Guide / Acquisition capital diligence

The Acquisition Capital Diligence Worksheet

For buyers of multifamily portfolios and commercial buildings. A sample framework, not a fixed form. Every building needs its own version, built from its records, its systems, and its market.

By: Rhett Dawson
Record reviewed: October 25, 2026

A guide built from public sources. Facts are drawn from the sources listed at the end. Guidance labeled My read is my interpretation.

The short answer

The asking price assumes a capital future the seller chose. Diligence is where the buyer prices a different one. The worksheet produces three lists: the condition evidence you actually hold, the capital obligations due early in your ownership, and the seller assumptions you could not verify. The third list is the one that moves price.

The horizon is already set for you

Lenders impose the diligence clock. Fannie Mae's Section 404 requires a property condition assessment before commitment on multifamily loans, subject to its streamlined supplemental-loan exception. Its Form 4099 instructions build on ASTM E2018.

Under Form 4099, the evaluation period is the loan term plus two years past maturity. Section 406 caps the reserve period at the sooner of maturity plus two years or twelve years from origination. Fannie's cost schedules apply inflation of 3 percent a year. Freddie Mac's Chapter 62 requires the term plus two years, to a maximum of twelve.

The funding consequence matters at acquisition. Under Fannie Mae Section 406.02, if Completion and Repairs exceed 6 percent of Underwriting Value, the replacement reserve must be fully funded from the PCA-based schedule.

ASTM E2018-24, the current standard listed by ANSI, was approved January 1, 2024. The text hosted by Vanguard Inspections describes a baseline process, not technically exhaustive. It uses representative sampling and records conditions at a point in time. Section 12.2 says a PCA is not a warranty of condition or a determination of code compliance. The current standard defines “immediate costs” and “long-term costs”, while “replacement reserves” is lender vocabulary, not the standard's defined term.

The worksheet

A. Condition evidence

Start with Form 4099's document requests, then record what you received and what remains missing.

Prior PCA or facility condition report and its date: a report outside lender windows is a starting point, not diligence.
Certificates of occupancy: request the certificates themselves, not a seller's description.
Elevator, boiler, and fire safety inspection records and certificates: keep the inspection evidence with the system record.
As-built drawings: request the building's recorded layout and systems.
Historical repair and replacement costs: the standard's document review asks for this capex history directly. No seller document is literally titled a capital expenditure schedule, so ask for the costs themselves.
Open permits and recorded code violations: check their status, and document governmental information requested but not received under Form 4099 Section 3.1.B.

Fannie's Section 404 permits a report with a High Performance Building module only if it is less than six months old at commitment. Without that module, a report can be up to twelve months old if a site visit occurs within 90 days before commitment and no material adverse change has occurred. Freddie's Chapter 62 requires a report within six months before the full underwriting package, with inspection within 30 days before the report. In Form 4099's governmental-record review, a refusal is itself a record of information requested but not received.

B. The roof and its paper

Read the transfer terms before closing, alongside the roof's physical record.

Membrane type and installation year: establish what roof the buyer is pricing.
Warranty and named holder: obtain the actual document and identify who holds it.
GAF Diamond Pledge NDL guarantee: transfer requires a written request within 60 days after ownership transfer, a 500 dollars assignment fee, and any repairs GAF identifies after inspection as necessary to preserve roofing integrity, for the remaining term only.
Carlisle F0001: the warranty promises transfer after procedures including a fee and inspection, while the transfer procedures page describes discretionary reissuance and reserves Carlisle's right to refuse it.
Carlisle Warranty Transfer FAQs: the fee is 1,500 dollars, non-refundable, and inspection is required if the roof is over five years old, has had claims, or has current issues. This differs from F0001's unqualified inspection wording. Carlisle issues no work orders after a sale until transfer completes.
Elevate Red Shield: the warranty requires the current transfer fee set by Amrize, with no amount or notice window stated in the warranty itself.
Physical check: compare roof and rooftop equipment remaining lives using the roof and rooftop units guide, because a unit swap on a warranted roof is regulated work. Carlisle F0001 requires prior written authorization for alterations on or through the roof.

C. Obligations due early

Use Freddie Mac Chapter 62's categories as shared vocabulary, with a price supported by evidence or an explicit “unpriced” entry.

First five years: list every system whose replacement falls within that period.
Lender horizon: extend the list through the applicable longer period and identify each scheduled obligation.
Critical Repairs: identify work that significantly impairs habitability, safety, value, income, or marketability, which must be corrected before Freddie proceeds with the transaction.
Priority Repairs: identify work due within 365 days of origination, including PR-90 work due within 90 days.
Deferred maintenance: Freddie defines postponed normal maintenance beyond routine work at more than 3,000 dollars per repair item. Work at or below that amount is routine repairs and maintenance.

D. Contracts and open work

Fannie Mae Form 4099 names maintenance contracts, pending proposals, and outstanding repair tickets.

Service contracts: request elevator, HVAC maintenance, and life safety agreements, including remaining terms and termination terms.
Pending proposals: collect the proposed scope and price for work still awaiting a decision.
Outstanding repair tickets: keep unresolved work visible beside the capital schedule.

As a worksheet check, read each contract's remaining term and termination terms to decide whether the buyer inherits the vendor or just the building.

E. The Boston block

BERDO obligations follow the building, so check the compliance record before closing.

Outstanding obligations: Regulations Section V.a says they “shall become the responsibility of the new Building Owner”.
Seller handover: obtain the data already collected that is needed for the next required report.
Ownership notice: notify the Environment Department within 30 days of the change, with the transfer instrument and the new owner and designated agent's names, addresses, and contact information.
Reporting calendar: no city source read for this worksheet says a sale resets the May 15 deadline or any emissions step-down year.
Public record: read the building's record in the City's BERDO disclosure data and treat a missing or pending compliance year as a diligence item, not a footnote.

Analyze Boston cautions that owner-reported usage is not independently verified by the City. Its compliance map reflects status at the reporting deadline, so late submissions can remain marked out of compliance. Use the BERDO capital planning guide alongside the building record.

Massachusetts Large Building Energy Reporting covers buildings of 20,000 square feet or more statewide, with owner data due June 30, according to Mass.gov. The state's BEAM helpdesk says BERDO compliance satisfies the state program after the buyer claims the building with the Department of Energy Resources.

Pricing what is missing

The worksheet's method is simple: an unanswered item does not average out. It converts into price protection, a credit, an escrow, a holdback, or more diligence time. Size that protection to the obligation the missing evidence might be hiding. If the seller cannot produce the roof's paper, the buyer is not buying a warranted roof and should not pay for one.

A note on rules of thumb

There is no general Fannie Mae per-unit reserve floor in Section 406. The 250 dollars per unit per year figure that circulates in broker packages exists in Student Housing Section 105 as a product rule. Section 406 sizes the general reserve from the PCA's own numbers. When a round number arrives without a document behind it, ask for the document.

What this worksheet cannot do

It does not replace a PCA, an engineer, or counsel. It is a sample framework. A real diligence scope is built per building: its age cohort, its systems, its tenancy, and the debt being placed on it. Where the public or seller record runs out, the worksheet says so and prices the gap instead of filling it.

My read

Most acquisition models I see price the building the seller describes. I look to the capital record for where the described building and the real one part company. The cheapest week to learn about a roof is the week before closing.

Sources

Elevate's transfer fee amount could not be verified from a manufacturer source, and no city source states whether an approved BERDO compliance pathway carries to a buyer automatically.