an inspection of real property located...

Prepared for:

Prepared by:

File Number: C13-099

111 Harbor Boulevard, Orange, CA 92831

Report Date: January 10, 2013

Date of Inspection: January 8, 2013

Jeffrey M. Key

Chandler D. Endresen

Mr. Thomas Jefferson, President

Tustin, CA 92782

An Inspection of Real Property Located At:

Next Step Property Management, Inc.

1450 Yale Avenue

Sample Report: This sample report includes information on multiple properties, to maintain confidentiality and to demonstrate features of interest.

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EXECUTIVE SUMMARY

Property Type: 61-unit Apartment ComplexProperty Address: 111 Harbor Boulevard, Orange, CA 92831Loan/Property ID:Borrower/Owner: Orange City Properties, Ltd.

Property Information

No. Buildings: 7 Occupied Units Inspected: 4

No. Units Inspected: 8 Unoccupied Units Inspected: 4

Management: Owner: Professional: On-Site Manager:

Name of Person Interviewed: Jan Brown, on-site manager

3%

Yes No N/A

Yes No N/A

Yes No N/A

Yes No N/A

Yes No N/A

Subject: 111 Harbor Boulevard, Orange, CA 92831

Have there been any recent fires, floods, code violations, major damage?

123-55-4321

Does manager/owner report any down units?

Has management/owner performed any work to deal with ADA issues?


Current vacancy reported by Manager/Owner:

Is management/owner aware of any hazardous substances, aspestos, mold, etc.

Does management/owner report any lawsuits related to the property recently or in progress?

The subject is a 61-unit, 2-story apartment complex with 7 buildings of wood-frame construction with stucco siding. The buildings include studio, 1-, 2- and 3-bedroom units.

The property lies roughly two miles north of SR 22 and is near Anaheim Stadium. This is an older neighborhood but there are other similar newer properties nearby along with oldercomplexes. There is some demand from nearby Chapman University. Overall the condition of the property seems to be average for the neighborhood, being fully functional but with a few items worthy of attention.

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EXECUTIVE SUMMARY, Continued

Limitations in Field InspectionsYes No

Yes No

Overall Condition

Adequate or

Better

Needs Some

Work

Substantial

Work Needed

Poor:

Comments

Most noteworthy items of incurable deterioration or deferred maintenance:

Minor-to-moderate deferred maintenance or damage noted in numerous places. With repairs noted, condition should be fine.

One wall in the carport has been damaged and should be inspected further.

Not all units are equipped with GFI circuits, a possible safety issue.

A few large trees need to be trimmed away from the buildings.

Very few observed areas of minor deferred maintenance and/or deterioration. Property is in generally good shape.


Property is functional but has areas of substantial deferred maintenance and/or deterioration. Possible effect on marketability; some repairs worth attention now, especially Life & Safety.

Property has serious areas of deficiency and will likely suffer in terms of value and marketability. Greater potential for legal liability. Deal with issues ASAP.

Any limitations to access?


Was knowledgeable manager/owner available to answer questions?

Multiple areas of the asphalt and concrete have alligatoring and/or cracking.

A couple of the inspected units have minor wall, cabinet and bathtub damage.

One or more areas have minor paint and stucco damage.

Generally the property is in reasonable condition, with most of the structures having received a suitable amount of maintenance over the years. It may be that the property is "grandfathered" with respect to the lack of GFI breakers. Portions of the facility are actually in rather good condition, whereas other parts need some attention as noted. It may be that the carport wall should be inspected by a specialist. With the repairs noted herein the property should be able to continue effectively for the foreseeable future.

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NOTE: See important conditions and limitations on the following page.

The payment for this assignment was in no way contingent on the results reported herein, nor with any requirement for a particular conclusion or recommendation by the inspectors.

The field inspection was performed by Mr. Chandler Endresen, who has the necessary experience, and formal training, in real property inspections.

Mr. Jeffrey Key did not inspect the property but has reviewed this report. Mr. Key has the necessary field experience, and formal training, in real property inspections.



CERTIFICATION

This inspection report has been prepared after diligent personal inspection by the person noted below. Although there are certain limitations in the scope of the assignment, noted elsewhere, we have carefully reviewed the subject property; the results in this report are the true and unbiased conclusions of that field inspection.'

The inspectors have no existing or prospective business interest in the property that is the subject of this assignment.

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Scope of the Inspection and Limiting Conditions

Field Inspection Performed by:



Chandler Endresen

The objective of the assignment is to determine the overall condition of the property, and to identify specific areas that are in need of special attention. This report is not intended to provide the level of detail needed to obtain bids for repairs, nor to prepare a precise budget. It does not detail every component that could be given attention, as that would have diminishing returns for the client and would have a significant impact on the fee. This inspection is not intended to satisfy the requirements of a full safety inspection. Client is aware that Key Inspections can arrange for more-comprehensive inspections, but that is not the agreed-upon scope in this assignment. By noting the presence of smoke detectors and/or GFCI devices, we do not imply that we have checked all devices; in fact it was not possible to inspect every unit.

Despite a careful tour of the property, it is almost certain that not all conditions requiring attention have been uncovered in this assignment. Foundation problems, underground piping damage and pipe leakage within walls are just some examples of problems that might not be uncovered except by inspection by a specialist. It is commonly expected that such issues are not included in industry standards of practice for an inspection of this nature. We may observe one of these conditions, but that would not suggest that there are no other hidden conditions present.

We have summarized and highlighted the areas that seem to be most worthy of attention. However, the client is urged to read the entire report, in case there are areas of sensitivity that we are not aware of. Where a condition occurs repeatedly, we may show a representative photograph and descriptive text, especially when the condition is not critical to the ongoing health of the property. The liability of Key Inspections and its independent contractors is limited to the fee paid for this inspection assignment.

A property such as the subject will always experience some physical deterioration in the normal course of business, and we have not attempted to fully document such wear. We may refer to wear and tear or signs of age in the report; these will refer to issues such as non-structural cracks or surface imperfections in concrete and other finishes, common scratches, discoloration, blemishes, separation and the like. If there is not a competent property manager in place we recommend that one be retained that can monitor the overall condition of the property, as some minor conditions may become more serious over time. Some components that were functional during the inspection may not remain operable thereafter.

Also, there are often areas where ongoing maintenance is needed, but might not be evident during this inspection. Maintenance of HVAC systems, clogged or slowly clogging sewer lines and drains, repair of broken irrigation pipes, damaged or leaking water features, or replacement of burnt-out lights (not visible during a daytime inspection) are simple examples of unobserved issues that would typically be part of a maintenance and repair budget.

This report summarizes the main observations and conclusions resulting from a careful, but limited overall inspection of the subject property on the stated inspection date. It was not possible or practicable to inspect every aspect of the premises and some portions were inaccessible. The scope was agreed to in advance, and included a diligent, but less-than-comprehensive review of most of the exterior of the building(s) and limited portions of the interior(s). Unless otherwise noted, we have not inspected the roof(s).

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LIFE AND SAFETY ISSUES

No Substantial

Issues NotedSome Issues

NotedPoor Condition or Not Present

Not Applicable

Not Inspected

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The fire extinguishers appeared to be current and charged.

Dangerous Walkways

Water Heater Safety

No. of Public Fire Extinguishers:

Items Requiring Attention:

GFI units were missing in the inspected units within Building B; it is uncertain as to whether the property is grandfathered. No photo.

Other Comments

The wall at one of the carports has been damaged; the extent is undetermined. A more-detailed structural inspection may be worthwhile. See photo LS1.

Unsanitary or Unsafe Conditions

Unreinforced Masonry

Obvious Foundation Issues, Steep Slopes



Pool Gates Self-Close

Central Fire Alarm System

Pool Safety Drain

Smoke DetectorsGFI BreakersBalcony/Stair Railings

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Photo LS1. This wall in the carport was substantially damaged; it may not pose a safety risk but may be worthy of further inspection by a qualifiied engineer or contractor.

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EXTERIOR/COMMON AREAS

No Substantial Issues Noted

Some Issues Noted

Poor Condition or Not Present

Not Applicable

Not Inspected

Other Comments

Signage

Site Lighting

Several areas of the landscaping are in need of work to enhance the overall curb appeal of the property, from trimming the large trees to adding additional ground covering.

Multiple areas of the landscaping are in need of work. See photo EC1 & EC2.

Several areas of the asphalt have alligatoring throughout the driveways and parking areas. See photo EC3 & EC4.

A few areas of the sidewalks have minor cracking. See photo EC5.

Recreational Facilities


Parking – Striping

Irrigation

Parking – Paving

Entrance Gate

Pool Area

Pool



Laundry Room(s)

Sidewalks

Pool Gates Self-Close

Landscape

Paving / Driveways

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Photo EC1. Several areas of the landscaping are in need of work to enhance the curb appeal of the property.

Photo EC2. A few large trees need to be trimmed away from the buildings to prevent damage.

Photo EC3. Multiple areas of the driveways and parking areas have alligatoring asphalt.

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Photo EC4.

Photo EC5. A few areas of the sidewalks have minor cracking.

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EXTERIOR PROPERTY CONDITION


Some Issues Noted


Not Applicable

Not Inspected

Roof

Walls - Paint Windows Stairways Rails Fire Escape Carports Garages



Rain Gutters, Downspouts

Walls – Siding, Stucco

Other Comments


A few areas of the stucco have minor damage. See photo EP1 & EP2.

One or more areas of the paint need work. See photo EP3 & EP4.

At least one carport has moderate-to-major damage. See photo LS1 in previous section.

The two-story structures are of wood-frame construction with stucco siding and flat roofs. Each building has its own set of stairs that lead to the upper units, reached by a common walkway. The exterior has received a limited amount of maintenance and is in average condition with only a few inadequacies noted. A few areas of the stucco and paint have minor damage throughout the property, including the one wall in the carports, which should be inspected by a structural specialist. Eventually the stucco will need a complete paint job.

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Photo EP1. A few areas of the stucco have minor damage.

Photo EP2.

Photo EP3. One or more areas of the stucco call for paint work.

12



Photo EP4.

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INTERIOR PROPERTY CONDITION


Some Issues Noted


Not Applicable

Not Inspected



At least one unit was noted having minor wall damage. See photo IP1.

One unit was noted having minor cabinet damage. See photo IP2.

At least one unit has moderate bathtub damage. See photo IP3.

Walls

Water PressureBasement, Loading, Storage

Flooring

Ceilings

Kitchen Cabinets

HVAC

Electrical/Lights

Office

LobbyBath Countertops & CabinetsSink/Faucet/Splash

Toilet


Most of the inspected units appear to have received a suitable amount of maintenance over the years; we examined a combination of occupied and vacant apartments. The interiors are in average condition. They contain standard electrical and plumbing systems and a central boiler system is located near the carports. Heating and air conditioning is provided by central HVAC units located on the roof.

Other Comments

Tub/Shower

Water Heater

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Photo IP1. At least one unit has minor wall damage.

Photo IP2. One or more units were noted having minor cabinet damage.

Photo IP3. One unit was noted having moderate bathtub damage.

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SUBJECT PHOTOS

The subject is a 61-unit, 2-story apartment complex with carport parking. .

This is a view in front of the property looking north.

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SUBJECT PHOTOS, continued

Shown here is another view in front of the property looking south.

Shown above is a view down one of the walkways.

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The pool is located in the courtyard between two buildings.

Shown here is the rear of one building.

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Pictured here is a side profile of the building along with the carports.

Here is the laundry room.

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Here is the manager’s living room.

Shown above is the kitchen in a vacant unit.

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This is the bathroom in a typical unit.

The bedrooms commonly include vertical blinds in the windows.

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