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Updated almost 7 years ago on . Most recent reply

User Stats

74
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9
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Bharath Raj
  • Investor
  • Houston, TX
9
Votes |
74
Posts

Due diligence on a tenant

Bharath Raj
  • Investor
  • Houston, TX
Posted

I am negotiating a lease with a physician for my medical office building. This physician is a sole proprietor. I am adding a personal guarantee into the lease. The lease is being drafted by a attorney. My broker said that they usually don't do credit checks, and instead rely on P & L/balance sheets for the last 3 years. I was a little surprised. I would assume that you need 3 years of tax returns also, if you rely on a self report of P & L/balance sheets. I would appreciate some feedback on due diligence in this scenario. 

Most Popular Reply

User Stats

2,953
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4,475
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Alexander Felice
  • Guy with Great Hair
  • Austin, TX
4,475
Votes |
2,953
Posts
Alexander Felice
  • Guy with Great Hair
  • Austin, TX
Replied

I applaud your effort to make a contingency work, now stop it.

a person with a 500 credit score and evictions might not be worth giving up on, but I would. She was evicted less than 6 months ago!

Don't be the next person in a seemingly LONG list of people she has promised to do right by, and then didn't. If your business model relies no HER as a tenant, then let her move in, otherwise, move on.

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