10 Unit Apartment - Estimate numbers prior to offer or get full financials?

[Greg Martin]

Hi everyone,

I am new to multis that are over 4 units, and it's been quite a lot to learn. I know that I need to get financials as the value is based on NOI, but when do I get the exact financials-during due diligence, or before making an offer? I can estimate a lot of the expenses, and I know what the seller is stating for current rents. Do I verify all of that prior to the offer, or do I make an offer based on the estimate and adjust after during due diligence?

I feel like I've read both ways.  I just want to make sure that I'm not frustrating the agents involved, but I want to make sure that I've done everything properly from my end to evaluate the deal.

Thanks in advance!

Greg

[Steve Olafson]

You should not be able to get a copy of the leases prior to an accepted offer.  That is confidential information that should not just be passed out. 

All of the information should be given to you by the agent.  They should be able to pass along the income and expenses.  Ask for the actuals.  They will probably give you a proforma which is just a view of income and expenses through rose colored glasses.  They should be able to provide you with a current rent roll.

Once you get into contract you can verify everything for accuracy.  Don't forget to include management.