$120k of Un-Fiery Hell
January 3, 2023
THE PROBLEM
33% of the property reported problems in the past 2 years with the fireplaces.
Every unit in the 9-year-old complex has a natural gas fireplace with wall mounted controls.
FIREPLACE 101
Natural gas fireplaces are made by many manufacturers with glass fronts and very different designs.
It is not possible for assessors to disassemble and review these onsite.
Not even specialty mechanical assessors can do this because of the wide range of vandal resistant screws and construction techniques – especially with glass fronts.
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The probable issues range from: |
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| Very low side: ignitor fouling | $50 in-house or $150 vendor |
| Typical low side: replace ignitor | $250 vendor |
| Average repair | $390 by vendor |
| Typical high side: circuit board, gas valve, motors | $730 by vendor |
| New unit | $5,000 (not expected for age) |
PROBABLE ISSUES
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Based on the standard 250-unit apartment complex using these fireplaces, the exposure would be: |
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| Average cost per repair: | $50 to $730 |
| Number of fireplaces not yet repaired | 165 |
| Total repair costs anticipated: | $8,250 to $120,450 |
$$$ Protected
| |
Risk of finding the problem during acquisition: |
RECOMMENDATIONS| Type of Assessment | % of time caught by Assessment with | ||
| New or unreliable onsite escort | Truthful and knowledgeable onsite escort | Work order and invoice formal review | |
| Standard | 1% | 8% | 95% |
| Specialty MEP | 2-9% | 80% | 100% |
If an assessor has knowledge of the problem, he can discuss it with the site and further identify the real risk for the property to determine where it falls in the spectrum of $8,250 to $120,450.
We recommend ordering a
supplemental
work order w/invoice review
by your due diligence team
to capture risk which is
may not be observable.
Other Due Diligence Educational Learning Series
2
FLOORS
$120k
$$$ PROTECTED
2020-NOW
AGE
250
UNITS
Figure 1
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Figure 3
Demo