Pre-LOI Due Diligence / Analysis

Guys,

I'm curious to see how much diligence teams complete prior to submitting a bid.

Sometimes with the limited availability of information provided by brokers prior to submitting first round bids, I'm finding it hard to actually take a deep dive into some assets which are on the market.

How does your team analyze a deal prior to submitting a first bid? Is it just that the senior team members know exactly what they will be willing to pay for an asset, and minimal work is completed prior to submitting an LOI? Then is the majority of your analysis done once under contract?

What kind of diligence / analysis have you been asked to complete prior to submitting an LOI? Is it primarily market research?

Nessy

Real Estate Modeling Course

  • Real-life RE Modeling Tests from actual Interviews
  • Various asset classes including multi-family, commercial and more
  • Huge discount - until more tests and cases added

Comments (2)

Jun 3, 2021 - 4:53pm

Are you asking for development or existing  buildings?

If development well - everyone is different. We are pretty aggressive and can actually get a lot done up front for free. That includes zoning review, reviewing use and development requirements, talking to my civil engineer, sketching out a site plan, conceptually understanding horizontal cuts and fills and utility connection points. The biggest one is walking into the City with a site plan and sitting down with a planner. Sometimes those planners don't shut up, other times they act like they are the President of Mars and you are scum of the Earth. And we may or may not mitigate all the issues (via offer price) we find and can use in our arsenal for a re-trade, just depends on the strategy. 

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