New Investor Under Contract for first Deal

[Maurice White]

Hi, I'm a new real estate investor who is currently under contract for my first duplex in the metro Cleveland, Ohio area. The property is currently 100% rented. I used many different scenarios in my analysis of the property and it looks like it could cash flow anywhere from 250-300 per month. However, I'm running into some obstacles in the "due diligence" stage of the process. I've requested the rent roll, expense report, and the leases of the current tenants from the owner. I was told I had to contact the current property manager to request the information. I've been given the run around from the property manager on why he can't release the information to me. Finally, my real estate agent tells me the owner is basically not willing to give authorization to release this information to me because all the numbers were provided in investment document on the MLS. My gut tells me not to trust those numbers and confirm everything. I can't walk away from the deal though without losing my earnest money for this reason because I didn't include it in my contingencies when I made the offer.

I plan to have the tenants complete an estoppel agreement to find out what the current terms of each tenants lease. Is there any others ways to go about obtaining the rent roll and expense report? Is there anything else I should be considering? Or am I making a bigger deal than I should about this? Any advice is much appreciated. All I want to do is confirm that my analysis was correct based of the information that was listed on the MLS.

[Eric Clayton]

Use any contingencies that you do have in place to walk away if you so choose. Buyers Inspection, Loan, appraisal, ANYTHING. Buyers Inspection Contingency is your time to do your due diligence and if you don't like what you see, or in your case "NOT" what you are seeing, you should be able to walk and recoup your deposit. Your realtor should be able to ALWAYS find a loop hole in the contract to get your deposit back.  If not, you may need a new agent, or have him or her consult with their broker of record for advice as how to walk away and keep your deposit. 

Rents are easy to get. You can ask tenants what they are paying (you can always increase rents if they are below market rate), get your meters read to see how much utilities are, and your realtor can find out in a REALIST report what the tax assessment is.

Good luck!