Multifamily due diligence: verifying the story behind the numbers
Rent rolls, leases, expenses, and the building itself. How to confirm what you are really buying.
A multifamily offering memorandum tells a story. Due diligence checks whether the story is true.
Income
- Compare the rent roll with actual leases and bank deposits.
- Identify vacancies, concessions, and tenants behind on rent.
- Check whether rents are at, below, or above the market.
Expenses
- Request actual bills for insurance, taxes, utilities, and repairs.
- Add a management fee even if the current owner self-manages.
- Underwrite property taxes on a reassessed value. In Florida, non-homestead property is generally reassessed at market value the year after a sale, so the seller’s tax bill may understate yours. Get your own insurance quote rather than relying on the seller’s premium.
Physical
- Roof, structure, plumbing, electrical, and life safety.
- Unit-by-unit condition, not just the model unit.
- Open permits and code issues.
Value-add
Price the upside honestly: renovation costs, time to turn units, and the realistic rent after work, supported by nearby comparables.
Sources: Palm Beach County Property Appraiser: Assessment Caps (non-homestead reassessment after a sale). Last reviewed September 28, 2026.
Your next step
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This content is educational and is not financial, investment, tax, or legal advice. Calculations are estimates based on your inputs and are not guarantees.