The income you are buying
Rent roll reconciled to bank deposits, trailing twelve-month expenses, every lease abstracted, options and exclusives identified, and estoppels collected. The pro forma a seller presents is a proposal. Your underwriting should be built from evidence.
The physical asset
Roof, structure, HVAC, electrical capacity, parking condition and ratio, ADA exposure, and deferred maintenance, each converted into a dated capital plan with real numbers rather than an inspection report that sits in a folder.
The legal and environmental position
Phase I environmental, title commitment and every exception document, survey against intended use, deed restrictions, utility district obligations, detention requirements, and access easements.
Protecting the deposit
Feasibility length, deposit release schedule, and extension rights should be negotiated to match the diligence the asset actually requires. Capital should never go hard before the questions are answered.
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