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Multifamily Due Diligence Checklist

  • A completed and signed Seller’s Property Disclosure.
  • Copies of all leases and rental applications, to include:
    • 3 years of financial statements and credit information and reports, if any, on any tenant and of any guarantors of any leases or rents.
    • Any executed letters of intent with prospective tenants, including lease concessions.
    • Leasing status report from the leasing broker, including pending rental applications.
    • Include copies of leases for all subsidized tenants and documents relating to any inspections by government agencies.
    • Rent Rolls for the last 2 years.
  • Historical rent delinquency reports.
  • Operating statements (income and expenses) for the previous two years of ownership and current year-to-date operating statements.
  • Certified (signed by owner) rent roll showing unit numbers, tenant names, rent rates, security deposit amounts, current rent payment status and lease expiration dates.
  • A schedule of all capital improvements made to the property for the past 2-4 years.
  • Security deposit detail (tenants and pets).
  • All service contracts, manufacturer and service warranties and other written contracts or agreements. A property may have contracted services for: Laundry, pest control, trash hauling, landscaping, snow removal, elevator servicing, cleaning services, window washing, security services, parking lot sweeping, etc. If possible obtain copies of current service contracts and review the following:
    • Term of contract.
    • Monthly cost for services.
    • Work to be performed.
    • Termination penalty.
  • As-built surveys showing any improvements to the property.
  • Copies of liens or liabilities on the property that should be known to the buyer prior to closing.
  • Copies of all insurance policies.
  • Copies of all insurance claims in the past 5 years.
  • Inventory of all property owned by the seller and a complete list of all inventory to be transferred with the property. (Chattels)
  • Physical inspection of the property (this is not a document — it’s just a reminder that you should always request a physical inspection as part of your due diligence).

Here are additional due diligence documents that may be included in your document requests:

  • Names and contact information for all employees including salary information (Resident Manager).
  • Copies of all warranties.
  • Environmental audits and reports.
  • Soils test reports.
  • Engineering studies including reports on walls, roofs, foundation, supports and floors.
  • Any structural, mechanical, electrical, plumbing, seismographic, HVAC or other property systems replacement, maintenance and/or repairs (including invoices and estimates).
  • Copies of all local utility invoices showing current service (last 24 months).
  • Current operating and capital budgets of the Property, including comparison of actual to budgeted results and an explanation of significant variances.
  • Current aged receivables and payables reports.
  • Building square footage certification.
  • Recent photographs of the property.
  • Copies of rental unit floor plans.
  • All property licenses and permits.
  • Certification of fire inspections and any other city sanctioned property inspections.
  • Certificates of occupancy for each tenant (Tenant signed letter confirming name and rent they are paying).