Do you trust the rent rolls from the previous landlord?

Question

I'm just starting out. I have an offer on a duplex.

I'm set to receive the rent rolls and lease agreements. What steps did you take to verify the information? Did you bother with estoppel agreement?

Were there other steps you took during the diligence period?

Will Gaston · Answer

Account Closed I like to talk to the current tenants during the home inspection.

My favorite thing to ask is "So what can you tell me about the place?" and then I shut up. When they finally stop talking I'll say "Really? What else?".

Many will tell you more about it than you would ever imagine.

Getting additional info from the owner is helpful but getting it from the tenants is almost always more enlightening (and truthful).

Jill F. · Answer

Account Closed

What Will said! Tenants will give you the scoop. Try to take at least two people for inspections if the owner will be present so that one can keep the owner occupied.

If the owner is sticking too close, you can bet they fear what the tenants will say. At the inspection you will also often get a pretty good idea of how many tenants are ridin' the crazy train before you make the purchase...

Dan Handford · Answer

Account Closed Great point here! As real estate investors, we should be thinking of each property as a separate business. We should be taking a very close look at everything to make sure the business is viable.

Hadar Orkibi · Answer

Account Closed i don't trust anything when it comes to sellers and brokers.

you need to verify as much as you can.

with rent roll, you want to make sure that you know what rents are currently paid, not just Physical occupancy But also Economic occupancy - that means tenants that actually paying rents. you can verify these by asking for bank statements, and schedule 1from the TAX Return.

In addition ask for copies of the leases and make your market research to check what are realistic rents in the area.

Paul Choi · Answer

Do not trust what sellers and brokers put out. Get rent roll when inquiring about the property. Get lease agreements and tenant estoppel once under contract and doing due diligence.

To take it further, get expenses as well - utility bills, schedule E, etc. For commercial deals, lenders want to see documents. Don't expect sellers to just hand these to you. Got to request them all. If you don't obtain documentation and close and later find out that the numbers don't line up with reality, then it buyer's fault for not doing their homework IMO

James Gorman IV · Answer

Ask for 2 or 3 years for IRS reported income & expenses on the property.

Jiri B. · Answer

I think the rent roll is more of an initial step to see if you should even dive deeper into analyzing the property.

I also like to ask for all the lease agreements and for each tenants ledger. That way you get better idea of the quality of the tenant, whether they pay on time etc.

Talking to the tenants is also very good way to get feel for the property, if possible.

Also keep in mind that any document the seller provides you is a material fact. If worse comes to worse and you purchase the property based on what the seller gave you and then later find out, those documents were not correct, you have legal rights to take steps against the seller. (this will require a lawsuit but you can get some many back, discounts or even rescind the entire purchase and get all your expenses paid back)

But if you find something shady during your due diligence then you have to make the call if its even worth it. If there is one thing, there will likely be more..

Michael Badin · Answer

It's very easy to make a property look good on paper. Verification is always needed.

Do you trust the rent rolls from the previous landlord?

Do you trust the rent rolls from the previous landlord?

Most Popular Reply

12 Replies