Financial
Rent roll, operating statements, bank deposits, tax bills and utility history.
Buyer's checklist
Trust the seller. Verify everything.
A practical due diligence checklist for buying an apartment or commercial building, organized the way acquisitions teams actually work.
Diligence protects the deal
Due diligence is the window between signing a contract and committing fully. It is your chance to confirm the property is what you think it is, and to renegotiate or walk away if it is not.
Organize it well and it goes quickly. Leave it to chance and surprises show up after closing.
The six workstreams
Leases
Every lease and amendment, estoppels from commercial tenants, deposits held.
Physical
Property condition report, roof, building systems, units and code violations.
Title & survey
Ownership, liens, easements, encroachments and boundaries.
Zoning & permits
Legal use, certificates of occupancy, open permits and violations.
Environmental
Phase I environmental assessment and any follow-up testing.
Send the request list immediately
Share a complete document request list the day the contract is signed, with a shared folder and owners for each item.
Walk every unit possible
Sampling is common, but seeing more units reduces surprises. Note condition, occupancy and any signs of water, pests or unpermitted work.
Reconcile the money
Compare rent rolls to leases and to bank deposits. Differences between what is billed and what is collected are among the most important findings.
Frequently asked questions
What is included in real estate due diligence?
Typically financial review, lease review, physical inspection, title and survey, zoning and permits, environmental assessment and legal review.
What is a Phase I environmental site assessment?
A study of a property's current and historical uses to identify potential environmental contamination risks, commonly required by lenders for commercial properties.
What is a tenant estoppel certificate?
A signed statement from a tenant confirming key lease facts such as rent, term, deposits and whether any defaults exist.
Can a buyer back out during due diligence?
That depends on the contract. Many purchase agreements allow the buyer to terminate during the diligence period, sometimes with a refund of the deposit. Review terms with an attorney.
Have a property to sell?
Clean, organized sellers close faster. Reach out with the details.
Brooklyn, New York