A Hollywood multifamily deal should be evaluated in this order: confirm the legal unit count and permitted use, reconcile public records, verify leases and collections, normalize every operating expense, inspect deferred maintenance and compliance exposure, then calculate NOI, debt service, reserves, and downside cash flow. A listing's unit count, gross rent, or stated cap rate is only a lead—not a verified investment conclusion.
The practical test is whether the property remains financeable and cash-flow positive after replacing seller assumptions with current, property-specific evidence. If you are evaluating a duplex, triplex, fourplex, or apartment property in Hollywood, request a Fines Group consultation to organize the diligence questions, underwriting scenarios, capital plan, and offer conditions before you commit.
01 / Legal use
Confirm what the property is legally allowed to be
Start with the legal use, not the rent roll. The marketing package may describe four units while municipal, appraisal, utility, or permit records tell a different story.
- Parcel and folio number, zoning, and future land-use designations
- Dwelling units recognized by city and county records
- Certificates of occupancy, completion, and use that apply
- Legal nonconforming status, if claimed
- Required parking, setbacks, density, and other site constraints
- Permits for garages, additions, converted rooms, and accessory spaces
Hollywood's Planning and Urban Design Division explains that the zoning code governs permitted uses, density, height, setbacks, parking, and other development requirements. Use the city's official planning and zoning resources, then obtain written confirmation from the appropriate city staff or qualified professional when the investment depends on a particular use or unit count.
A favorable zoning label does not prove that every existing unit was legally created. Reconcile zoning with permits, approved plans, inspections, certificates, and the physical configuration.
02 / Record reconciliation
Reconcile the parcel, permits, and physical building
The Broward County Property Appraiser is a useful starting point for parcel identity, ownership, building characteristics, sales history, exemptions, and assessed values. It is not a substitute for a survey, title work, zoning verification, or a building inspection.
| Item | Listing / seller | Official records | Physical observation | Resolution |
|---|---|---|---|---|
| Unit count | Record the claim | County and city | Inspect every unit | Document the legal conclusion |
| Building area | Marketing figure | Parcel and permits | Survey or measurement | Resolve material differences |
| Parking | Advertised spaces | Approved plan | Count and access | Verify required spaces |
| Utilities | Stated responsibility | Account and meter records | Trace meters | Assign normalized cost |
Search the city's permit history for the address. Hollywood's official permit portal provides access to current Accela records and routes older permit searches to the applicable system. Look for open, expired, or finaled permits and evidence that converted spaces were approved.
If records conflict, do not average them. Make resolution a diligence condition and involve the appropriate surveyor, architect, engineer, contractor, zoning professional, attorney, title agent, lender, or insurer.
03 / Compliance exposure
Search for code cases, liens, and unresolved obligations
An income statement can omit compliance costs that become the practical burden of ownership. Search for municipal code cases, recorded liens, unpaid utility or special charges, open permits, unsafe-structure matters, and required inspections.
Hollywood directs owners and buyers to its code-violation tools and customer service resources to verify lien status. Review the city's current lien and compliance guidance, obtain the searches required by title and closing professionals, and confirm how any issue will be cured, paid, escrowed, or insured at closing.
For older or larger buildings, determine whether a Broward Building Safety Inspection is due, completed, deficient, or approaching. Obtain reports, repair documentation, permits, engineer correspondence, and final acceptance evidence—not only a seller statement that the building passed.
04 / Lease audit
Audit every lease and the actual collections
Underwrite collected rent, not scheduled rent. Build a unit-by-unit audit containing:
- Lease start, expiration, renewal, and notice dates
- Monthly base rent, recurring charges, concessions, credits, and delinquencies
- Security deposit, advance rent, and where funds are held
- Owner- and tenant-paid utilities and services
- Parking, storage, laundry, pet, or other recurring income
- Maintenance obligations, unusual terms, and trailing payment history
Compare the rent roll with executed leases, amendments, tenant ledgers, bank deposits, management statements, and tax reporting. Identify month-to-month tenants, economic vacancies, employee or owner units, and income that depends on an unverified side agreement.
Florida residential tenancies are governed by Part II of Chapter 83. Review the current Florida Residential Landlord and Tenant Act with a qualified Florida attorney before assuming a lease provision, deposit practice, notice, or operating procedure is compliant.
05 / Revenue
Separate in-place income from the stabilized case
In-place case
Current legal rents and actual recurring collections.
Stabilized case
Supportable market rents after realistic turnover, work, leasing time, and concessions.
Downside case
Lower rents, higher vacancy, slower collections, and no speculative ancillary income.
Do not replace every current rent with the highest nearby asking rent. Comparable units should match location, type, size, condition, parking, laundry, utilities, amenities, lease timing, and occupancy restrictions. Record the source and date of each comp and distinguish asking rent from an executed lease.
Treat renovation-driven rent growth as a capital project with a budget, downtime, permitting plan, tenant strategy, and achievable completion date—not as an automatic line-item increase.
06 / Operating costs
Rebuild expenses from source documents
A seller's trailing statement may omit owner labor, replacement reserves, vacancy-related utilities, recurring permits, or expenses paid outside the property account. Reconstruct at least 12 months—and preferably 24 months—of bills and payments.
- Property taxes at a supportable post-acquisition level
- Property, wind, flood, liability, and ordinance-and-law insurance
- Water, sewer, stormwater, electricity, gas, trash, and recycling
- Repairs, turnover, pest, landscaping, pool, janitorial, and security
- Management, leasing, bookkeeping, legal, licensing, and compliance
- A recurring replacement reserve appropriate to building age and systems
Do not carry forward the seller's tax bill without testing reassessment and lost exemptions. Use the South Florida property-tax estimation guide to model the stabilized expense separately from closing prorations.
Obtain property-specific insurance indications early. The South Florida insurance and flood-risk guide explains how to collect wind, flood, deductible, mitigation, and reserve inputs before the inspection period expires.
07 / Catastrophe risk
Treat flood, wind, and drainage as cash-flow variables
Flood risk is not captured by one map label. Use FEMA's Map Service Center, the official public source for National Flood Insurance Program hazard information, to identify the effective map, panel, flood zone, and any Letter of Map Change. Then verify elevation, prior losses, drainage, finished-floor conditions, lender requirements, and available coverage with qualified professionals.
- Stress annual flood and wind premiums and percentage deductibles.
- Model uninsured exclusions, coverage limits, and repair timing.
- Budget roof, window, door, drainage, electrical, and moisture work.
- Hold liquidity for vacancy and claims that do not fund repairs immediately.
An acceptable base premium with a large percentage deductible can still create a material liquidity need.
08 / Operating license
Determine whether lodging or apartment licensing applies
Florida's Division of Hotels and Restaurants states that a nontransient apartment license generally applies to a building or complex with five or more units rented for at least 30 consecutive days, while transient use has different definitions and licensing triggers. Review the current DBPR apartment licensing guide and confirm the property's facts directly with DBPR and the city.
Do not assume that a duplex, triplex, or fourplex can be converted to short-term use because it falls below a nontransient apartment threshold. Transient lodging, zoning, vacation-rental, fire, tax, association, lender, and insurance rules require a separate legal and operational screen.
09 / Return model
Calculate NOI before debt—and cash flow after debt
Exclude loan payments, depreciation, income taxes, and major one-time capital projects from NOI. Include a clearly identified replacement-reserve assumption in the decision model even when a broker's cap-rate presentation excludes it.
Cap rate on price
Stabilized NOI ÷ purchase price
Yield on total cost
Stabilized NOI ÷ total project basis
DSCR
NOI ÷ annual debt service
Pre-tax cash flow
NOI − debt service − capital items paid from current cash
Keep purchase price and total project basis separate. Total basis for decision-making may include closing costs, immediate repairs, unit turns, required reserves, financing costs, and working capital. Ask the CPA how those items are treated for tax and financial-reporting purposes.
10 / Downside
Stress-test the acquisition
| Variable | Base case | Downside case |
|---|---|---|
| Collected rent | Verified or supported | Lower growth or flat rent |
| Vacancy and credit loss | Property-supported | Higher and longer |
| Property tax | Post-sale estimate | Higher value or millage |
| Insurance | Current written indication | Higher premium and deductible funding |
| Capital work | Scoped and quoted | Contingency plus delay |
| Financing | Current lender quote | Higher rate, lower proceeds, or extension |
- Does cash flow remain positive without immediate market-rent conversion?
- Can the investor fund a deductible, major repair, or extended vacancy?
- Does the lender underwrite the same legal units and income?
- What fact would lower the price, change financing, require a credit, or end the deal?
11 / Contract and diligence
Put verification into the offer and diligence plan
A strong model is not protection unless the buyer has time and rights to verify it. Coordinate with Florida legal, brokerage, lending, title, insurance, inspection, engineering, and tax professionals on the contract and diligence scope.
- Obtain access to every unit and building area.
- Verify leases, ledgers, deposits, notices, and operating records.
- Confirm zoning, legal units, permits, code, liens, and inspections.
- Complete physical, survey, title, insurance, and lender reviews.
- Define seller cure, escrow, credit, repricing, or termination rights.
The South Florida long-term-rental due-diligence checklist provides a broader acquisition file. Use this Hollywood guide to make the market, use, and compliance questions property-specific.
Questions and answers
Hollywood multifamily due-diligence FAQs
What counts as a multifamily property for underwriting?
Investors often use multifamily broadly for duplexes, triplexes, fourplexes, and larger apartment properties. Lending, appraisal, building, zoning, fire, licensing, and insurance classifications may use different thresholds. Confirm the classification each decision-maker applies to the specific property.
How many Hollywood rental units require a Florida apartment license?
DBPR states that only buildings or complexes renting five or more units generally require a nontransient apartment license, subject to statutory definitions and exclusions. Transient rentals have different rules. Verify current state and local requirements for the actual ownership, unit count, rental term, and operating plan.
Can I rely on the current property-tax bill?
No. The seller's assessed value and exemptions may not represent the buyer's future expense. Model a post-acquisition estimate using current official sources and confirm assumptions with the Broward County Property Appraiser, tax collector, closing professional, and tax adviser.
What if the listing unit count differs from city records?
Treat the difference as unresolved until qualified professionals verify the legal use and the lender, insurer, appraiser, and title or legal team accept the documented conclusion. Do not underwrite income from a disputed unit as if it were certain.
Is the seller's cap rate enough to compare properties?
No. Recalculate NOI using consistent income, vacancy, expense, reserve, and legal-unit assumptions. Compare both cap rate on price and yield on total cost, then review DSCR, cash flow, liquidity, and downside scenarios.
Verify before you value
Value the income the building can legally and reliably produce
The most important number in a Hollywood multifamily acquisition is not the asking cap rate. It is the cash flow supported by legal units, collectible leases, normalized expenses, insurable conditions, financeable facts, and a realistic capital plan.
Book a Fines Group investment consultation to pressure-test the legal-use questions, operating model, capital needs, financing assumptions, and downside before you commit.