Definition / Objective
Report that identifies the necessary repairs and improvements, their cost, and concludes a replacement reserve schedule and a proper replacement reserve rate for a property
- Real estate funds (Acquisitions)
- Buyers/ Investors
Property Types / Opportunity
Support the due diligence and acquisition process during the purchase of a property:
Negotiation – repairs and deficiencies are usually paid for or resolved by the seller – this can have an impact on the negotiated net sales price.
Estimate CAPEX – projecting the replacement reserve rate can be difficult and require precision and expertise. This can impact the projected cash flow of a purchase and the projected profitability.
Approaches, Relevance & Methods / Solution
Report based on the ASTM-E2018-15 standard, Property Condition Assessments: Baseline Property Condition Assessment Process (ASTM International).
Evaluation of the physical and functional condition of a property with a technical team of architects, and/or engineers with the purpose of identifying and classifying the needed repairs and improvements.
Deliver a report that identifies the short term, medium term and long-term repairs / replacements needed for optimum operation. Construct a reserve replacement schedule and conclude the reserve replacement rate needed. This will refine the cash flow projections for the property.
Deliverable Structure & Scope
A. Summary, description of the physical and functional status of the property and recommendations for rehabilitation
Repairs needed in the short, medium and long-term and the respective costs to repair or replace
Summary of immediate repairs and cost replacement schedule
B. Purpose, Scope, limitations of the report
C. General condition of the property
D. Structural condition
E. Interior condition
F. Infrastructure condition
G. Fire and safety system condition
H. Full reserve replacement Schedule and projected reserve rate
