What do I request from the seller when vetting a 12-Plex?

9 Replies

Good Evening!

I am looking at buying a potential 12-plex.  I've only purchased duplexes and single family in the past.  I know that I need to analyze a commercial deal differently (requesting much more information).  I asked the selling agent for the following information:


Profit and Loss Statements

Utility Bills

Current Leases

What am I missing?  Is there anything more I should request?  Am I using the correct "lingo"? 

Thanks for your time and advice!


You’ll want the current rent roll, and the trailing 12 or T12. We also request past 2 years of P&L or tax returns.

I bought a 12 plex last year and asked for: rent roll and 5 years financial statements, which I looked over and gave to my CPA, that was all the financial information needed. I made the offer subject to inspection. 

Don't worry about sounding like a pro to the agent, just get what you need to be comfortable. If the seller is not forthcoming that is a red flag and go find another deal.

@Alissa Engel its Trailing 12 month. same thing as T12.

its a report that shows month by month what income was in and what expenses were out. including capital expenses. 

once you do the financial analysis you go a head and do the lease audit.

As minimum ask for the following:

  • Leases, amendments, modifications
  • Current or future lease concessions
  • Security deposits
  • Current rent rolls
  • Current rent arrears

@Mike Montana Rent roll and T12 is a must for sure. I would demand the tax returns as the P&L's can be fudged. The tax returns are typically more accurate and most people don't fudge on those.

@Bjorn Ahlblad Many times the sellers that are uncomfortable are the ones that are not very organized so they are afraid to release things because they don't want the deal to fall through since they don't really keep track of the expenses very well. These are red flags but these types of sellers are the ones that are usually more apt to accept a lower offer.

@Alissa Engel You should also get insurance quotes as well as an estimate on what the taxes may increase to when you purchase the property. Many times these numbers come in higher than expected which can dramatically affect the underwriting on the property.

@Alissa Engel the T12 or “Trailing 12” is The last running 12 months of income and expenses. So this shows you how the property is performing currently or how it has performed in the most recent history.

@Alissa Engel , send my regards to Montana!  I miss it badly!  I’m on the east coast now and my wife thinks of Montana as my mistress..

I just bought a couple of buildings here, and after being out west for 40 years, I tend to want  to trust a handshake or a persons’s word!’ DONT DO THAT!!


Rent roll: absolutely get a SIGNED one.  And then go talk to tenants (whether the owner approves or not)— in fact, don’t ask permission, just act dumb and apologize later if someone has a problem.  You’ll find out a world of information 

Spend as much on inspections as you can and don’t worry about inconveniencing tenants.  Take your time and know every inch of you can, particularly furnaces, water heaters, roofs, foundation— that stuff is excellent negotiation fodder, and more importantly, it will eat you and any profit alive .  Hire a specific heating person for heat and AC. And an actual roofer to get on the roof.

Get copies of all leases and READ them.

Go to the city and see if there are any open permits, and if there’s a rental department, and/or a health Dept, go there.

Probably more than you want to know, and maybe you already know all this, but after many years of doing this, I tend to be too relaxed, and wish someone would slap me around each time!

Good luck!

@Alan Brown

Response is late, but thanks for all this! The deal didn’t work out after doing all of the suggested investigation. The repairs needed were too much given the asking price, and the seller wasn’t budging.

And Montana says hello! It’s really booming here....great place to invest!