Are you ready to buy property and wanting to know if it is good value? Are you ready to sell your property and want to know what to expect? Have you found an appealing property and are ready to make an initial offer? Did you know that conducting a thorough due diligence can help make the market (and time) work for you to put more money in your pocket and avoid countless headaches.
Simply put, due diligence is the opportunity for you to verify the facts presented about a property or a buyer, calculate value, and identify the risks you may face. A recent article in the Real Estate Weekly offered a bit of quick guidance for conducting the due diligence crucial to commercial real estate deals. The article offers some sound suggestions for due diligence on any size of deal - co-op, condo, townhouse, or multi-unit investment property or more.
While your due diligence will be unique, here are four areas to explore during this time:
→ Building Condition: Identify repairs, improvements, and upgrades that might be necessary in the near future.TIP: Engage a professional inspector to conduct an engineering inspection.
→ Financial Health: Verify building financial statements, schedule of improvements & budgets.TIP: Obtain prior year tax returns to compare with reported financial figures.
→ Current leases: Examine lease terms & options, obtain estoppel certificates for any matters not documented in current tenant agreements.TIP: Review correspondence files for insight.
→ Neighborhood Survey: Review zoning laws, inquire to known plans for neighboring properties and check local government records.TIP: Tap into online data sources to search NYC records for liens, violations, tax records and more.
The bottom line: You will understand the value of a property as well as the risks and rewards if you plan for due diligence.
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