Is a 900 dollar residential-style inspection adequate diligence on a 12-unit syndication

Six of eleven pages being limitations is the part that should stop a buyer. Most readers of an inspection report only fully absorb a portion of what is in it, which makes that limitations language even more important to weigh carefully. If most of the document is explaining what it does not say, what did the 900 dollars actually buy.

You are comparing two different products. A home inspection is a visual assessment against a standards of practice document, and those standards are written for residential purchase decisions. They generally exclude estimating remaining useful life, exclude cost estimates, and let the inspector decline roof access when it isn't safely reachable. The report you're holding is doing what that product is supposed to do. It just isn't the product an investor sizing a five year capital plan needs.

The commercial equivalent is a property condition assessment, usually written to the ASTM E2018 guide, and the difference that matters to you is the tables at the back. A PCA produces an immediate repair list with dollar figures and a replacement reserve schedule year by year, and it's typically done by someone with a building science or engineering background who brings specialists for roofs and mechanicals. On a 12-unit, quotes in the 3,000 to 6,000 range are ordinary, and roof access is a scoping decision you can insist on.

So the specific gap in your folder: your model's 62k over five years has no independent basis. Nobody with a report on file has said the 27 year old roofs have five years left. If they don't, one roof replacement can exceed the entire reserve line.

What you can reasonably ask for: the PCA or a roofer's written report with remaining life, the seller's maintenance and invoice records for the roofs and boilers, and the sponsor's basis for the 5,200 per unit figure.

Whether a sponsor's diligence choices create any claim for you is a securities and contract question for a licensed attorney, and it depends on the offering documents. The condition question you can evaluate yourself, and the answer here is that you don't have the document that answers it.

The inspector didn't say the roofs are fine, he said he didn't look at the roofs. Those aren't close to the same sentence and the sponsor's reply treated them as if they were.

Worth asking what the drainage looks like in a heavy rain and whether anyone pulled the permit history at the county. On a 1998 building in a secondary market, whether the parking lot has ever been resurfaced matters, because that's a 40 to 80k item people leave out of five year plans constantly, and no residential inspector is going to price it.

Genuine question worth putting to the sponsor: if you ask for the PCA and they say no, is that the answer, or does it just mean they're ten days from closing? Timing might explain more than philosophy here.

Take an eight-unit building: 5,200 per unit over five years is roughly one water heater, one turn, and nothing else. Not one roof, not one boiler, not one parking lot. Whether or not the PCA gets ordered, run the capex line at replacement cost divided by remaining life and see what it does to the distributions. On a folder this thin, it likely eats the year three and four numbers entirely.