Agency Due Diligence Services
M-8 has experience in the completion of required due diligence for agency mortgage lenders, with our principals having extensive experience in projects nationwide.
Our project expertise includes:
FHA/HUD 223(f): Under the Multifamily Accelerated Processing (MAP) Program; purchase or refinance of multifamily rental housing.
FHA/HUD 223(f)/223(a)(7): Purchase or refinance of multifamily rental housing and healthcare facilities.
FHA/HUD 232/223(f): Under the LEAN Program; purchase or refinance of existing nursing homes, intermediate care facilities, board and care homes and assisted-living facilities with or without repairs, or existing projects not requiring substantial rehabilitation.
Fannie Mae Physical Needs Assessments (PNAs) and Freddie Mac Property Condition Reports (PCRs) - Fannie Mae PNAs comply with the requirements of the Fannie Mae Multifamily Selling and Servicing Guide, and Freddie Mac PCRs comply with the Freddie Mac Multifamily Seller/ Servicer Guide requirements.
As part of our service, we will provide consultation throughout the underwriting process to establish appropriate reserve requirements that protect the lender and will be acceptable to the borrower. Our reports have supported successful closings for multi-family and other commercial properties throughout the country. Our principals draw on experience working directly or indirectly with most major agency lenders.
Property Condition Assessments
We offer Property Condition Assessments (PCAs) which fully comply with the most recent standard (ASTM E2018-15). Our PCAs provide a detailed engineering evaluation of structure, building envelope including roof, sidewalls and doors and windows; interior finishes including floors, walls and ceilings; mechanical, electrical, plumbing, HVAC; fire suppression and life-safety systems.
Our inspections include the entire property: walks, roads, drive and parking areas and landscaping including storm water runoff and drainage. In addition to current conditions, we typically estimate remaining useful life expectancy of all site elements and systems, and prepare cost estimates for required or recommended near-term repair or replacement.
M-8’s reports can be readily tailored to a client’s specific needs, such as including short-term or long-term forecasts for owned or leased property. Our PCAs and related agency reports are accessible and comprehensive. The reports are intended to provide all the information that is needed to structure a favorable real estate transaction, but also to inform the reader as to the true condition of the property.
For proactive property owners, or asset managers, we can provide optimum maintenance protocols, recommend upgrades for energy efficiency and calculate cost savings. If green building or site elements are of interest to an owner or manager, we can provide expertise in selecting the best options from a wide range of available products.
Environmental Site Assessments
A complete due diligence process includes a Phase 1 Environmental Site Assessment (ESA). Industrial property lenders and investors routinely require ESAs either as part of a loan application package or as a condition of closing. M-8’s ESAs fully comply with the most recent standard (ASTM 1527-13). This standard updated the definition of a Recognized Environmental Condition (REC) and Historic REC (HREC), and also introducing a new term, Controlled REC (CREC).
While most firms are able to identify RECs, M-8 strives to mitigate any impact on the deal, through comprehensive research and a seasoned approach towards managing these potential risks. We have long term relationships with a variety of environmental specialists across the country, allowing quick resolution of any identified issues.
If a REC such as groundwater or soil impacts triggers the need for additional investigation, we can complete in-house Phase II ESAs cost-effectively and quickly – using our own resources. We have extensive experience in virtually all aspects of environmental service, so if tank removals, limited remediation, or other corrective action is required, we can help.
In the event that the Phase I ESA identifies a potential vapor intrusion condition (VEC) we can also assist with indoor air assessments or other required follow-up.
Opportunity Zone Consulting
Our PCAs are designed to be an integral part of an Opportunity Zone (OZ) investment, or a long-term ownership position. PCA recommendations always reflect the business priorities of the client, and typically will improve the marketability of the property.
M-8 PCAs provide a detailed breakdown of all components of a property, including the site, building envelope, mechanical, electrical, and life safety systems. Included are recommended upgrades in the near term (typically 30 months) to meet OZ requirements for reinvestment in the property, as well as cost estimates for realistic reserves for needed replacement and maintenance for ten years and beyond.
We view our services as key in a successful execution of an OZ project. Our recommendations include cost estimates which allow our clients to develop realistic capital investment projections. We can also flag expensive pitfalls for a new owner. With the uncertainty of required investment, a promising deal can in fact result in negative returns for investors.
Finally, M8 can provide expertise in managing repairs and renovations for an OZ property. We can provide recommendations for high quality contractors, assist with specifications and bidding, or perform turn-key renovations or upgrades.