Due diligence is the buyer's formal inspection and verification period after offer acceptance. Typically 30–45 days in LA multifamily. Buyers examine financials, physical condition, and title.
The due diligence period covers: physical inspection (roof, foundation, systems, unit interiors), financial verification (rent roll to tax return reconciliation, operating expense review, loan documents), title search, environmental review, and regulatory compliance (RSO registration, capital improvements, permits).
Buyers typically can terminate the deal during due diligence and get earnest money back. After the period ends, the deposit becomes non-refundable except for specific contractual outs.
LA multifamily due diligence in 2026 is more rigorous than in 2021. Institutional buyers bring detailed checklists. Sellers with incomplete documentation face either concessions or dropped deals. Pre-listing preparation is the best defense against due-diligence surprises.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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