A narrative guide tells you how to think about diligence. A checklist makes sure you do not forget anything at two in the morning when the contingency clock is running. This is the checklist. We use a version of it on every apartment deal we underwrite, and we hand it to clients so nothing important slips through the gaps.

If you want the reasoning behind each item, our companion piece on real estate due diligence in Los Angeles walks through the why. This page is the what. Work it top to bottom, mark each item confirmed or flagged, and you will know exactly where a deal stands before your contingency period ends.

How to use this

Treat every line as a question with a documented answer. “Confirmed” means you have a piece of paper or a photograph that proves it, not the seller’s word. “Flagged” means it needs a price adjustment, a repair credit, or a closer look. Anything still open as your deadline approaches is a reason to extend or walk, not to hope.

1. Financial

• Certified rent roll, current within 30 days
• All leases and any amendments, matched line by line to the rent roll
• Twelve months of bank statements, deposits traced against stated income
• Trailing-12 operating expenses from actual invoices, not the pro forma
• Two to three years of tax returns or owner financial statements
• Property tax bills and any reassessment exposure at sale
• Insurance declarations and full loss-run history
• Utility bills, broken out by what the owner pays versus the tenant
• Current delinquencies, concessions, and any unrecorded side agreements
• Security deposits held, and confirmation they transfer at closing
• Vendor and service contracts, with their cancellation terms
• Recomputed NOI at market expenses, the number you actually underwrite to

The financial section is the heart of the file. If you are unsure how each line flows into a value, our guide to analyzing rental property cash flow shows the mechanics, and the true cost of owning rental property in California covers the expenses sellers tend to leave off.

2. Physical

• General property inspection by a licensed inspector
• Roof: age, material, condition, and remaining life
• Plumbing: supply line material, water heaters, and a sewer lateral scope
• Electrical: panel capacity, wiring type, grounding, and any knob-and-tube
• Foundation and structure, with an engineer’s report if there is any sign of movement
• HVAC age and condition across all units and common areas
• Seismic and soft-story status, plus any retrofit obligation and its cost
• Unit-by-unit interior condition, photographed
• Common areas, parking, laundry, and landscaping
• Deferred maintenance list with repair estimates
• Pest and termite inspection

3. Legal and regulatory

• Preliminary title report, reviewed for liens, easements, and encumbrances
• Rent-control or rent-stabilization status, determined unit by unit
• Open code violations and outstanding orders to comply
• Permit history, with attention to unpermitted units or additions
• Certificate of occupancy and confirmation the legal unit count matches reality
• Zoning, and whether current use conforms
• Any pending litigation, judgments, or tenant disputes
• ADA and habitability compliance for the building type

This is the section where Los Angeles deals diverge most from other markets. Rent-control coverage and permit status routinely change a deal’s entire thesis, which is why we determine status per unit rather than per building.

4. Tenant and lease

• Estoppel certificates from every tenant, confirming rent, deposit, and terms
• Tenant payment histories and delinquency patterns
• Lease expiration schedule and renewal options
• Below-market and above-market units identified, with the legal room to adjust
• Any tenants with protected status under local ordinances
• Move-in or relocation agreements that survive the sale

The estoppel is the tenant confirming, in their own signature, what the seller told you. When the estoppel and the rent roll disagree, the estoppel usually wins, and the disagreement is information.

5. Environmental

• Phase I environmental assessment, especially for older buildings or commercial-adjacent sites
• Lead-based paint disclosure for pre-1978 construction
• Asbestos survey where original materials remain
• Mold and moisture inspection
• Underground storage tanks or prior site uses worth checking

A note on sequencing

Order the work by what can kill the deal fastest and cheapest to learn. Pull rent-control status and the bank deposits first, because either one can end the conversation before you spend money on inspectors. Then the title report. Then the physical inspections, which cost the most. Spending inspection money on a building whose rent upside does not legally exist is a common and avoidable mistake. Financing runs alongside all of it, and our overview of multifamily property financing in California covers what the lender will want to see.

Operator’s note

A checklist only works if a flagged item changes your behavior. We have watched buyers diligently document a problem and then close at full price anyway, because the momentum of the deal carried them. The discipline is not in finding the issue. It is in turning every flag into a number and bringing those numbers back to the table. A finding you do not act on is just a paid-for surprise you chose to keep.

Bottom line

Five sections, every line documented, sequenced so the deal-killers surface first. Confirm what you can prove, flag what needs a price, and let nothing stay open past your deadline. That is the whole discipline.

Want this checklist adapted to a specific building you are evaluating? Get in touch and we will walk it with you.