Due diligence on a tenant

[Bharath Raj]

I am negotiating a lease with a physician for my medical office building. This physician is a sole proprietor. I am adding a personal guarantee into the lease. The lease is being drafted by a attorney. My broker said that they usually don't do credit checks, and instead rely on P & L/balance sheets for the last 3 years. I was a little surprised. I would assume that you need 3 years of tax returns also, if you rely on a self report of P & L/balance sheets. I would appreciate some feedback on due diligence in this scenario. 

[Alexander Felice]

I applaud your effort to make a contingency work, now stop it.

a person with a 500 credit score and evictions might not be worth giving up on, but I would. She was evicted less than 6 months ago!

Don't be the next person in a seemingly LONG list of people she has promised to do right by, and then didn't. If your business model relies no HER as a tenant, then let her move in, otherwise, move on.