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Due Diligence Cheat Sheet: 4-Unit Income Properties (California Edition)

🧠 Due Diligence Cheat Sheet: 4-Unit Income Properties (California Edition)


If you're meeting with a 4-unit property owner—or representing a buyer considering one—having the right questions at your fingertips makes all the difference. This Due Diligence Cheat Sheet is your go-to resource for staying sharp and thorough, whether you're having a casual coffee chat or sitting down for a formal review.


✅ Grouped by topic for quick access

✅ Covers financials, tenants, compliance, repairs, and more

✅ Includes California & South Pasadena-specific tips


Key areas covered:


Rent roll, leases, and tenant history


Utility structure and other income streams


Capital improvements and open violations


Soft-story retrofits, insurance claims, and zoning checks


Management, turnover trends, and service contracts


Sale logistics: 1031 exchange, disclosures, timing


🔍 Bonus: If you're in South Pasadena, we've included reminders to cross-check rent control rules, seismic retrofit deadlines, and local code enforcement records.


📄 Want a printable checklist version or a version tailored to your city? Just ask — I'm happy to customize it to fit your real estate workflow.Below is a “due-diligence cheat-sheet” you can keep handy when you sit down with an owner of a 4-unit income property in California. I’ve grouped the questions by topic so you can pick and choose quickly depending on how formal (or casual) the conversation is.



1. Income & Expenses

1. Current Rent Roll

• Can I see the rent schedule with unit numbers, tenant names (or codes), move-in dates, current rent, deposits held, and any concessions?

2. Historical Financials

• Do you have trailing-12 and preferably three-year operating statements?

• Any extraordinary (non-recurring) expenses I should adjust for?

3. Utility Structure

• Which utilities are paid by the owner vs. tenants?

• Are units individually metered or RUBS-billed?

4. Other Income

• Laundry, parking, storage, solar credits, pet fees—how much and how collected?


2. Leases & Tenants

5. Lease Documents

• May I review all written leases, addenda, and house rules?

6. Rent Control / AB-1482 Compliance

• Is the property exempt from California statewide rent caps? If not, have annual rent-increase notices and Just Cause forms been served properly?

• (South Pasadena has its own Rent Stabilization Ordinance—have any limits or registrations applied?)

7. Tenant Profiles & Delinquencies

• Any tenants behind on rent, on payment plans, or with eviction history?

8. Security Deposits

• How much is being held, in what account, and will deposits transfer at close?


3. Physical Condition

9. Recent Capital Improvements

• What major systems have been repaired or replaced in the last 5 years (roof, plumbing, electrical, HVAC, soft-story retrofit)?

10. Open Permits or Violations

• Any open City of Pasadena code cases or LA County Health department citations?

11. Seismic & Retrofit Requirements

• Has the soft-story screening been completed and, if triggered, is retrofit finished or pending?

12. Environmental Issues

• Any known mold, asbestos, lead paint, underground tanks, or seismic gas shut-off deficiencies?


4. Legal & Compliance

13. Unit Legality & Zoning

• Are all four units legally permitted? Any unpermitted additions or garage conversions?

14. Insurance Claims & Premiums

• Have there been insurance claims (water, fire, liability) in the last five years? What’s the current premium and carrier?

15. Short-Term Rentals

• Any licenses or prior violations for Airbnb/VRBO use?


5. Operations & Management

16. Management Structure

• Is the building self-managed or under a third-party contract? Terms of that contract?

17. Maintenance Vendors

• Who handles routine maintenance and turnover? Any service contracts that must be assigned or canceled?

18. Turnover History

• Average tenancy length and typical make-ready cost/time?


6. Sale Logistics

19. Disclosures & Reports on Hand

• Do you already have a recent appraisal, inspection, termite, or sewer-scope we can share with buyers?

20. Timing & 1031 Intentions

• Is the seller in a 1031 exchange or otherwise constrained by a timeline?

21. Preferred Terms

• Is there any rent-back, seller financing, or other term that would help you in negotiations?



Quick tip


Because you’re in South Pasadena, be sure to cross-check anything the seller tells you against:

• The South Pasadena Rent Stabilization Program (registration, notice requirements, and relocation fees).

• LA County soft-story retrofit deadlines and any local seismic gas-shut-off mandates.

• Pasadena Public Records portal for open permits and code violations.



Contact Us

Main Office
388 E Valley Blvd UNIT 106, Alhambra, CA 91801, United States

Tel: 626-653-6903
Email: info@thechouteam.com
Social: @thechouteam

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