Request the operating picture
Review the rent roll, leases, income and expense statements, available collection records, and recent capital improvements. Compare the periods covered and ask about inconsistencies or missing records.
- Distinguish occupied units, vacancies, and any concessions in the available information.
- Identify recurring expenses and separate them from one-time items or capital projects.
Keep actual performance separate from projections
Label the source and date of each figure. Evaluate current operations separately from assumptions about future rents, vacancy, financing, or renovation. Ask what evidence supports each assumption and what happens if it proves too optimistic.
- Consider operating income separately from debt payments and project funding needs.
- Update financing scenarios with actual lender terms when available.
Build a due diligence question list
Review condition, title, insurance, leases, and any proposed changes with the appropriate professionals. Do not assume an advertised unit count, expansion concept, or future rent is approved or achievable without verification.
- Arrange property inspections and obtain written estimates for material work.
- Have qualified advisers review legal, tax, and tenant-related questions before relying on an investment plan.