Hidden Liability

Just closed on a small multifamily deal in Tampa, expected cap rate was 7.5%. However, during due diligence, we discovered an unexpected expense - a pending lawsuit from a former tenant. This added $15,000 to our initial costs. In-place rents were lower than expected, but pro-forma rentts show potential for a 10% increase. Our value-add plan includes renovating units and increasing rennts. Despite the srprise, we're confident in our ability to maximize profits. The key takeaway is to always bduget for the unexpected and carefully review property records to avoid hidden liabilities.