Due Diligence on Renter Occupied Home Purchase

[Luke Grogan]

Help Please!

When evaluating a home purchase with a current renter in place, what are some must-haves during the DD phase? Also, what red flags should I watch out for? There are elements of the deal that make it a little specialized, i.e., not on the MLS, properties owned by an LLLP, lump sum for total properties rather than price per unit (other than average price per unit) and mostly self managed properties.

Here's what I'm asking for, what am I missing?

• Existing leases and rental applications for current tenants
• Detailed breakout of security deposits, pet deposits, utility deposits, etc. for each property
• Rent rolls for past two years
• Tax filings associated with the LLLP
• LLLP documents
• Mortgage statements and payoff amounts
• Property Management Contracts/Agreements

Can you add anything else to the list or any general advise on completing due diligence? The package is more than one home, so some of this will be DD on the holding company and some on individual properties and leases.

Thanks!