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Operations 7 min read

Investor Due Diligence Checklist Before Closing

Due diligence is when you verify the assumptions you made when you wrote the offer. Surprises after you go hard on earnest money are expensive. This checklist covers what to verify before you're committed.

01, Value support

  • At least 3 sold comps within 90 days, same property type, similar renovation quality
  • Comps are in the same micro-location (not stretched across a different neighborhood)
  • Active listings reviewed for competition and absorption rate
  • No pending comps that would significantly change the ARV conclusion
  • Price drops and DOM context noted for current market conditions
  • ARV documented in writing before going hard on earnest money

02, Property condition

  • Full walk-through with notes on every room and system
  • Roof: age, condition, active leaks, gutter state
  • HVAC: system age, function, cooling/heating test, filter condition
  • Plumbing: water pressure, drain speed, visible corrosion, water heater age
  • Electrical: panel age, breaker capacity, visible wiring issues, GFCI coverage
  • Foundation: visible cracks, settling, door/window alignment issues, moisture intrusion
  • Moisture/mold: crawl space moisture, basement water, musty smell, visible mold
  • Contractor walk-through for scope verification on anything above cosmetic
  • Photos of all noted issues with timestamps

03, Title and access

  • Preliminary title search ordered from title company
  • Liens identified (mortgage, judgment, mechanic, HOA, tax)
  • Estate/probate status confirmed if applicable
  • Property access rights confirmed (easements, shared drives, encroachments)
  • HOA existence, health, fees, rental restrictions, and litigation status confirmed
  • Attorney review triggered if estate, lien complexity, or unusual title issues

04, Tenant status (if occupied)

  • Lease copy obtained and reviewed
  • Lease term, rent amount, and security deposit confirmed
  • Payment history confirmed (ideally 12 months)
  • Notice rights and tenant protections under the lease reviewed
  • Condition of unit from tenant confirmed where accessible
  • Buyer's rights to access property during contract period confirmed
  • Timeline for vacancy or lease continuation clear before closing

05, Financing and capital

  • Lender confirmed deal is financeable at anticipated terms
  • Proof of funds available if cash or hard money
  • Financing contingency status clear in purchase contract
  • Hard money or private lender terms confirmed in writing
  • Insurance quote obtained, some properties have insurance challenges
  • Closing cost estimates from title company received

06, Compliance (licensed operator)

  • Agency/principal disclosure given to all parties correctly
  • Attorney review triggered if assignment, double close, cross-state, or unusual structure
  • Seller motivation documented and genuine
  • No misrepresentation of market value or seller options
  • All advertising for this property reviewed for compliance
Timing guidance: Complete items 01–02 (value and condition) before going hard on earnest money. Complete items 03–05 (title, tenant, financing) during the formal due diligence period. Item 06 (compliance) should be embedded throughout, not a final review step.