New to Multi-family
Mary PastoralPro Member
Investor · Columbus Ohio · Member since 2022 · 27 posts · 34 votesNew to Multi-family
Most Popular Reply
Member since 2021 · 82 posts · 79 votes
6mo@Mary Pastoral — good answers above on the T12 and rent roll. Here's the layer most new investors miss on 5-6 unit deals.
Before you even request documents, ask the broker one question: "Is the owner self-managing or using a PM company?" That answer changes everything about how you read the financials.
Self-managed owners almost always underreport expenses. They don't track their own time, they pay handymen in cash, and their "maintenance" line is missing half the real cost. Budget 8-12% higher on operating expenses than whatever their T12 shows.
Documents nobody mentioned that you need:
1. Insurance loss runs (5 years). Call the agent directly if you have to. Claims history tells you what the building actually went through — water damage, liability incidents, break-ins. The seller won't volunteer this.
2. Utility bills (12 months), not a summary — the actual bills. You need to know who's paying what. If the owner is paying all utilities on a 5-unit, that's $800-1,200/month in many markets that's eating your cash flow. RUBS (ratio utility billing) can recover 60-80% of that, but you need to know the baseline first.
3. Property tax bill + assessment history. In most states, the property gets reassessed at sale. That $4,200/year tax bill on the seller's T12? It might be $7,500 after you close. Run the numbers at the reassessed value, not the current one.
4. The lease agreements themselves — not just the rent roll. Rent roll tells you what they're paying. The leases tell you what happens when they leave. Month-to-month tenants in a 5-unit means you could be staring at 60% vacancy in 90 days. Fixed-term leases with staggered expirations are what you want to see.
The real question at 5-6 units: You're right at the line where residential financing ends and commercial begins. Some lenders will do conventional up to 4, some portfolio lenders go to
10. Your financing options drive your underwriting assumptions — get pre-qualified before you fall in love with a deal.
Good luck with it. The fact that you're asking these questions before making an offer puts you ahead of most first-time buyers.
20 Replies
- Investor · Los Angeles, CA · Member since 2020 · 102 posts · 94 votes6mo
@Mary Pastoral, congratulations on getting started - this is a huge first step!
It is not uncommon for the broker to share the T12 and rent roll (in some cases they may even share the list of capex completed).
Any additional due diligence information (e.g. lease agreements, tax returns, utility bills, service contracts, etc.) is shared after the PSA is signed.
I also share a bit more detail on this in my book - Mastering Multifamily Underwriting. - Real Estate Coach · Frisco, TX · Member since 2025 · 59 posts · 75 votes6mo
I have bought 120 deals and would not consider wasting my time on a deal where I can't at least get a T12 and Rent Roll upfront.
In some cases, the sellers that are more mom and pop type sellers don’t always want to share upfront. It’s is completely silly though.
Also, ideally for the T12, you can get an Accrual T12 and also a Cash T12. You will want to understand how to look at these.
I will tell you upfront that the lending and the contract process for a multifamily this size is completely different and you will want to make sure you have the right team in place to help you as you can easily get burned if you don’t know what to be aware of.
- Lender · Marlboro, NY · Member since 2016 · 71 posts · 3 votes6mo
Quote from @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.
Hi Mary,
get as much info for 5-6 unit properties especially size of apartments as a lot of the lenders I deal with the apartments have to be at least 400 square feet with full size appliances. I would want to get a T-12. Without a full look at costs, it is hard to do your due diligence to see if it is a viable property. also make sure the property has been kept up with repairs and does not look like it has been neglected.
Harold
- 6moMarc RiceBusiness MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
Quote from @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.
Yes, it's pretty common for the buyers to ask for those documents. You should make sure that you know as much as you can about the properties you are planning to buy
Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews - Member since 2021 · 82 posts · 79 votes6mo
@Mary Pastoral — good answers above on the T12 and rent roll. Here's the layer most new investors miss on 5-6 unit deals.
Before you even request documents, ask the broker one question: "Is the owner self-managing or using a PM company?" That answer changes everything about how you read the financials.
Self-managed owners almost always underreport expenses. They don't track their own time, they pay handymen in cash, and their "maintenance" line is missing half the real cost. Budget 8-12% higher on operating expenses than whatever their T12 shows.
Documents nobody mentioned that you need:
1. Insurance loss runs (5 years). Call the agent directly if you have to. Claims history tells you what the building actually went through — water damage, liability incidents, break-ins. The seller won't volunteer this.
2. Utility bills (12 months), not a summary — the actual bills. You need to know who's paying what. If the owner is paying all utilities on a 5-unit, that's $800-1,200/month in many markets that's eating your cash flow. RUBS (ratio utility billing) can recover 60-80% of that, but you need to know the baseline first.
3. Property tax bill + assessment history. In most states, the property gets reassessed at sale. That $4,200/year tax bill on the seller's T12? It might be $7,500 after you close. Run the numbers at the reassessed value, not the current one.
4. The lease agreements themselves — not just the rent roll. Rent roll tells you what they're paying. The leases tell you what happens when they leave. Month-to-month tenants in a 5-unit means you could be staring at 60% vacancy in 90 days. Fixed-term leases with staggered expirations are what you want to see.
The real question at 5-6 units: You're right at the line where residential financing ends and commercial begins. Some lenders will do conventional up to 4, some portfolio lenders go to
10. Your financing options drive your underwriting assumptions — get pre-qualified before you fall in love with a deal.
Good luck with it. The fact that you're asking these questions before making an offer puts you ahead of most first-time buyers.
- Real Estate Coach · Frisco, TX · Member since 2025 · 59 posts · 75 votes6mo
As a seller, I would not provide any of the 4 items you mentioned unless we are under contract. None of these should be expected before submitting an offer. And, there are many more items that should be asked for once you go under contract. Our detailed DD list we ask for is over 100 items.
On the T12, regardless if the seller self-manages or not...you as a new buyer typically needs to adjust many expenses on the T12 based on what expenses will look like when you buy. This can include other items as well such as insurance, property taxes, etc.
One other point....I would not suggest calling the insurance agent directly. First of all, they should not be providing this information to anyone who is not on the policy and if the seller/broker finds out you called for this information, they are not going to be happy.
- Member since 2021 · 82 posts · 79 votes6mo
@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.
- 6moRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @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.
Yes it is common but I would say they are available 50% of the time
- 6moPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Mary Pastoral
If you're looking in Columbus a lot of owners who have 5-6 unit properties don't have T-12s, especially if they self-manage. If they have a PM more likely to have this info. Most owners will provide a rent roll or have some type of rent roll available to share before going in contract. As mentioned above, whether or not they self-manage will impact if they have a T-12 and
Most owners will not share leases prior to going in contract with that type of unit count. Try and take a look at it from their perspective. If every potential buyer was interested but not serious enough to write an offer why would you want to drop everything to go on a wild goose chase getting them these items: leases, putting together a T-12 if you don't have one, and getting repair receipts.
- Usually in Columbus, tenants almost always pay for gas and electricity. The only one to watch for is water and sewer. If it's sub-metered, the owner will pay for it and back-bill the tenants based on usage; and if not, usually the owner will charge a flat amount. I would ask the agent who pays utilities, and then when you go in contract, you can cross-reference this against what is written in the leases for utility responsibilities - 6moArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 966 votes
Quote from @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.
Totally normal, Mary. Small multifamily sellers can be pretty sloppy with paperwork, so missing T12s, spotty rent rolls, and half-baked “financials” are par for the course. Most investors go in expecting to get the real docs only after an accepted offer, during due diligence, when the seller is actually motivated to hand things over. For underwriting, use the current in-place numbers to stay conservative and let pro-forma just show the upside so you don’t talk yourself into a deal that isn’t really there. Once you’ve seen a few of these, the process starts feeling a lot more straightforward. - If you’re new to MF then I highly suggest you don’t pursue 5/6 unit properties. Way better to get a couple 4-units. Insurance and loan terms won’t be favorable for you so it’ll be hard to make valuations work unless you bid low. Many sellers will expect higher comps so you’ll likely be wasting time.
- New to Real Estate · Los Angeles, CA · Member since 2023 · 83 posts · 29 votes6mo
I’d want the rent roll and trailing financials before getting too serious, but not expect every little receipt upfront. I think I’d buy based on what it’s doing now, then treat the pro forma as a bonus (if it’s realistic)
- Lender · Nationwide · Member since 2026 · 9 posts · 4 votes6mo
Quote from @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.
Hello Mary,
Congrats on finding a desirable 5–6 unit multifamily property!
Before making an offer, you should review the full financials. This includes rental income, any additional income, and all expenses—such as property management fees (if applicable), property taxes, insurance, utilities, maintenance, repairs, and other operating costs. Be especially careful when reviewing expenses, as items like maintenance are sometimes understated or missing.
From there, create your own pro forma using realistic assumptions for income and expenses. Based on your projected NOI, you can determine a price that makes sense and submit your offer accordingly.
Once your offer is accepted, the due diligence phase begins. Make sure you allow enough time for an on-site visit and thorough document verification. During this period, your goal is to validate all financials. Confirm that lease amounts match the rent roll, and that utilities and other expenses align what you have used to calculate your ROI.
If you ever want a second set of eyes on the numbers or to walk through your underwriting step by step, feel free to message me. I’m always happy to help.
- Real Estate Coach · Frisco, TX · Member since 2025 · 59 posts · 75 votes6mo
One point I would just clarify...
You can look at the current Revenue (validated with bank deposits after you go under contract) certainly as a starting point and assume you won't increase the Revenue for now. But, on expenses, I would not assume the expenses will stay the same. I am not saying they won't stay the same, but there are too many expenses that can be different once you buy. For example, insurance, taxes, payroll/mgt fee, etc.
- 6moWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
The standard practice for deals involving five or more units requires full financial disclosure after the buyer's offer receives acceptance. You should request the basic rent roll and approximate expenses information before you make your offer to prevent blind underwriting. The initial step of underwriting requires you to base your assessment on existing financial figures which you should then combine with realistic pro-forma projections.
Good Luck!
NETWORTH BUILDERS5236 Reviews - Real Estate Coach · Salt Lake City, UT · Member since 2017 · 273 posts · 414 votes6mo
On a 5-6 unit, it will depend on how sophisticated the owner is.
I've seen annual financials and rent rolls written on a legal notepad before... I've also gotten photocopies of 1040 schedule E to show their total income.
Many people with properties this size haven't quite turned their rental portfolio into a business yet. They're collecting checks, paying the mortgage, and occasionally working on their books...
Definitely ask for financials, but don't expect a formal T-12 or rent roll for people that self-manage.
Now, realize that lenders will want the income statements and if you have the legal notepad version of an income statement, it can be hard to get regular financing... That actually can give you leverage on pricing or working out owner financing for a year or two while YOU clean up the books and then apply for a mortgage.
- Investor · Member since 2023 · 73 posts · 32 votes4mo
Hey Mary. I should be closing on a duplex here in a few days. I would be happy to talk about what I did, and maybe learn from each other. The duplex that I got is in Columbus OH as well. Let me know!
- Lender · Marlboro, NJ · Member since 2025 · 243 posts · 150 votes4mo
On the documentation timing: it's standard to request the trailing 12 rent roll and expense history before making an offer, but don't be surprised when agents push back or give you incomplete info. On smaller deals especially, sellers often don't keep clean records and agents don't push them to. You'll get more complete documentation once you're under contract, but you want enough to at least sanity check your underwriting before you tie it up.
On the pro-forma vs. in-place question: always underwrite to current in-place rents with actual documented expenses. The pro-forma is the seller's story. Your job is to stress test it. If the deal only works at pro-forma rents you're betting on execution before you even own it.
One thing worth knowing on the financing side since you're crossing into 5+ units: you're now in commercial loan territory, which means the loan is underwritten on the property's income rather than just your personal financials. Lenders will want that same documentation you're asking for, so getting clean rent rolls and expense history matters both for your own analysis and for getting a loan closed.
Happy to connect if you have questions on the financing side as you get closer to an offer
- 4moJuan YepesBusiness MemberLender · Miami, FL · Member since 2025 · 131 posts · 38 votes
@Mary Pastoral hi,
I would recommend you go from single family to 2-4 multifamily and then 5+ units. Reason being is 2-4 is still considered a residential mortgage and with your single family home experience, you are in a really good position to get financing. 5+ units mortgage loans are considered commercial and lenders look for 2-4 multifamily experience. So SFH > 2-4 units > 5+ units is the natural progression.
I've modeled thousands of real estate transactions and I would say never use assumptions when you can use real numbers. Your goal should be to know exactly what the revenue and costs are as-is and under current management, and then determine if and how you can increase revenue and/or reduce costs to create value.
Helm Mortgage Corp - Juan Yepes, Director5125 Reviews - 4moRobert EllisBusiness MemberDeveloper · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
Quote from @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.
If I were in your position, I'd focus less on whether you can get every document before making an offer and more on whether you can get enough information to determine if the deal is worth pursuing. For a 5–6 unit property, I would absolutely want a rent roll and some form of trailing financials before spending significant time underwriting. If a seller can't provide even basic income and expense information, that's usually a signal to be cautious. I also underwrite based on current in-place performance first and treat any pro-forma upside as a bonus until it's proven.
The reason I say that is small multifamily deals often sit in an awkward middle ground. They're large enough that financing, insurance, and operations become more income-driven, but they're still frequently owned by mom-and-pop operators with incomplete records. The mistake I see investors make is underwriting the seller's future story instead of today's reality. What matters most here is understanding what happens if rents stay exactly where they are and expenses increase after closing. Property taxes, insurance, management costs, and maintenance frequently look very different once ownership changes. If the deal works with conservative assumptions, any operational improvements become upside instead of a requirement.
When you're analyzing these 5–6 unit opportunities, are you primarily looking for immediate cash flow or are you targeting properties where you can create value through rent increases and operational improvements?
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