For our first 15 or so deals, am embarrassed to admit I tracked our due diligence process, such as it was, mostly in my head. Then, we convinced a pair of experienced office developers to hire us to reposition a small apartment building using their personal cash (long story). We got into escrow on a deal and the partner supervising us asked me to send over my due diligence checklist.

I asked him what a due diligence checklist was.

To his credit, instead of firing us instantly, he sent over the checklist they had developed for office deals and suggested we modify it for apartments. Since that day, every time we screwed something up, or narrowly avoided screwing something up, we added it to the list: Everything from “Do gangsters hang out outside the building at night?” to “Is there a chance someone builds a building across the street and ruins our views?” to “Where does the rain draining off the roof go?”. At this point, our list reflects almost all of our experience buying well over 100 buildings in Los Angeles over more than 17 years. It has become the most important single document in our business.

And now, minus a few items which I still consider proprietary, I am doing for you what that savvy developer (still a major management client of ours) did for me: Sharing my list, so that you can make it the single most important document in your business.