Due-diligence lists balloon because they feel thorough. Offers get written anyway. This checklist is the opposite: twelve items that should change the number you write, the contingencies you keep, or the decision to pass. If an item cannot do one of those three things, it does not belong here.
Use it with the underwriting sequence. Educational only — local contract law and lender overlays win.
1. Who actually occupies the property Friday
Owner-occupied, vacant, or tenant in place are three different products. A tenant with eight months left at $200 below market is not “in-place cash flow.” It is a delayed renovation plus a legal process if you need possession. Read the lease. Confirm deposits. Confirm who owns the appliances on the listing photos.
2. Insurance bindability at this address
Call a broker with the year built, roof year, and ZIP before you fall in love with the spread. If the last three carriers non-renewed the block after hail, your pro forma insurance line is fiction. No bindable policy means no loan, which means no closing, which means you just spent option money to discover the market already knew.
3. Tax bill versus tax after you buy
Ask the assessor or title company how sales reset value. A “cheap” tax line on a long-held owner is often the entire return. Price it at the post-sale estimate, not the seller’s escrow.
4. Rent you can lease in 30 days, not “market”
Three leased comps. If you cannot find them, you do not know the rent. The mortgage calculator will not save you from a $400/month miss.
5. Roof, sewer, and water — the three bills that ignore your cap rate
Roof age from the street is a start; a permit search is better. Sewer laterals fail on a schedule that does not care about your 1.25 DSCR. Water: who pays, is it a well, is there a softener because the city eats heaters. These are offer credits or walk items, not “we’ll see at inspection.”
6. Flood, fire, and wind — maps, not vibes
FEMA panels lag. Ask the insurance broker what they are actually charging for this roof and this distance to brush. A $180/month flood policy on a $1,700 rent is a different property than the listing.
7. HOA, city licenses, and short-term rules
If the thesis is Airbnb, read the ordinance and the HOA minutes, not a Facebook group. If the thesis is long-term rental, check landlord licensing, inspection programs, and rent-control status. A 6% cap in a city that requires a certificate of occupancy you cannot get is a 0% cap.
8. Title crumbs: liens, easements, access
Shared driveways, solar leases, and code liens show up after you have already told your spouse this is “the one.” Order early title. If access is an easement across a neighbor who hates the world, price that.
9. Crime and school narratives you can verify
Do not underwrite a neighborhood from a national crime heatmap alone, and do not ignore three years of break-ins on the same block. Talk to a local agent who actually leases there. “Up and coming” is not a line item.
10. Exit: who buys this from you, and at what cap
If the only buyer is a future you at a higher multiple, you are the greater fool. Know whether this is an owner-occupant product, a small-investor product, or a leftover. Thin buyer pools make “I’ll refinance in 18 months” a prayer.
11. The inspection contingency you can actually use
A five-day inspection on a 1972 fourplex is how you buy surprises. Align days with inspector availability. Write credits against specific systems, not “seller to make buyer whole.” If you will not walk over a dead sewer, do not pretend the contingency is protection.
12. The number after a bad year, not a pretty year
Run the bear case: 8 weeks vacant, insurance +40%, a $7,500 HVAC, rate shock if you plan to refi. If that year requires a contribution you cannot write without selling something else, the offer is too high even if the base case “works.”
How to use this on an offer
Print the twelve. For each, mark price, term, or pass. If you have eight checks with no mark, you skipped the point. The longer due-diligence article is for after the offer is accepted. This page is for the 36 hours before you send a number.