Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Quick 3 Step Due Diligence for Real Estate

29 May 2023 · 1 min

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Christian Osgood walks through three documents you must have before buying a multifamily property: the owner's bank statements, estoppel letters signed by each tenant, and a T12 statement showing 12 months of income and expenses. If any are missing, walk away.

Chapters

Rapid fire multifamily due diligence. 3 steps. Now, if they don't give you any of these, run. Number 1, you need bank statements. Number 2, you need estoppel letters. Number 3, you need a T12, trailing 12 months of income and expenses. So what is an estoppel letter? That is an actual letter from the tenant signed by them that says, this is my rent, this is my security deposit, this is what I believe my lease is. Now, a bank statement you can actually get from the bank that they work with, they being the owner, and it'll be an itemized list of every debit and credit for that account. And your T12 is going to be your trailing 12 months. It's going to be all the numbers that the owner believes to be true. Your best guess.