? Deposit slips/stamp/desktop scanner (electronic deposit)?
• Emergency contact information: Courtesy patrol/security/fire/after hours maintenance?
• Email and website update; update corporate website for errors, add interior unit pictures/floorplans/site map. Add property Facebook page; launch raffle for ‘something’ to encourage participation amongst residents.
• Safety audit; all exterior lights working, any trip hazards, fire systems, MSDS sheets
• Tax ID # and parcel # (for new applicants with housing choice vouchers)
• Trash collection service; see if we can get a large roll off bin for residents to discard bulky items, conduct an e-waste collection, clear out maintenance shop of all old hazmat items, conduct a property wide household hazardous waste collection as well as a roundup of excess medications.
• Landscaping: tree trimming (for safety/appearance/tree health)/seasonal color/fertilization, assess for proper operation of sprinkler systems and adjust to water only for 15 minute intervals between 2 and 4 am.
• Resident selection plan/application process/lease and addendums/sample resident file?
• Marketing venue and traffic source review.
• File audit.
• Unit turnover process:
o Flat charge sheet for damages?
• Turn methodology:
o Photograph damages before initial clean/trash out.
o Initial clean/trash out
o Pest control (preventive while empty before any work begins)
o Photograph damages after initial clean/trash out. Determine if paint/flooring need to be replaced.
 If flooring is to be replaced or just cleaned, paint first. Reserve carpet cleaning for day before scheduled move in.
o Maintenance:
 Check operation of all appliances/systems.
 Replace air filters (write month/year of installation on frame).
 Replace batteries in smoke/CO detectors.
 Replace light bulbs as needed.
 Replace/clean all light fixtures and covers (interior and patio/porch/balcony).
 Recaulk tubs/sinks/countertops/windows (remove old caulk and replace with new).
 Check plumbing fixtures for leaks.
 Check for and fix holes in walls; retexture if needed.
 Rekey/replace locksets (if replacement due to damage, charge resident). If rekeyed, ensure lock is not MASTER KEYED and property keys are properly blind coded.
• On the subject of lockset replacements, can we go with ‘SmartKey’ Cylinders until all locksets have been replaced with like hardware? ( www.kwikset.com/SmartSecurity/Re-Key-Technology.aspx )
 If units have exterior storage closets, make sure they are keyed to the unit key.
o If unit is to be painted, remove switch plate covers and soak to clean before replacing.
o Record model and serial numbers of appliances and compare to what is on record.
o Paint (is this done in house and do we have a sprayer, if not can we get one to share with the other properties)
o Flooring replacement
o Final clean
o Carpet clean if not replaced.


Did I miss anything?