What constitutes proof of income history when looking to purchase a multifamily property?

Question

Should I request tax records? Rent roll? Lease agreements? What documentation should I request from the seller?

Answer 1

Tax returns. Look at the figures he gives to the IRS. He may squalk that he understates the rents to them and overstates the expenses, so you should look at his accounting (or take his word for it) instead, but if he is willing to lie to the IRS, why wouldn't he lie to you too?

Liars lie. Honest people don't lie. There is no grey area here.

The rent Roll is his word about CURRENT rents. Not a history. Get Estoppal Certs from all tenants. These are their statements about whenthey moved in, what their lease term is, how much they pay, and what their deposit was.

Also get several utility bills from him. Not just the current Spring months - get past bills from summer and winter to see your likely expenses. Also look at the inasurance premium he pays and check out the laundry equipment (often have leased equipment that you MUST assume).

VERIFY EVERYTHING.

Answer 2

Your income returns would be the best proof of your past incomes.