Avanta Investment Group

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The multifamily due-diligence checklist.

The questions we run on every deal, distilled into a checklist you can bring to any sponsor — ours or anyone’s.

1. The sponsor

  • Have they operated through a full cycle, including a downturn?
  • Will they show you a deal that went badly — and what they learned?
  • Do they invest their own capital alongside yours, in the same position?
  • Can you speak with current investors?

2. The debt

  • Is the loan fixed-rate, or floating (a quiet bet on rates)?
  • When does it mature — and what is the plan if refinancing is expensive then?
  • Does the property cover its loan payment comfortably, even in a soft year?
  • What is the break-even occupancy, and how far below today’s occupancy is it?

3. The income

  • Are rents from the actual rent roll, not projected ‘market’ rents?
  • Is occupancy verified against payment history, not just a snapshot?
  • Are other-income lines (fees, utilities) real and collectible?
  • Has the seller’s pro-forma been rebuilt from actuals?

4. The expenses

  • Are taxes underwritten to the post-sale reassessment, not the current bill?
  • Is insurance quoted at today’s cost, not last year’s?
  • Are repairs, payroll, and management at realistic levels?
  • Is a capital reserve budgeted per unit?

5. The downside

  • Is there a written downside case — flat rents, a wider exit cap?
  • Does the deal still cover its debt in that case?
  • What happens to your capital if the hold runs years longer than planned?
  • Was there a walk-away price — and did they honor it?

6. The market

  • Is demand anchored by durable employers, not a single fad?
  • Can the property be bought below the cost to build?
  • Are local rules workable for an owner over the hold?
  • Is the property outside a flood zone (verified)?

7. The structure & alignment

  • Is there a preferred return paid to investors before the sponsor shares profit?
  • Do investors get their capital back before the sponsor’s promote?
  • Are the fees reasonable — covering the work, not the point of the deal?
  • Is the waterfall written plainly and easy to follow?

8. The documents to demand

  • Trailing-twelve-month operating statement (T-12)
  • Current rent roll
  • The full underwriting model, with every assumption visible
  • Offering documents and the operating agreement

Want the reasoning behind each item? Read our complete guide to evaluating a deal, or get the free seven-questions guide.

Avanta Investment Group · avantainvestmentgroup.com — Educational only; not investment, legal, or tax advice, nor an offer to buy or sell any security.