Multifamily Group – Due Diligence Services
The due diligence phase of a multifamily investment is one of the most critical times of your transaction. With values made and destroyed by income and expense statements, property owners could have a vested interest in not disclosing material facts that will impact your future earning. We recommend you avoid taking chances with your investment and complete a forensic analysis of all documents pertaining to the operation of the acquisition. Some of the items that could hide potential problems include:
- Leases: Review each individual lease for deferred rent concessions, renewals at below market rates and non market rate perks.
- Contracts and Services: Review each contract and individual invoices for the previous 12 months. Match invoices to income and expense statement line items
- Randomly audit 4 months of the previous 24 months of expenses. Look for expense reciepts that have not been accounted for in the income and expense report.
- Compare rent rolls and income and expense reports in 4 time periods over the past 24 months to ensure income matches on both documents.
- Ensure all expenses are accounted for. A building in a Northern climate will normally have snow removal charges. Look for missing line items