Buying a Building: Things I Look For

Much of what I write about here is about the design and construction process - which is *after* you’ve got the building in your possession. But what about when you’re house or building hunting, and you’re trying to figure out what issues might be awaiting you if you buy it? And what opportunities might be hidden in plain sight - cool stuff you’d be able to do with what’s already there?

Having been inside 1000s of buildings with clients, working as a consultant in early stages with clients looking to buy, working on 100s of renovations, and being a buyer, seller, renovator, and owner of real estate myself…it shouldn’t surprise anyone that I’ve got a list of stuff I look at when I tour buildings. Whether it’s for myself or for a client, I’m laser focused on certain things that can make or break a building.

Basements…where all the action is!

Before we dive in, a word about realtors and brokers. Many of them are awesome, and their expertise in their market, guiding negotiations, walking homeowners through the steps of acquiring financing, lining up details for closing, and advising what can be a very stressful process cannot be overstated [as long as you have a good one].

But…I have heard many, many stories, and witnessed many, many times, situations where brokers or realtors promise things that are impossible. Things like “you can just add another story to this house” or “the backyard is perfect for an addition” or “you can finish the basement, no problem” or the famous and completely ineffective act of knocking a knuckles on a wall to determine if it’s a bearing wall [doesn’t work, guys].

Whether it’s structure, or mechanical/electrical/plumbing [MEP], or zoning, or building code…a realtor/broker is not trained in these specialties, and has no business promising or advising on these things. The best ones know to point out *possibilities,* and advise that architects or contractors weigh in - but the inexperienced or shady or just nice but uninformed ones can get their clients in some serious trouble with making promises like this.

By the time I show up, and the owner is under agreement, and they want to add a story, and I have to tell them zoning won’t allow it…ugh. Not a good day.

So. As usual, know who is actually empowered and equipped to give the expertise you need. That may be the biggest piece of advice I have on this topic: When buying a building, make sure you’re getting advice from someone who is actually qualified to give it.

Ok, so what else is on my list of stuff I look for when touring a building to potentially buy?

Let’s dive in:

[And of course, disclaimer: this is a *broad* list. It’s not comprehensive. I’m sure I’ll think of 47 things I should have added, right after I send this. And different things matter in different parts of the country. I’m in the Mid-Atlantic and New England, so I don’t mention stuff here that would affect buildings in other parts of the country. The point is, as usual, consult your local experts, and use this as a guide only!]

Oh, and one more thing. I’m looking for expensive annoying stuff at this stage. I’m less interested in whether things need painted, or whether the bathroom tile is cracked. People often sell because they’re faced with big maintenance costs - replacement of HVAC, lead abatement, foundation issues - and it behooves you to find those things out *before* you close.

1. Location/size of utilities

   1. Both inside and outside the building - where are the utilities? I’m looking for panels, electrical service, sewer line/water line, cleanouts, etc - for ease of replacement and service, etc. I’m also looking for the size - I want to be sure that the utilities have the capacity for the planned use - especially for commercial/industrial properties, which may need especially large water supplies or electrical service, depending on their unique needs. It’s not necessarily bad if things are undersized, but we want to know that going in, for budget and planning purposes.

2. Foundation

   1. Foundation repairs can be quite costly, and since they are often difficult, owners are often “out of sight, out of mind” with these things. I’m looking for obvious settling cracks, quick paint/patch/repair jobs by a seller looking to hide something, and/or efflorescence in the masonry [sign of water ingress]. I’m also looking at the type of foundation. Could it handle more load, if we wanted to add on top of the existing building? Could we dig down to create more useable square footage? While I’m not a structural engineer, I’ve seen enough and have enough firsthand experience to have a general sense of these things - and when we might want to bring in structural engineer to really verify things.

3. Condition of sewer line

   1. I’m looking for stuff that’s expensive to fix later…and sewer lines are at the top of the list. I try to trace all the lines through the building, getting eyes on them as much as possible, and seeing how things are tied in. It’s advisable to get the line scoped - a small expense that will tell you a lot of information that you can’t get any other way. And if the seller offers to provide you with video from a scope they commissioned, *get your own anyway.* [Ask me how I learned this lesson…]

4. HVAC - service record, age of equipment, duct runs, state of the condensate

   1. I always go to the HVAC units and check the service record - ideally, it’s attached to the unit itself, and should list routine maintenance as well as repairs. If the unit hasn’t been serviced in a few years…yikes! I try to trace the duct runs, to understand how well they are laid out. Are they insulated? Are they efficient lengths? Is the return sized roughly as I’d expect? Is there dust anywhere on registers? Then I take a look at the condensate - is it run with fall, and/or is there a working pump? Where does it go? And of course, I want to see the outdoor units as well. What kind of refrigerant? [For residential and small commercial, should be R410a] Are they dirty, filled with leaves, etc? Are they accessible for service and repair?

5. Windows/doors

   1. I like to test a few out - how do they move? Are they replacements? Are they double paned? Any evidence of condensation between the panes, clouding, or gas leakage? How is the weather stripping? Do they lock? How many are there, and what’s their orientation? What brand?

6. Roof

   1. I like to get out on the roof if possible, especially if it’s flat. How old is it? Are there any areas of ponding? How does the flashing, crickets, canting, coping, etc look? Is it TPO or EPDM? [Different reasons why you might want each of those…] How is water removed? Are there any obvious repairs? If it’s asphalt shingle, how old does it look [scrape test…how many little pieces of asphalt come off?] If it’s metal, has it been coated? How do the seams look? How do the downspouts, cornices/rakes/soffits, and chimneys look?

7. Electrical: knob and tube, history of wiring, general state of things

   1. Everyone seems to know about “knob and tube” wiring, which is how things were done in the early days of electricity. Many buildings still have evidence of this, but it’s not active…that’s fine. I’m looking for active knob and tube, how many different kinds of wiring are present [and how they’re connected], and generally whether things seem neat and tidy. It’s ok if everything doesn’t match, or if some things look dusty, or if there are a few extra junction boxes. But it’s not ok if you see a bunch of jacked up panels connected to each other, any bare wiring, etc.

8. Electrical: “room in the panel”

   1. In many renovations, you’ll be adding to the electrical load - whether it’s additional appliances or a car charger in a home, or heavier equipment in a commercial space. So it’s a good idea to take a look in the panel, and see if there are any slots left - this gives you a sense of how much more load you can get out of the existing service. I always note the service coming into the building as well - 200A is usually fine for an average house, but would be laughable for a small industrial building. It’s all about context!

9. Basement: state of the first floor joists

   1. Most of the action of a building is in the basement and the attic - that’s where structure and MEP is exposed, and that’s where the lease amount of maintenance has been done. I like to look up at the joists - are they chopped up by years of DIY repairs? Are they patched and sistered, are they twisted, are they undersized? What material are they?

10. Basement: smell test

    1. If it’s musty, that’s not necessarily a deal killer, but I’d like to find the source of the smell. Is it just a sort of normal basementy smell, or is it an indication of water ingress, interior water leaks, and/or a sewer line issue?

11. Attic

    1. Similar to the basement, I’m looking at the state of the structure and MEP. I’m also interested in the insulation strategy, whether [and how] the roof is vented, whether there are signs of animals, etc. One thing I see a lot: uninsulated metal ductwork in an unconditioned attic. This causes condensation on the ductwork, and that drips down onto the ceiling/walls…causing tons of damage that may go unseen for years. Yikes!

12. Room layout/history of renovations

    1. If the spaces are chopped up by later renovations, what could be removed? I’ll look for bearing walls, walls and structure that is original to the building vs what has been added later, and other changes to the structure that would make opening up or changing spaces easier or harder.

Oh yes, all these dumb later walls can come out…!

1. Lead, asbestos, etc.

   1. Asbestos and lead are quite common in older buildings. If undisturbed, they’re not a problem, but if you’re doing a renovation, you’re going to disturb these things. Asbestos is usually found in pipe insulation and in floor tiles [hint: 8x8 tiles are usually asbestos, whereas 12x12 are vinyl.] Lead is usually found in paint. It’s not hard to remediate either one of them, but it may be quite expensive. So I always look out for them!

2. Landscape

   1. Often overlooked as purely an “aesthetic” issue, I like to take a close look at the landscape near the building as well. Do I see any tree roots close to the foundation, or foundation plantings holding excessive water next to the foundation, or tree branches overhanging the building, or trees that look like they’re going to come down, or an old irrigation system that’s leaking or in need of maintenance, or decks/patios that are in disrepair or causing water issues? I also look at the grading - is it moving away from the building? How does the neighbor’s grading intersect with this building? All of these things can become major issues!

3. Insulation

   1. For me, this one is mostly about operating costs. If a building is poorly insulated, it will be expensive to heat and cool…and while that seems like small potatoes when we’re looking for structural issues or a blown roof, it will quickly become a huge issue after you move in. Adding insulation can be an expensive proposition, so I’m looking at what’s there, how more might be added, and to what extent we may have to enlarge the renovation scope to handle this issue.

4. Exterior

   1. What is the exterior siding or cladding material, and will it need to be repaired, changed, etc? Old buildings can often have a series of layers, when owners in years past may have just covered over stuff rather than done it right…and this can get quite expensive. I’m looking for whether brick needs to be repointed [is there evidence of spalling from using the wrong mortar, etc?], whether the vinyl siding may be hiding issues beneath it, what aesthetic issues we may run into.

5. Finishes

   1. This is less about things falling down or not meeting code [although that can be the case!], but about the general expense needed to bring a building up to modern standards. And, what seems like cosmetic issues in the finish can sometimes be evidence of larger issues. I look carefully at the finishes to see what could be saved [cool old architectural details], and the hassle factor of updating dated/tired kitchens, baths, interior trim, etc.

6. Zoning review

   1. This one is less about being onsite, and more about doing some analysis back at my desk. Ideally I’d have a recent survey, but if I don’t, I can still review the zoning - what’s allowed here? What site constraints will I have? Are there any overlay districts that may present challenges? Zoning is one of the biggest “gotchas,” and where I see buyers getting promised all kinds of incorrect things from realtors and brokers. This is all highly jurisdictionally dependent, too, so having a qualified expert [usually an architect, but a zoning attorney may be needed as well] is imperative. Once you buy the building, you can pay to change or fix almost anything - roof, MEP, structure, finishes - but you can’t change the zoning.

Phew…that’s quite a list - and believe it or not, there’s a lot more! When I visit a site with clients, my mind is buzzing the whole time, with the lessons I’ve learned, and what 20 years in the industry have taught me, and with the new things I see every day.

The key is to work with folks who are going to give you the straight story when you’re looking at this stuff, and who aren’t trying to sell you anything.

And the hardest thing of all - don’t fall in love…try to remain objective!

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