Interview: What are the important point of diligence before acquiring a property
- From a multifamily perspective the way I would answer it is: property condition (which you can get through the PCA so roof, boiler issues, etc), rent roll and any rent deferment, any outstanding legal issues, deferred cap-ex from a PM perspective
What are some glaring ones that I may be missing?
Following
Title commitment, ALTA and utility surveys, ESA phase 1, might test for lead and asbestos.
This is more for ground-up (unless I'm wrong and also applies to value-add?), which I appreciate. What about an existing asset for a value-add deal?
following as well
Market due diligence: sales, rent and expense comps. Sub market vacancy, rent growth, absorption and supply pipeline. If you’re good at your job then you should already know most of this.
Property level due diligence: rent roll, operating statements for past 3 yrs at least, cap ex for past 10-15 years if available, third party contracts, tax bills.
Third party reports: phase I, MAI appraisal, PCA, zoning, ALTA title, legal opinions.
No matter what, you overpaid!!!
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