Requesting Bank Statement from Multi-Family Property Seller

[Danish Dass]

Hello everyone!

I’m currently trying to purchase my second multi family rental property. My first rental was a fully occupied triplex. One thing I did not vet in that purchase was if the tenants were actually paying. 

So here’s my question: Is it good standard practice to ask the seller for their bank statement associated with the property that shows the rent payments being credited to their account in order to prove the property generates revenue?

Many thanks!!

[Brandon Rush]

Hey Danish,

You can bank statements, but I do not believe it is too common for 2-4 family in today's market. Because of it being still being a seller's market, asking for too much will result in the seller looking for an easier offer. Another option could be that you request an estoppel agreement. This document has the landlord and/or the tenant sign off stating they are or not current on their rent and for what specific amounts. 

Either way, I would highly recommend you get something from the seller stating whether the tenants are all caught up or not. You may be able to get a hold of the listing agent ahead of your offer to get their thoughts on what would be the best way to tackle this.

Good luck!

[Danish Dass]

Thanks for the info! I will look into the estoppel certificate if I find something worthwhile. 

[Dwayne Poster]

I would request the previous years tax filing for the property.

[Henry Der]

You should request the year's rental collection ledger which will show all the collections or arrears.  Each month will have a total and this total should match the deposits each month into the owner's bank account.  Ask for both of these and see that they match.  If they do, you have a pretty accurate view of the stability or quality of the tenants.