How Smart Facility Onboarding Protects Cash Flow And Cuts Risk

Want a commercial property that runs smoothly, keeps tenants happy, and doesn’t torch your cash with preventable emergencies? We walk through our facilities onboarding playbook step by step, showing how to document the building you actually own and set up systems that protect NOI from day one.

We start by defining the site: boundaries, encroachments, gutters that cross property lines, retention ponds, and fences that tell the real story of ownership. Then we get hands-on with MEPR—mechanical, electrical, plumbing, and roof. You’ll hear how we inventory HVAC units by serial number, age, tonnage, and refrigerant, and why installer versus manufacturer warranties change your risk profile. On electrical, we assess service size, panel capacity, wiring types, and main disconnects to plan safe upgrades and avoid the nightmare of shutting off the wrong meter in a multi-tenant building. Plumbing gets a proactive treatment with sewer camera work, backflow mapping, and irrigation timers so you can shut off water in seconds when a freeze or break hits.

Roofs get special attention: warranties, vendor contacts, leak histories, and the unglamorous but critical note like “bring a 16-foot ladder.” We explain how roof access details and routine inspections prevent missed weather windows and interior damage. Beyond MEPR, we dig into the operational layer—fiber and internet availability, network closets, security cameras, and the move from keys to access control so you can add or remove entry in a moment. You’ll also learn how to manage vendor transitions, capture tribal knowledge, and gather every service contract—trash, janitorial, HVAC, elevator, fire monitoring—so continuity doesn’t collapse when big management firms exit.

To tie it all together, we show how to leverage as-builts for mechanical, electrical, and plumbing to reduce TI costs, cut saw cutting, and place restrooms and kitchens where infrastructure already exists. Finally, we convert findings into a pragmatic five-year capital plan that prioritizes issues causing cascading damage, turning owner wish lists into sequenced projects with clear budgets and ROI. Subscribe, share with a fellow investor or manager, and tell us: what’s the one onboarding detail that’s saved you the most money?

Learn more about Blue Commercial Properties on our website.

Transcript

Welcome And Episode Setup

Michael Carro 0:00

Welcome to Blue Dirt, the podcast that digs deep into the foundation of commercial real estate investing. Unlike most real estate shows that focus on deal making and market trends, Blue Dirt gets into the nuts and bolts of what truly builds long-term value, the building itself. We break down how to spot deferred maintenance before it costs you, why a solid preventative maintenance program is a game changer, and how triple net leases can maximize your investment returns. We'll also explore the importance of strong landlord-tenant relationships and how they drive stability and growth in your portfolio. Whether you're a seasoned investor or just getting started, Blue Dirt gives you the practical knowledge to make smarter, more profitable decisions in commercial real estate. It's time to get your hands dirty and build value from the ground up. Let's dig in. Welcome to Blue Dirt, where even idiots can make a killing in commercial real estate. I'm Michael Kierrow with SVN Southland Commercial Real Estate, and I'm joined with Don Redhead with Blue Commercial Properties. Fantastic. This is part two of a two-part episode. Got that? Part two of a two-part episode where we are talking about property management onboarding. And so in the first episode, we talked a lot about tenant onboarding and financials, uh, financial onboarding. But this episode is going to be focused on facilities onboarding and what that actually means and why it's so important for a property manager to take their time at the front end of a relationship to really lean into the facility. So, Don, why don't we talk about what a facility is and then we'll break it down into its components and what you do as a property manager?

Don Redhead 1:42

Yeah, I guess for the facility as a whole, you know, it's it is what it is as far as buildings, uh, outlining property, adjacent property. We're trying to figure out the boundaries and everything that kind of impacts the property, whether there's retention ponds, fencing. We're trying to get a feel for what actually is is is the property itself and where our ownership, you know, ends and starts, and and where the neighbors uh as well. And sometimes, you know, being in the city, sometimes there's there's gutters going into our gutters, and there's there's sometimes the fences on the wrong property, but uh we'll make it through. So there's always something to figure out.

Defining The Facility And Boundaries

Michael Carro 2:23

So, and then within a facility, you know, uh you'll hear us always talk about the the four points that we always focus on is MEP and R, right? The mechanical, electrical, plumbing, and roof systems. Now, of course, there's a lot of other systems, but let's start with those and what's important for you to onboard in each of those systems.

Don Redhead 2:46

Yeah, uh when we go through the onboarding process, it depends on the facility, it can actually take us a few days. And us being as far as responsibility goes, we tend to prioritize the roof first.

Michael Carro 3:00

Okay, but let's go in order of M E P R.

Don Redhead 3:03

M E P R mechanically. Yes. Uh that one, uh, we're very lucky. Uh season one guest, Cheyenne. Uh he is is a great member of the team, and he typically helps us onboard from a property management when we take over a property. He now uh helps us onboard those units and he does a fantastic job. The electrical components of it.

Michael Carro 3:30

The the onboarding is is he's gonna identify how many units are on the building. Yep. He's gonna get serial numbers, size of the units, age of the unit, whether or not there's any warranty. Correct. So he's gonna really dive into that unit to to to log that in.

Don Redhead 3:48

Correct. Yeah, he's he's really he takes a lot of time and pride in in getting all that information. He does a great job. If it's R22, what kind of coolant it's using, are they package units, split systems? He takes his time, uh, any issues that he's identifying, um, you know, historical issues with it. Maybe even when he gets into the duct system, uh, if he's identifying problems with that as well.

Michael Carro 4:13

Okay. All right. So uh so anything else with mechanical that he focuses on? Does he look at any parts that have been replaced, warranty information? How does all that come into play?

Don Redhead 4:24

Not usually as far as parts that are being replaced. I mean, if there's certain ones that are visible, he's he'll say, yeah, this looks good.

MEPR Overview And Process

Michael Carro 4:32

Um I was really more referring to if you if you recently uh you took over a property, but you can tell that within the last year, a a big system was replaced.

Don Redhead 4:43

Not he'll identify like if the condenser was replaced outside, absolutely. Yeah. If say that it's a split system and the condenser is is two years old, but the interior air handler is 10 years old, he'll absolutely notate on that information. Um the good thing is we'll request warranty information from either the the seller uh or the previous management group. We've never really got it, but fortunately, unless the the unit is about a year um old or newer, yeah, depending on the unit, it typically is out of its installer's warranty. Right. Uh, and then it goes to manufacturer. And even if you had you know a local group, as long as you have the serial number, it's delayed. They'll pull it and they'll they'll run all the warranty stuff down. But if it's a brand new unit, it's somebody else and that you had installed, say, six months ago, and and now we've purchased it. We absolutely want that information. Because at that phase, it's a we'll call it bumper to bumper warrant.

Michael Carro 5:40

Right.

Don Redhead 5:41

Everything's covered at that phase. Okay, great.

Michael Carro 5:43

Yeah, now let's go to the E M E P R. The E is for electrical. What do you look for in that?

Mechanical Deep Dive And Warranty Reality

Don Redhead 5:50

That one we've gotten a bit more, I'll say sophisticated on. We are really documenting the age, rough age of the panels, the size of the service, uh, three phase, single phase. We're also looking for yeah, is this panel already I'm gonna say at capacity? Okay. If you're seeing a bunch of blank spaces in the panel, it's typically telling you, hey, there's this this panel isn't overloaded. If you need to say you had a 400 amp service and it was 75% full, you know that you have some ability there. If somebody wants to come in and do somewhat of a serious build out, you have plenty of power to add. You have capacity. You have capacity. Okay. Um yeah, you're also looking for, are they using MC cable, which is the current, it looks like it's uh like almost like an aluminum corrugated look to it. Right. Um the inspector we had do a project for us yesterday. He's seen some old wiring coming out, and it was commercial at I I don't know the exact time, but he made us replace it.

Michael Carro 6:56

And so the building that Don's referring to uh is was built in 1912.

Don Redhead 7:02

Is that when it was? Somebody asked me today.

Michael Carro 7:03

I couldn't remember. So the building was built in 1912. I don't know when that electrical was installed. Probably not that. Looked a little newer than that. So, so um, so you know, I mean, and you know, we've taken over buildings, you know, where um all the electrical was working just fine, but we were doing a renovation, and so we pulled a lot of the ceiling down. And while all the electrical is working, we noticed, and that's built that building was built in 1905. So we're dealing with a 120-year-old building that started off. I don't know what you call the cloth cables. I forget what they had called. There was one they had in there. Well, either way, there's generations of different um wiring over the years, and and the building told the story of yes, that one, that's 120 years old, that's 80 years old, that's 70 years old. I mean, so we ultimately decided, you know, let's tear it all out and and go back in. It wasn't required by code because it was existing, but we just decided it's just it was better for the overall project long term to just do it right.

Don Redhead 8:10

Yeah, and now over here at this this one, they are mandating us to upgrade a lot of stuff. They are maybe was grandfathered in they're just they're not being unreasonable, but they are pushing it. Hey, just clean this up. And of course, we're like fine.

Michael Carro 8:25

And in our buildings, we want to do that anyways, because it is a fire hazard. So in the building, in in what he's referring to, it's roughly 1,400 square feet of a 14,000 square foot building. Well, that one uh unit putting the whole place on fire, nobody wants that. So I mean, we say we don't want it, but we're also willing to pay uh uh for these upgrades to make sure it doesn't happen. Correct. That's the difference. So so we will put our money where our mouth is to increase the safety of these buildings if we can. Correct.

Don Redhead 9:00

Um, so that's the the main thing that you're looking for for electrical. Uh M E P R P stands for plumbing. Yeah, but and one last thing on the electrical, um more for because when you're onboarding the property itself, knowing where the main breakers are, the main disconnects, that can be very helpful.

Michael Carro 9:19

Uh where do you notate that in in the system? Yep.

Electrical Capacity, Safety, And Upgrades

Don Redhead 9:22

Okay. We'll notate uh where those are. We'll also notate um uh same thing with plumbing, where the the actual master uh or the gate valve is where it comes into the building. Uh backflow. If we need to shut off water to the building immediately, we want to know those types of things um you know pretty quick. And it it's it has come in in handy where I forget where we had a freeze event out of one of the properties we manage on the beach, and one of the owners uh who never calls me, calls me on a Saturday morning, goes, irrigation's going everywhere. How do I shut off the water here? Hold up our software. I go, okay, here's where the shutoff valve was. You never would have found it. Right. Unless someone actually did a good job, onboarded it properly. So that was I was pretty pleased uh when it happened.

Michael Carro 10:09

Well, and by the way, so were they.

Don Redhead 10:12

That's right. Hey, sorry, yeah, I don't know where it is.

Michael Carro 10:14

Okay, but uh you gotta just kind of deal with it. But how how valuable is that when you have, you know, an owner call with a major property having an issue, and you're and you keep such copious notes that you can say, okay, and you you tell them where it is, they would have never found it. They obviously looked in advance, I guarantee you that.

Don Redhead 10:35

Oh, yeah. It was buried in this huge amount of vegetation bushes that it was all landscaping. It looks fantastic. But I was like, hey, do you see that red stick sticking up? I go, it's just to the right of that. And he got in there and he turned it off. But I was see, that's kind of unbelievable. So um, but knowing where those emergency shut-ups are is part of the onboarding for us, so we can uh identify those.

Michael Carro 10:58

And you know, that's not something I really would have thought of.

Don Redhead 11:01

So that's yeah, we've we had to learn the hard way. Most of it, just so we all know this. This sheet has only gotten this long because of all the mistakes that we made. It used to be a third of this, and now it's it's like, oh, by the way, we didn't know this, so let's do it this way now. Um, but yeah, that was a good one. And and on the electrical, the other part that we do uh and we'll touch on with this part as part of the onboarding, we also onboard the meter. So we do want to know what the meter number is.

Michael Carro 11:30

Meter number, yeah.

Don Redhead 11:31

Yep, uh, for that, because there's so many times that, especially with the multi-unit property, that they're not labeled correctly. If we're calling for whatever reason, maybe we're gonna turn the power on our name temporarily, and we're gonna renovate it so we do it, uh, or we're just gonna do it because it's been vacant. We want to keep you know the AC running. Uh, knowing that meter number is very helpful. Right. So get that off the meter can, you know, that's the thing on the outside.

Michael Carro 11:59

Well, and how many times, you know, have we been in a multi-tenant situation where somebody says their electricity got turned off all the time because the tenant moved out, but he turned off the wrong meter.

Don Redhead 12:11

Even even when it's labeled on the on the can, the meter, and it says the unit number four, whatever, and we provide them the meter number, somehow it still gets missed, and somebody goes and turns it off and turns this on, it it happens.

Michael Carro 12:26

Yeah.

Don Redhead 12:26

So yeah, that is absolutely uh okay. Plumbing, uh, we already touched on the know where the the shutoff valve is, right? Um, the backflow, right? That's the other part. Um, irrigation, if there's an irrigation timer, that's always important, know where that is because you can have issues. Uh, the other part with the onboarding is we do we do this more when we buy the property, but it's probably not a bad thing. It and it's somewhat we tend to get the drains and everything camered. We get the main sewer lines cammered to know what we're dealing with when we purchase a property. We tend to ask if there's been recurring issues with plumbing during the onboarding. Um, you know, asking about all recurring issues. Right.

Michael Carro 13:10

You are you asking the landlord or tenant or both?

Emergency Shutoffs, Meters, And Documentation

Don Redhead 13:12

We're asking the landlord. Okay. Uh, and we'll ask tenants um as we as we begin to onboard them. But typically we're asking the previous property manager or the owner if there's some recurring issue that they've dealt with. And if they do complain of of plumbing, then we advocate for getting it cameras as soon as we take over management because our goal, as selfish as this sounds, is you we don't want you to see, I'm gonna say me or someone who's who's not one of the regular maintenance guys all that often. And if we're there a lot, it's because there's a serious problem that we're trying to identify. And during the onboarding, we're there a lot. But if that type of issue uh shows up later, then we're obviously not onboarding it properly. So we're coming in, trying to identify the real issues so we can come up with a plan. Uh, and that's one of them. Plumbing. I mean, you can notate what kind of hot water heaters you have um as part of it. Uh, but really, I would say just the biggest thing know where the meter is, know where the back flow is, document all this, know where the irrigation timer is. Okay. All that stuff. Good. And then your favorite, the most important roof. Uh, that one you definitely want warranty information on. Um, if you can get that from the previous group, try to onboard that. Try to onboard the contract if the roof was replaced somewhat recently. Uh, roof access, we like to have that in the system too, so that when a vendor calls us, hey, how do I get to the roof? Okay, there's a ladder here. Hey, you need a 16-foot ladder. We have that in ours. So we know, you know, if somebody calls the the office staff, hey, I'm headed out to your property. What do I need? They can pull up that property, has no roof access, you need a 16-foot ladder. Right. So they can provide that information versus somebody going out, hey, I don't have what I need and then coming back. Right. Um those are the biggest things.

Michael Carro 15:01

I wouldn't have thought of that. That's pretty, that's pretty brilliant. Um almost people. Well, right. But I mean, it's like, you know, if you go out there with a standard 12-foot ladder, right? And then, but but and it's a single-story building, but it's just a higher building, you know, then you've they've wasted a trip. Correct. And they're not happy. Correct. And not efficient.

Don Redhead 15:21

So and it's just, and now there could have been a really potential, uh, potentially big roof leak issue that you've dispatched the roofer that maybe took two days to get there to make the repair, and now you can't do it again, and you get hit with rain again, right? So now you missed the window to to be a you know, make a successful repair and mitigate any additional damage inside. Uh, same thing there. Is there any existing you know, roof leaks? Is there any existing problems um that you know you can share both landlord and tenant? But that is typically um roof access, how to get roof, warranty is the biggest one. And then of course, recurring issues is just across the board uh with the whole the whole property.

Michael Carro 16:04

So um are you done with the roof now?

Don Redhead 16:07

I think so.

Michael Carro 16:07

All right. So I make do you focus on uh do you typically get previous property inspections? Do you focus on anything like that from other vendors? Uh, or do you just rely on your uh your team to do the inspections and get up to speed?

Don Redhead 16:23

Both. Uh we always request um any previous inspections, whether it was done by the property manager previously, uh, anything maybe during a sale, as well as when we do it, our onboarding is somewhat of a of a hybrid uh an inspection. The other part, too, we always focus on MEPR, but when you do take over management, there's a few additional things, such as internet. You want to know what kind of internet is already maybe in the facility, right? It may have fiber. Where is the network closet? Uh, you want to know a kind of access control. Uh, if it has access control, um, what are the codes? What are those kinds of things? That's becoming more and more common. Security cameras, the same thing there. Um, gas, you know, meter setup. You want all of the different kinds of meter numbers, account numbers. Uh, so if you took it over from an existing manager or from the owner, if you can get their logins for all this, all that that will make your life infinitely easier as you go to transfer because inherently they're not going to do it the first time, right? It's gonna just be a lagging, lagging fact. So I forget where we were going.

Michael Carro 17:36

Um well, yeah, that gets the next thing is is you know, reviewing or putting in place preventative maintenance maintenance programs. So we talked about history, historical you know, review of the property, but what about uh PM services for HVAC or even roofs? I know you've incorporated some of those recently.

Plumbing Priorities And Sewer Scoping

Don Redhead 17:57

Yeah. And everyone's such a case-by-case, it's it's a good example. A lot of times they'll have I've noticed this the one thing that many of the owners have done, uh the professional management companies have done is do have typically good PM services in place. And I'm gonna encompass, you know, landscaping, irrigation, um, pest control, you know, roof inspections, HVAC. They tend to be pretty decent with that. Uh we still come in and it's not unless the vendor has done something somewhat I don't even want to say nefarious, they just haven't done a good job and there've been a lot of issues. We'll try to leave them in place um during the transition because it's already a big change for the owner, for the tenants. We're not here to to disrupt things, and there may be some tribal knowledge that we can gain from those groups.

Michael Carro 18:57

Uh when we do take over, it's also an opportunity to build your vendor base with new vendors that you didn't even know about.

Don Redhead 19:03

Yep, that's exactly right. What we have seen, though, that's kind of interesting, when we take over uh a facility from some of the much larger organizations, what we find is they'll they'll all usually use the same exact vendors and they have a master agreement and amendments to that master agreement with these vendors per location. So the second that they lose the contract, the contract for that vendor that's in place stops immediately. Which I thought was kind of interesting. Um, and in some cases, I don't know if it's the maintain management with the other organization and in good standing, but they don't even sometimes make an effort to keep the contract to maintain, say landscaping. Is that right? So yeah, it was kind of interesting. Um, so which goes into the other part, you want all the vendor contracts, right? If you can get as many of these existing contracts, um, trash, uh, landscaping, fire monitoring, janitorial, HVAC, elevator, access control, a lot of these will have long-term contracts, elevator phones, things of that nature. You're going to want to request every single contract that you possibly can because every single time we take over property that's new that has an elevator, it breaks two days. It's like, and and though I don't know what it is. I it's like they're walking out the door and they jam something in there and they break.

Michael Carro 20:32

Yeah. Well, all right. So something that I always have a challenge with as even as a real estate broker, are keys and access. I mean, a building just doesn't have one key. I mean, a building could have a set of 30 keys and where they go and why. We've inherited lockers, full lockers. So how do you I mean it sounds so simple, but that's such a struggle.

Roof Access, Warranties, And Rapid Response

Don Redhead 20:57

Keys and signage are the absolute worst part. I and it was something that we have have struggled with, I think, because of our our nature to kind of just go fast at things. And keys and signs are a much slower, calmer process that are better suited for other people. And I'm trying to be that person. Um, but it is, it's like keys always go missing.

Michael Carro 21:25

Well, if you don't, if you get a key and you don't identify what it is immediately. Oh my god, immediately. I mean, when it's you're handing it to me, and I'm I'm writing on the key or it's getting a piece of gone. It's like, well, what does this key go to? I have it, and I'll keep it.

Don Redhead 21:40

I didn't lose it, keep it for so long, but I don't know where it's it's such a pain. And now we actually do a fair job, and I uh handed out my whole batch to Chris uh because he needed them. But all the employees that are you know maintenance property managers, they drive around with a bag of blank key tags. Oh, I need to be able to do it. Because of I need a bag. You need a bag? I need a bag, that and and then lock boxes. Yes, I have those. Um, I think the problem that I find within this is where we continue to move to access control, uh, coded door handles, which is just the way of the future, because of these keys, it's such it feels not to get a door handle re-keyed for one key is almost as much as the door handle. And that's I think the the challenge that we struggle with, where it's like, well, I'll just try to remember where this key goes, or I'm not gonna re-key these. Right. We've given up on that.

Michael Carro 22:35

People also work differently. It's not this, it's not the simple eight to five, you know, like it used to be, or nine to five. You know, people work different hours. So these access control systems are so much more valuable. Certainly to us, we have them on a lot of our buildings. And, you know, you can you can provide uh access or take it away, you know, in a moment. Uh, and so as opposed to, oh my goodness, this volatile person who no longer works for us, are they gonna come right and then so we have to change all of our lots.

Don Redhead 23:08

So now they have one key, they're not gonna give it back, and we have to go change all these door handles, and it just it pays for it over time. It's very unfortunate. It is an upfront cost, but it will save you uh a lot of headaches if you can move towards access control, it's it is it's it's worth it. Right. It's worth it.

Michael Carro 23:25

So what what pro uh what uh documents, you know, uh construction documents, surveys, things like that, what type of documents are really helpful? Obviously, everything, but what do you find to be the most valuable for you when you're onboarding?

Prior Inspections, IT, Access Control, And Utilities

Don Redhead 23:41

Um if we can get a full set of as built construction documents of what you're saying, specifically uh you know, surprise, right? Mechanical, electrical, and plumbing. And really, I I hate the the mechanical is actually the most important, right? Is that right? Only because we struggle a lot with individuals in all the offices thinking that yeah, this one's too cold, this one's too hot. So balancing the units out, if you have a good set of drawings, knowing where the trunk lines run, knowing where all these things are, and I'm I'm really talking about office specifically, that is is very helpful. Same thing with yeah, hey, this is a dedicated circuit, these circuits run here, we can tie this off. That's helpful. Um, same thing with plumbing, right? But at least with that, we can we can camera the line and kind of know where the main line is.

Michael Carro 24:39

And it's not that you couldn't do it with the other stuff, but when you camera lines, I you've given me documents. I say document, you've given me um a sketch of where things go. And that that really can be helpful, especially in in a new purchase where the building could be modified several different ways. And so when you're thinking about where to put, you know, uh a restroom or a kitchen or or a sink that's needed, or I mean, yeah it's a lot less expensive if you're able to get it really close or on that line versus if we shift it over here 10 feet and it does nothing, it it saves on the saw cut, it may save on it saves on numerous, very, very helpful to have these types of uh drawings.

Don Redhead 25:21

You can have the Asbelts of construction documents, they're always very helpful when you're trying to find the the root of an issue that somebody had done or trying to make a modification, right? Um, so I love uh asking for the architectural drawings, they're called construction documents, called whatever, all of that.

Michael Carro 25:40

So the last subject that I'd uh on on this for onboarding is do you onboard wish lists for capital improvements, or does that just come over time with the property owner?

Don Redhead 25:55

We do ask for if there's anything that's in the planning phase of capital improvements. We typically get things that are just that. It's a wish list, they're not actual um drawings, right? Someone's actually gone out, hired the architect, we have quotes, we'd like you to take over this project. Usually it's not that no one's been that sophisticated. Um, typically they're like, well, no, I've never been asked. It's kind of that where do you see yourself in 10 years? Oh, I don't know. Uh, is there a wish list you'd like done to the property? Well, no one's ever asked me that. I'd love to get it painted and I'd love to do this. That's typically what we get. Um as part of our facility onboarding, um, depending on the level of of the issues, there's one that we have taken over. I've gotten a quote for a true professional inspection. It's a little bit much. I don't I don't know if I want to pay all that. Um, but it's going to be listing of all the improvements that are needed and probably us putting together a five-year plan. It's not, I'm going to say the wish list that you're talking about, but it's a capital improvement project uh timeline and budget for the next five years. We don't we're not big on the full recommendation all at once. I'd rather prioritize, you know, find the issues that are leading to other issues, cut those off, and then start to march down this path over the next, you know, probably five years.

Michael Carro 27:24

Great. Well, you've gotten a lot of information on onboarding a facility. That wraps up episode two of two for onboarding commercial real estate. I'm Michael Kierow with Blue Dirt, podcast where even idiots can make a killing in commercial real estate. That's a wrap for this episode of Blue Dirt. We're here to help you build smarter, invest wiser, and create long-term value in commercial real estate. One solid foundation at a time. If you found today's insights useful, be sure to subscribe so you never miss an episode. And if you know somebody who could benefit from these discussions, share Blue Dirt with them. Got questions or topics you'd like us to cover? Reach out. We'd love to hear from you. Until next time, keep digging deep. Stay sharp and remember real value is built from the ground up. See you on the next episode.