The big day has arrived. You are closing on an apartment building and taking over as commander and chief. Whether the transition runs smoothly or runs into a brick wall depends on how well you did your homework.

The process of taking over an apartment building begins before you officially become the new owner. It starts during the due diligence process that you undertake when deciding whether to purchase the property.

Three essential areas of due diligence are:

1. Review the tenant files including all rental applications, agreements, leases, legal notices, works orders and correspondence with tenants. You want to be sure the owner hasn't given his brother-in-law a long-term contract to do the landscaping at twice the market rate, or has given his cousin a 10-year lease on a unit at half the market rate.

2. Have the seller sign a statement that testifies there are no undisclosed verbal agreements or concessions.

Verify all service contracts including landscaping, pest control, HVAC maintenance, pool maintenance, and laundry.

3. Walk through the units, talk to tenants and get a feel for their emotional hot buttons. This is a good time to get a handle on maintenance issues that the owner may fail to mention. This is also your best opportunity to complete a Unit Condition Form if one doesn't exist. It lets both the tenant and the seller know you're a thorough and serious apartment owner.

Once your due diligence is complete and you've either bought an older building with tenants in place, or new construction that needs to be filled with tenants ASAP, the last thing you want to be asking yourself on DAY 1 is "What now?" The process of taking over a building can't go as planned if you haven't a plan in place to keep your ducks in row.

Key areas to include in your takeover plan are:

a) Know your local housing codes and security deposit laws.

b) Contact utility companies and have them prepare for change of service.

c) Set up your banking and bookkeeping systems.

d) Line up contractors you'll need for immediate repairs.

Have an announcement ready to send tenants notifying them of the change in ownership and what that means to them. The five most common tenant concerns are: 1) Will you raise rents, 2) What is the status of their security deposit, 3) Will you do any repairs to their units, 4) Will you allow them to keep their pets, and 5) What changes are you going to make.

Now that you're a building owner, you are also a diplomat. When implementing new policies that hit an emotional cord, such as lowering the weight limit on dogs allowed, it may be best to grandfather in current tenants.

If you need to change management, you have two avenues: manage the building yourself or hire a new firm. You know I'm a strong advocate of using a property manager. If you manage the building yourself, you're letting hours that could go into finding more investment properties slip away. Managing properties is simply not the most effective or profitable use of your time.

To find a property management firm, start by joining the local landlord association. You can't operate in a bubble. It takes a team. And you build your team by networking. There's no better source of referrals than people who have walked in your shoes before you. So seek out local landlords and make professional connections.

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