Please Critique My Due Diligence Checklist

[Brian Volland]

A brief bit of background: The below checklist is intended to be used during the due diligence period for 2-4 unit properties. It is cobbled together from many sources and so may have some items which are "non-standard". Many items are not required but requested regardless because you cannot have too much information and you'll never get them if you don't ask. 

Please take a look and let me know if there is something you would add or remove and why. Also, please forgive the formatting, it's much cleaner in MS Word.

Week 1:

Request the following information from seller agent:

Primary Financials: Check boxes upon receipt of documentation or to answer in the affirmative.

• qFinancial Statements and/or Tax Returns 2yrs+
• qAnnual operating Statement (REQUIRED)
• qMonthly Operating Statement
• qYear-to-Date Operating Statement (Required)
• qSecurity Deposit Statement (Required)
• qMatches estoppels? (Required)
• qOther Deposits Statement [Pet/Special] (Required)______________________________
• qALL Deposits to be transferred at COE per contract? (Required)
• qUtility Bill Statement
• qCopy of monthly utility bills 2yrs+ or entire time of ownership

	Water	Electric	Landscaping	Trash
Yearly Avg
Year High
Year Low

• qUtility statements/bills match utility company records for prior month?
• qWhy not?_________________________________________________________
• qRent Rolls and Estoppels
• qCopy of ALL Leases (Required)
• qAny missing? Why?_________________________________________________
• qEstoppels (Required)
• qDo they match leases?
• qWhy not?___________________________________________________
• qStatement of Verbal/Written Landlord/Tenant contracts (Required if in place)
• q2yrs+ Rent Rolls (Required)
• qAny current tenants historically late payment/failure to pay?______________________
• qCertificate of Occupancy
• qInsurance Policy Document
• qPremium 2yrs+___________________________________________________________
• qAll claims past 2yrs________________________________________________________

Compliance Documentation:

• qZoning Certification
• qBuilding Code Compliance Letter
• qInventory of Transferred Property
• qLead paint Disclosure
• qAsbestos Disclosure
• qBuilding square footage certification

Maintenance:

• qCapital Expenses Age/Replacement/Service Statement (Required)
• qDeferred Maintenance Statement (Required)
• qOperating manuals for all transferred equipment/items
• qAdditional Seller Disclosures_______________________________________________________
• qHOA Agreement:
• qAnnual Dues______________________________________________________________
• qHOA Benefits_____________________________________________________________
• qDate/Cost/Use of Last Special Assessment______________________________________
• qProperty Management Contract
• qLandscaping Contract
• qMaintenance Contract
• qEquipment Rental Contract
• qPlot Map_______________________________________________________________________
• qBuilding blueprints_______________________________________________________________
• qFloor plans_____________________________________________________________________

Will Seller Issue Warranty of Information?

Research The Following Information and/or Documentation:

• qUtility Bills from prior month
• qWater
• qElectric
• qLandscaping
• qTrash
• qInsurance
• qClaims Report from carrier
• qCarrier Risk Assessment
• qFlood Insurance Required?
• qProperty Tax
• qWhat percent building currently taxed at?_____________________________________
• qDo “The Numbers” still work w/ Non-Homestead tax rate?________________________

• qCapital Expenses:
• qWhen were the following last replaced?
• qWater Heater______________________________________________________
• qHVAC Unit_________________________________________________________
• qRoof_____________________________________________________________
• qWasher___________________________________________________________
• qDryer_____________________________________________________________
• qStove_____________________________________________________________
• qRefrigerator_______________________________________________________
• qOther____________________________________________________________
• qWhen were the following serviced?
• qWater Heater______________________________________________________
• qHVAC Unit_________________________________________________________
• qRoof_____________________________________________________________
• qWasher___________________________________________________________
• qDryer_____________________________________________________________
• qStove_____________________________________________________________
• qRefrigerator_______________________________________________________
• qOther____________________________________________________________
• qDeferred Maintenance Items: ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
• qTenant unresolved issues?
• qIssue listed on deferred maintenance list?

Additional Research Information:

• qRent.com Review________________________________________________________________
• qLast Sales Price/Date_____________________________________________________________
• qRental Ordinances_______________________________________________________________
• qMarkey survey of nearest 3-5 Competitors

Schedule The Following For Week ONE:

• qInitial walkthrough of all units
• Schedule The Following For Week TWO:
• qAppraisal
• qInspections
• qLand/Building Inspection (Required)
• qPest inspection (Required)
• qFire Suppression Inspection
• qBoiler Inspection
• qHVAC Inspection
• qMold Inspection
• qTitle Inspection

Week 2:

ATTEND ALL PHYSICAL INSPECTIONS IN PERSON

• qTitle Report
• qTitle Report Clear?
• qIf not, renegotiate
• qBuilding/Land Inspection
• qAll Clear
• qCost of repair?____________________________________________________________
• qRenegotiate
• qPest Inspection
• qAll Clear
• qCost of repair?____________________________________________________________
• qRenegotiate
• qOther Inspections
• qFree of Major issues
• qTotal cost of repairs?_______________________________________________________
• qRenegotiate
• Rerun analysis with all VERIFIED numbers
• qDo the numbers still work?
• qCashflow:_______________________________________________________________
• qRenegotiation Required?

[Jeff B.]

IMO

• qAnnual operating Statement (REQUIRED)
• qMonthly Operating Statement
• qYear-to-Date Operating Statement (Required)

are redundant and that serves only to irratate: Pick the last and compare to two years Sch-E