All Forum Posts by: Lisa Borowy

 Yes!

Leasing history is only part of the story. As @Evan Polaski stated, not only is this request reasonable, it is necessary for any savvy buyer and you will also need to get tenant estopple certificates which are sworn statements of accuracy of the lease from each tenant. One common underhanded practice of multi family sellers is to fill vacant units with just anyone to make the financials look better before selling. You need to protect yourself from this by researching and confirming that each tenant went through the proper due diligence protocols, met the income to debt ratio's, met the criminal history check, etc. 

Absolutely. Ask for a T-12 “trailing twelve months” it refers to a financial statement that represents the properties performance over the past year.

@Lisa Borowy, is it reasonable, yes.  As others noted, sellers will vary on their answers.  And honestly, there is limited information that can be derived from this, particularly leasing history.  If the seller is great at leasing my property and the buyer is not, my leasing history is irrelevant.  Or more likely, if the seller is keeping tenants long term, they are likely being responsive and limiting rental increases.  If you ignore or choose not to respond to tenant requests, and/or aggressively push rents, tenants will turn over more frequently.

Utility costs should be disclosed, but again, there is room to maneuver here.  The lease may allow for LL to charge back to tenants and choose not to, or you can choose to amend lease at renewal to require reimbursement, so what the seller is doing can change, typically, in a year or less.

As for the seller's perspective, particularly for smaller properties, there is really no upside to the seller for sharing this info.

I would say it would be normal to ask for the T12 (or T3/T6 if T12 is not available) and Rent Roll. Without those, it would be difficult to analyze the property. Also you could ask the broker if a OM is available. This is assuming you are talking about initial underwriting of the property. You would need tons of more documentation during due diligence.

It's not unreasonable, but the response will vary based on the owner. Some are happy to comply while others will either see it as a waste of time or just not interested in giving you any more than necessary.

To be honest, when I have people asking for too much information upfront, I see this as a time waster. Once a deal is well on it's way is when I would be willing to share everything I have. 

My recommendation for newer people (those who are learning or getting their feet wet) is to ask in smaller increments rather than risk being shut out.  

Absolutely. Collecting and projecting accurate income and expense info is crucial to underwriting/analyzing a deal. 

Though I would add that you can't always rely 100% on the rosy version provided by the seller. Do your own digging...trust but verify.