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Deal review checklist

Multifamily underwriting checklist

A good checklist changes by stage. The first pass should kill weak deals quickly; the full underwrite should prove source integrity, operating assumptions, capital needs, financing, and downside resilience.

Direct answer

Gate the work: confirm the deal fits the mandate, establish a source-backed operating baseline, test the business plan and financing, then package the decision with risks and open items. Never let completion of a spreadsheet substitute for resolution of a material question.

The process

A repeatable way to do the work

  1. 01

    Run the mandate screen

    Check geography, asset type, size, vintage, basis, return thresholds, and obvious legal or physical disqualifiers.

  2. 02

    Audit source documents

    Inventory the OM, rent roll, T12, debt terms, tax records, and capital information; record date and provenance.

  3. 03

    Underwrite operations

    Reconcile units and revenue, normalize expenses, test market rent, and bridge reported to underwritten NOI.

  4. 04

    Model capital and debt

    Time renovation, reserves, closing costs, loan funding, interest, covenants, and refinance or sale assumptions.

  5. 05

    Pressure-test the recommendation

    Run downside cases, identify sensitivities, assign unresolved diligence, and write the reasons to proceed or decline.

Stage 1: screen before you model

The fastest underwrite is the one you correctly decline before rebuilding the seller's workbook. Confirm that the opportunity fits the firm's actual mandate and identify the few variables capable of changing the answer. At this stage, speed matters, but every rejection still needs a named reason so the team can audit its funnel.

  • Location, submarket, asset class, year built, units, and strategy fit.
  • Guidance price, price per unit, going-in yield, and rough replacement-cost context.
  • Known occupancy, rent position, debt constraints, and major deferred maintenance.
  • Initial risks, missing documents, bid date, broker, seller, and next action.

Stage 2: prove the operating case

Once a deal passes the screen, source discipline matters more than cell coverage. Reconcile the rent roll, T12, OM, and model rather than choosing whichever figure is most convenient. For each important input, retain the original value, unit, period, and source location alongside the selected assumption.

  • Unit count, unit mix, square footage, occupancy, lease expiration, concessions, and delinquency.
  • Historical revenue, controllable expenses, taxes, insurance, utilities, payroll, and management fees.
  • Market rents, supply pipeline, concessions, absorption, sales comps, and operating comps.
  • Renovation scope, downtime, premium, pace, deferred maintenance, and replacement reserves.

Stage 3: model the capital stack and downside

Financing can make a plausible property case fragile. Model funding dates, interest-only periods, amortization, fees, reserves, extension tests, and refinance assumptions explicitly. Confirm that debt metrics use the lender's definitions, not just the spreadsheet's preferred convention.

A downside case should combine adverse movements that can occur together: slower leasing, weaker rent, higher capex, delayed stabilization, and a worse exit. Single-variable sensitivities are useful, but they can understate how operating problems compound with debt-service pressure.

  • Sources and uses reconcile and equity contributions are timed correctly.
  • DSCR, debt yield, LTV, covenants, and extension tests are visible by period.
  • Exit cap, sale costs, hold period, and refinance proceeds are documented.
  • Base, downside, and break-even cases reach the IC with the same definitions.

Stage 4: prepare a decision, not a data dump

The final package should state the recommendation, why the deal fits, what creates value, what can break, and what remains unresolved. Separate source-backed facts from assumptions and open diligence. Give each open item an owner, due date, and consequence if the answer is unfavorable.

FAQ

Frequently asked questions

What documents are needed to underwrite a multifamily property?

At minimum, obtain a current rent roll, trailing operating statement, offering materials, tax information, debt terms or assumptions, and available capital or condition information. Lease files, aging, invoices, and market evidence strengthen later diligence.

What are the most important multifamily underwriting assumptions?

Rent and renewal performance, vacancy, concessions, bad debt, expense growth, taxes, insurance, capex, debt terms, and exit assumptions usually drive the result. Materiality depends on the deal.

When is a multifamily underwrite complete?

A base case can be complete while questions remain, but material unknowns should be visible, assigned, and reflected in the recommendation or downside. A filled model alone is not completion.

Continue the workflow

How to analyze a multifamily rent roll

Turn unit-level rows into occupancy, loss-to-lease, and revenue conclusions.

Read guide

How to read a T12

Normalize trailing operations before treating them as a forward run rate.

Read guide

Commercial real estate IC memo template

Write a decision document that ties every recommendation back to evidence.

Read guide