New to Multi-family

[Mary Pastoral]

Hey BP community,

I'm new to multifamily investing and currently analyzing my first 5/6-unit property. I want to make sure I'm approaching due diligence correctly before making an offer. I have only done single family homes so far, so this is new to me. 

My question: Is it standard practice to request a trailing 12-month rent roll and detailed financial documentation — utility bills, expense history, lease agreements, and repair receipts — from the listing agent before making an offer? I ask because so far I've been unable to get complete information from listing agents on the properties I've been looking at. Is this typical in this space?

Specifically:

- Should I expect this information before making an offer, or only after an accepted offer during the inspection period?

- For those experienced in 5+ unit deals — do you underwrite based on the current in-place rent roll or the pro-forma?

Thanks in advance. This community has been incredibly helpful. 

[Nicholas Cokas]

@Mark Kenney — appreciate the pushback, and with 120 deals you've seen more seller-side dynamics than most people on this forum combined. A few things you said are worth highlighting because they're important corrections.

You're right that calling the insurance agent directly can create friction. On larger deals with a listing broker managing the process, that's a fast way to get yourself uninvited. I should have been clearer — on a 5-6 unit deal where the seller is often a mom-and-pop owner without a broker (which is a lot of what Mary is likely looking at in Columbus), the formality is different than on your 120-unit

institutional deals. But your point stands: the better move is to request loss runs through the broker or make it a DD contingency item in the PSA. Cleaner process, same information.

On the timing of those 4 items — I agree with you that on a properly brokered deal, most of that comes post-contract during the DD period. My list was aimed at what Mary should know she needs so she can build it into her inspection contingency and not miss it. Not what she should demand before submitting an LOI. That distinction matters and I didn't make it clearly enough.

Where I think we're actually saying the same thing: your point about adjusting the T12 for what expenses will look like when the buyer takes over is exactly what I was getting at with the self-managed owner flag. The adjustment methodology is different depending on whether the current owner is running it themselves vs. paying a PM 8-10%. You clearly know this — it's the newer investors like Mary who need to hear it from both of us.

Thanks for the correction on the insurance piece. That's the kind of detail that only comes from being on the sell side of enough transactions to know what irritates you. Helpful for everyone reading this.