1. Identify the property and reporting period
- Property address, legal description and unit count
- Transaction type, requested financing and expected closing date
- Rent-roll effective date
- Operating-statement start and end dates
- Whether amounts are monthly, year-to-date, trailing 12 months or annualized
A common error is comparing a current rent roll with a partial-year statement without adjusting the periods.
2. Review the rent roll unit by unit
- Unit identifier and unit type
- Occupancy status and lease dates
- Current rent, concessions and arrears
- Parking, storage, laundry and other recurring income
- Market-rent estimate and its evidence
- Vacant, employee, model or offline units
Flag duplicate unit numbers, occupied units with no rent, missing market rent and unusual differences between similar units.
3. Classify every operating-statement line
| Classification | Examples |
|---|---|
| Operating income | Rent, parking, laundry and recurring recoveries |
| Operating expense | Taxes, insurance, utilities, repairs, management and administration |
| Replacement reserve | Modeled recurring capital allowance where required |
| Debt service | Interest and principal; excluded from property NOI |
| Capital item | Major roof, boiler or suite-renovation work; review separately |
| Unclassified | Anything that still needs source confirmation |
4. Reconcile rent-roll income with reported income
Annualize occupied in-place rent and compare it with the rental-income lines in the statement. Investigate material differences instead of simply choosing the higher number. Timing, vacancy, bad debt, concessions, rent increases and inconsistent accounting periods can all explain the variance.
5. Normalize NOI without hiding risk
Document every addition and deduction. Common review items include owner-performed management, missing insurance, unusually low repairs, non-recurring legal costs, capital items recorded as repairs and new property-tax or utility assumptions.
A normalized number should be reproducible from the source documents. Keep a reported NOI, a calculator NOI and a written adjustment schedule rather than overwriting the original figure.
6. Connect diligence to loan sizing
Once NOI is reconciled, test the proposed loan against value, debt service coverage and debt yield. Then run rate, rent and expense downside cases. The financing package should make it clear which figures came from the seller, which came from external sources and which were calculated by CapShark.
7. Prepare the lender-review file
- Executive summary and property facts
- Current rent roll and operating history
- Normalized income and expense schedule
- Sources and uses, requested loan and cash requirement
- Stress tests and primary risks
- Borrower and sponsor information
- Value-add scope, timing and budget if applicable
- Outstanding conditions and due-diligence checklist
Import and reconcile the two source files first. CapShark's Deal Room maps a rent-roll and operating-statement CSV locally in the browser and hands reviewed totals into the multifamily calculator.
Open the Multifamily Deal RoomOfficial context and limitations
CMHC's current MLI Select documentation guide illustrates the importance of supporting documentation, including rent-roll evidence where applicable. Its Rental Market Report provides broader market context. Exact lender requirements vary; obtain the lender's live checklist and verify all figures independently.