Verify the income
- ☐ Actual rent roll (not pro forma) for 12 months
- ☐ Current leases — terms, deposits, expirations
- ☐ Market rent comps within 1 mile
- ☐ Vacancy history and current occupancy
- ☐ Other income: laundry, parking, storage
Rebuild the expenses
- ☐ Property tax bill (post-sale reassessment estimate)
- ☐ Insurance quote in YOUR name
- ☐ Utilities paid by owner — 12 months of bills
- ☐ Management fee (even if self-managing: 8–10%)
- ☐ Maintenance & CapEx reserves (10–15% of rent)
- ☐ HOA dues and special assessments
Run the numbers
- ☐ NOI from verified figures only
- ☐ Cap rate vs recent comparable sales
- ☐ Cash flow after realistic debt service
- ☐ DSCR ≥ 1.25 at your actual loan terms
- ☐ Cash-on-cash return meets your minimum
- ☐ Stress test: +1% rate, +10% expenses, 2 months vacant
Physical & legal
- ☐ Professional inspection (roof, foundation, HVAC, plumbing, electrical)
- ☐ Sewer scope on older properties
- ☐ Title search, liens, easements
- ☐ Permits for past renovations
- ☐ Local rent control / licensing rules
- ☐ Estoppel certificates from tenants
A deal that dies from due diligence was never a deal. Every item above has ended someone’s bad purchase.