I am considering purchasing a mid-sized apartment building.

What are some important conditions to consider writing in the agreement of purchase and sale?

Thanks

30 Days Due Dalliance with option to increase to another 30 days.

Due Diligence to start AFTER you receive all the financial information, copy of leases etc.

Finance contingency if you need it, should also have an option to extend. 

There are many many other things you can add to it.....

Originally posted by @Hadar Orkibi :

30 Days Due Dalliance with option to increase to another 30 days.

Due Diligence to start AFTER you receive all the financial information, copy of leases etc.

Finance contingency if you need it, should also have an option to extend. 

There are many many other things you can add to it.....

That's very informative, thank you.  If you have some other reasonably common clauses to share, that would be very helpful.

Rent roll, leases and financials and inspection of buildings and premises. Hire a licensed inspector and go with him/her. Many tenants will stay during the inspection and you will get to meet them, shake their hands and see what you are getting yourself into. Having access to the financials, documentation, and physical inspection will help you make a sound business decision as to proceed, or move on. I would go through everything and have your accountant review the financials as well. All the best!

@Bjorn Ahlblad that's great advice, thank you!

@Scott Inno

First you need Trailing 12 Month and P&L, Even ask for Schedule E of the sellers Tax return. 

Surprisingly so many Mom and Pop investors don't do proper book keeping or have any T12 and P&L

The minimum you want to ask is as follow: (NOTE - Please seek your own legal advise, Im not an attorney!) 

add “Exhibit A” with Contingencies.

Within 10 Days of execution, Seller shell provide Buyer with any document related to the property, which sell include but not limited to:

• 1.Leases, amendments, modifications
• 2.Current or future lease concessions
• 3.Security deposits
• 4.Current rent rolls
• 5.Current rent arrears
• 6.All maintenance, utility, management, service, and other contracts.
• 7.Financial statements for the past three years and a year-to-date financial statement.
• 8.A description of all capital expenditures performed in the last 3 years.

@Hadar Orkibi Great response, thank you. What if they cannot furnish the P&L or the T12 (also, are these American terms? I'm operating in Canada FYI).

Yes USA terms. Ask for their Tax returns.

Are you planing to invest in Canada or the US?

This will be in Canada.

Same women different dress...

Perhaps try to find local investors group to join.

@Hadar Orkibi , that's a great idea; for this one, though, I am on a time crunch.

Originally posted by @Scott Innocente :

@Hadar Orkibi , that's a great idea; for this one, though, I am on a time crunch.

Scott:  If you are purchasing your first{?} mid-sized apartment building, you should be working with an experienced broker and/or attorney who should be able to advise you on what materials and {diligence} conditions should be identified in your APS.

Building on what has been stated above, be sure to include the collection of estoppels from all tenants (and suppliers) and to have the clock on your diligence period start only once the Vendor has supplied the information requested of them (in the APS).

Other items which we typically request as materials include: all leases and contracts; blueprints, engineering diagrams and assessments; existing environmental assessments; authorisation to pull the permit and work order / citation history on the property; finances for the past 3 years; current rent-roll along with economic vacancy (physical vacancy, concessions, evictions); list of recent CAPEx; statement of reserves (note: this should be included in the financials, but you never know).

@Roy N. thank you, I am a realtor myself but not a commercial realtor.  

Thanks for the information, some good points you brought up such as the due diligence period not starting until documents have been furnished.

Much appreciated

@Scott Innocente I would heed @Roy N. advice. He's an experienced investor even thought he's not really down with the GTA ;)

Most of the advice (financial analysis) is similar across the US and Canada with the exception of legal/accounting issues. I would try to consult with local investors as they will be your best source of market knowledge and advice. 

Thanks @Omar Khan